Washington has increasingly turned to economic sanctions to address its security concerns with both Russia and Iran, but these separate efforts have interacted in ways that risks backfiring, rather than boost U.S. and regional security. 

In Iran, U.S. sanctions have successfully hobbled Tehran’s economy but have inadvertently generated domestic resistance to ongoing negotiations and hindered diplomatic efforts to curtail its contested nuclear program. 

Similarly, sanctions against Russia that followed its invasion of Ukraine initially slashed its GDP but have since incentivized Moscow to find new allies and markets, thereby reducing sanctions’ coercive power and increasing the Kremlin’s ties with partners willing to undermine Western efforts to isolate it. 

Separate sanctions efforts have thus inadvertently incentivized two of Washington’s most pressing threats to regional peace to increase their economic and security cooperation.

Iran

The Trump administration renewed comprehensive sanctions against Iran’s nuclear program in 2018 and expanded them in 2019 and 2020, locking up billions of dollars of Iran’s foreign assets, dramatically reducing its oil export revenue that its government relies on, and temporarily throwing the economy into recession.

Instead of bringing the Islamic Republic to its knees, however, this pressure inadvertently strengthened the domestic political power of Tehran’s hardliners and increased public support for the risky nuclear activities banned under the 2015 nuclear deal, or JCPOA. One 2021 poll conducted by the University of Maryland’s Center for International and Security Studies found that three-quarters of the Iranian public supported Tehran’s growing nuclear activities, support that has made it easier for Tehran to double down on its contested nuclear enrichment and stockpiling even in the face of international pressure. 

The result is that since the sanctions were reimposed, Iran has increased its stockpile of highly enriched uranium, expanded its enrichment capabilities to make more fuel, and replaced the more moderate leadership in Tehran with hardliners less willing to compromise with Washington. Iran’s political climate and its increasing sanctions resistance have created an opening for Russia to exploit through increased bilateral and energy cooperation, an agreement on a new direct trade route, and military technology transfers that circumvent sanctions and undermine U.S. efforts on both fronts. 

Russia

Shortly after the latest round of negotiations between the P5 plus one (the U.S., UK, Britain, France, China and Russia plus Germany) with Iran resumed in Vienna, Russia invaded Ukraine, kicking off a seemingly unrelated crisis between key parties to the JCPOA. The United States then led an international effort backed by 40 states from around the world to impose broad and painful sanctions against Moscow. 

The combined U.S.-led and multilateral UN sanctions against Russia initially caused an estimated 11-percent reduction in Russia’s GDP and a significant devaluation of the ruble. These efforts were initially hailed for the speed with which the Western industrialized allies had collectively signaled their opposition to the invasion and presumably hampered Russia’s war effort. 

After the initial bite from sanctions in February, however, Russia has since managed to substantially stabilize its economy — the ruble has currently rebounded to its pre-invasion value — and its oil revenues (the state’s most valuable export), in part by circumventing the restrictions of the sanctions.

Moscow attempted to capitalize on its position in the Iran negotiations and its regional economic leverage to soften the effect of the new sanctions it was facing for the Ukraine crisis.  Russia demanded “written guarantees” from the U.S. that Moscow’s cooperation with Iran would not be impacted by the sanctions Russia faced for its operations in Ukraine, leaving the Kremlin to search for other avenues for sanctions relief. 

Partnering with Iran is not only helpful to Russian sanction-busting efforts; it serves Moscow’s security interests as well. Russia’s military offensive against Ukraine has proved both more expensive and less successful than Putin had anticipated, with mounting casualties and a more, rather than less unified NATO. With its list of potential partners shrinking, Russia is increasingly incentivized to strengthen relations with other states that share common interests.  

A Dangerous Partnership

While cooperation, even nuclear cooperation, between Tehran and Moscow is not new, it has been less important in recent years. Indeed, Russian assistance on the P5+1 sanctions against Iran in 2012 reportedly had played a key role in eventually bringing about the JCPOA. But there is also good historical precedent that suggests Russia is not entirely committed to an international nuclear deal with Iran and that shifting geopolitical pressures can cause it to prefer a proliferating Iran at odds with Washington over a cooperative one friendly to the West. 

For example, U.S. intelligence assessed that Russia supplied Iran with dual-use (or weapons-usable) nuclear technology under the guise of civilian energy in the 1990s and early 2000s — including constructing the Bushehr nuclear reactor, which Washington feared could fast-track a weapons program. Russia was also ambivalent at best about the JCPOA when it was signed in 2015. 

“Russia did not want the agreement to succeed,” former Iranian Foreign Minister Mohammad Javad Zarif stated in a leaked audiotape, “because it was not in Moscow’s interests for Iran to normalize relations with the West.” And in just March of this year, Russia again demonstrated that its commitment to a non-nuclear Iran holds only so long as it is politically expedient; specifically, when linked to easing international sanctions Moscow faced due to the Ukraine war.

Now that recent developments have positioned both Russia and Iran in the crosshairs of U.S. sanctions, the two have sought new avenues for cooperation that circumvent U.S. and international oversight, undermine Washington’s leverage on both fronts, and give Russia a path to scuttle the JCPOA if the pendulum of its nuclear preferences swings back that way. 

The emerging collaboration between Tehran and Moscow has become increasingly explicit in recent months. The two signed an agreement in late May that expanded energy cooperation. Bilateral trade grew by more than 10 percent during the first quarter of 2022 alone. The two also discussed increasing their nuclear energy cooperation, following the same model as the Russian-built Bushehr plant. During his visit to Tehran last month, Russian Foreign Minister Sergei Lavrov noted that both nations faced far-reaching U.S. sanctions and that greater cooperation could counter the “negative influence of the selfish line taken by the United States and its satellites.” 

The military dimensions of these ties have now become even more evident, when in July Iran reportedly agreed to provide Russia with several hundred weapons-capable and surveillance  drones, suggesting that the collaboration Lavrov mentioned will not be limited to peaceful civilian sectors. 

A partnership between Moscow and Tehran based on a mutual determination to oppose western influence could pose serious threats to U.S. and western security interests, especially in the Middle East, including nuclear proliferation. The risk is that the sanctions Washington has increasingly employed to counter these security threats may actually be creating new pathways that inadvertently undermine its goals going forward.

By aligning a nuclear proliferation risk and an aggressive nuclear superpower, sanctions have helped spark a destabilizing partnership that will be difficult to undo.