Governments that achieve international pariah status typically face significant economic distress, eventually acquiescing to the demands of their own people or falling in an acrimonious overthrow.
But the Islamic Republic of Iran, encumbered by US and international sanctions and decades of pent-up domestic unrest, is no typical government.
Despite those sanctions against thousands of Iranian companies and citizens, the Islamic Republic has shown extraordinary resilience in its 45-year history — and keeps getting richer, with the Iranian economy officially doubling since President Biden took office in 2021, according to the state-run Tasnim News Agency.
The Post spoke to foreign policy experts in Washington, DC, about how Tehran is getting richer, and the role in which Biden’s tepid Iran policy has allowed this to happen.
In the past four years, Iran’s GDP surged 3-5%, with oil exports hitting a six-year peak in April.
The country’s crude exports in March averaged 1.61 million barrels per day, double the average of 775,000 barrels during Donald Trump’s presidency, according to tanker tracker data.
The IMF projects that 2024 will be the third consecutive year where Iran’s GDP outpaces that of the US, with Iranian national income expected to grow 12.1% between 2022-2024 compared to 6.1% in the US.
Tehran has also seen record-high non-oil exports year after year during Biden’s presidency, with IMF figures showing Iran’s export of electricity and techno-engineering services surging from $67 billion in 2020 to $120 billion in 2023.
Meanwhile, Tehran is tightening ties with China and Russia — including exports of at least 1,000 suicide drones and unmanned aerial systems worth millions of dollars to Moscow that have been critical for Vladimir Putin’s war in Ukraine.
Tehran also continues to develop nuclear weapons, which when placed on ballistic missiles threaten not just Israel but could also reach America.
Recent figures by watchdog United Against Nuclear Iran (UANI) found that since 2021, Iran sold a record $90 billion worth of US-sanctioned oil to countries like China and India.
“China has kept the Iranian regime coffers full through oil sales,” said UANI policy director Jason Brodsky. The $90 billion of oil sales have real-world impact, Brodsky adds, “as they resource Tehran’s proxy and partner network’s lethal attacks against Israel and US interests.”
Chaos in the Middle East is likely to persist as Tehran’s oil revenues soar unabated. Hezbollah, on the brink of war with Israel, receives $700 million a year from its key patron in Tehran, according to Israeli Defense Minister Yoav Gallant.
Meanwhile, Iran’s annual funding for Hamas last year surged from $100 million to about $350 million, according to an Israeli security source.
Tehran’s oil revenues impact America directly; 32 of the 1,200 people killed by Tehran-sponsored Hamas terrorists on Oct. 7 were American citizens. Iran-backed militias in Iraq, Syria and Jordan also launched deadly attacks on American forces more than 170 times since last October.
Biden’s Iran policy is woefully fanciful, according to Saeed Ghasseminejad, a senior Iran and economics advisor at the Foundation for Defense of Democracies (FDD). “Tehran is selling more oil because Biden decided to loosen the screw of US sanctions,” he added.
One example of Biden’s acquiescence came in June 2023 when the US granted Iraq a sanctions waiver to pay Iran $2.7 billion in natural gas and electricity debt, something that would have not been allowed under Trump.
Two months later, the White House granted Tehran access to $6 billion in oil assets frozen in South Korea in exchange for the release of five American hostages detained in Iran.
Restoring deterrence and enforcing oil sanctions have never been part of Biden’s Iran strategy, said Lisa Daftari, editor-in-chief of The Foreign Desk. “Even before getting into the White House, Biden signaled his interest in negotiating another nuclear deal with Tehran, which only served to boost the regime’s confidence.”
While the White House hasn’t provided Tehran actual sanctions relief — and has even levied new penalties on the regime — it has failed to rigorously enforce existing sanctions that prevent foreign nations and companies from doing business with the Islamic Republic, argues Ilan Berman, senior vice president of the American Foreign Policy Council.
“Currently, the US governmental agency tasked with interdicting Iran’s illicit oil trade, known as Homeland Security Investigations (HSI), doesn’t have the funding to carry out seizures of Iranian oil shipments,” Berman said.
The lack of funding for HSI is why late last year Sen. Joni Ernst (R-Iowa) introduced the Iran Sanctions Enforcement Act to establish a $150 million fund to bankroll HSI’s future enforcement of sanctions against Iran’s illicit exports.
Those exports include plenty of illicit oil, which Tehran provides to China at steep trade discounts.
Tehran charges Beijing as little as $37 per barrel compared to the global average $75-85 in the past year, according to Iran International, an anti-regime media outlet.
Discounted Iranian oil is already an attractive proposition, but when the risk of trading that sanctioned oil is low, players like China see it as an opportunity too good to pass up.
Michael Rubin, a senior fellow at the American Enterprise Institute (AEI), says there’s a clear link between strong sanction enforcement and the need for Iran to sell oil at a discount.
“At the height of sanctions [under Trump], this meant taking 50% off the top, but with the lifting and non-enforcement of sanctions, that discount has dropped to 15% and perhaps now to less than 5%.”
The regime has also found ways to deliver heavily sanctioned oil undetected in international waters.
In May 2024, UANI discovered 416 foreign vessels surreptitiously involved in the illicit transfer of Iranian crude oil and petroleum products.
A frequent tactic employed by this ‘ghost armada’ to evade oil sanctions included “flag hopping,” where the ship repeatedly changed its flag to non-sanctioned national registries to avoid drawing attention.
Oil isn’t the only way Tehran is raising much-needed revenue.
Gabriel Noronha, a former special advisor for Iran in the US State Department, said that Tehran’s clerical leadership is taxing the Iranian public to subsidize its international terrorism, military adventurism and corrupt construction projects.
“Since 2021, the regime’s taxes collected from Iranians have soared over 400%, and now account for more than half of Iran’s budget.”
The result: Ordinary Iranian citizens are struggling economically and they know their government isn’t going to help.
That’s one reason why the country has recently been engulfed by the “Hamster Kombat” crypto craze, an app promising desperate Iranians to earn redeemable points and cash by completing in-app tasks.
Noronha added that 60% of Iranians live under the poverty line not because of US sanctions, which primarily impact the regime’s ability to fund terrorism, but because “the regime doesn’t care about investing in education, infrastructure, water development, or any of the advanced economic sectors needed to take Iran into the economic future like its neighbors in Saudi Arabia and the UAE.”
Within a month of entering the Oval Office, in February 2021, Biden repudiated Trump’s Iran strategy and announced his intention to negotiate with Iran a return to the 2015 Obama-era nuclear deal.
The Biden administration’s policy of quiet diplomatic compromise and “maximum deference” to Iran represented a sharp reversal of the aggressive “maximum pressure” strategy adopted by former President Trump. His administration sanctioned Iran’s supreme leader’s office, the IRGC and Central Bank to curtail the regime’s nuclear program and financing of regional terrorism.
State Department figures from April 2019 found that the Trump administration, which exited the Iran nuclear deal in 2018, designated more than 970 Iranian entities and individuals in more than 26 rounds of sanctions — the most implemented in any presidential term.
As a result, more than 20 countries that had been regular purchasers of Iranian oil zeroed out their imports.
Detractors of US-imposed sanctions contend that those trade restrictions harm Iranian citizens already crippled by inflation and high unemployment more than they weaken the regime.
“Without proper investments, the Iranian economy may not collapse in the way that the sanctions proponents desire, but it will be deprived of its full potential,” said Trita Parsi, executive vice president at the Quincy Institute for Responsible Statecraft.
Parsi added that sanctions typically impose maximum pain immediately after their imposition, “but after a while, the target economy adjusts and finds a new equilibrium. Iran has not been an exception.”
But for Andrew Ghalili, a senior policy analyst at the National Union for Democracy in Iran (NUFDI), the only language Tehran understands is aggression rather than constraint, adding that when the US has historically appeased Tehran, it hurt Iranian people and harmed American interests.
NUFDI data show that executions in Iran, the regime’s military expenditure and its nuclear weapons program all increased significantly when Biden and Obama appeased, rather than sanctioned, the regime.
The clerical leadership never spends its profit from oil exports on ordinary Iranian citizens. Ghalili cited Iran’s military expenditure as a pertinent example, “which sunk to roughly $3 billion in 2020 and is now above $10.3 billion — all of this is occurring while the regime also escalates its brutalization of the Iranian people.”
Jonathan Harounoff is the author of the forthcoming book “Unveiled: Inside Iran’s #WomenLifeFreedom Revolt.”