How Iran’s economy survives war

by AZADEH AKBAR
Special contributor
TEHRAN, (CAJ News) – IRAN has reported a striking increase in oil-export revenues despite the war with the United States and Israel, highlighting the economic mechanisms that have helped Tehran absorb extraordinary military and financial pressure.

According to Iran’s Oil Ministry, cited by Fars, $7.5 billion in foreign-currency oil proceeds was transferred to the central bank during the first four months of the Iranian year — about 50% more than during the same period last year.

US sanctions, infrastructure damage and restrictions on shipping have severely constrained exports.

Reuters reports that flows through the Strait of Hormuz have fallen dramatically, while Iranian oil exports were also hit by a US naval blockade.

So how has Tehran remained financially functional?

First, Iran possesses enormous hydrocarbon reserves and a long-established export network.

Secondly, sanctions have forced the country to develop alternative trading, financial and shipping arrangements.

China remains Iran’s largest crude customer and an important economic lifeline.

Thirdly, war itself can alter the energy equation.

Disrupted global supplies push prices higher, increasing the value of barrels that successfully reach international buyers.

Iranian officials have attributed the revenue increase partly to global energy-price movements and changes in supply volumes.

Iran’s resilience also reflects decades of adapting to sanctions.

Domestic production, state-controlled strategic sectors and alternative commercial channels have reduced the immediate impact of economic isolation, although ordinary Iranians continue to bear substantial costs.

The nuclear question adds another layer.

The International Atomic Energy Agency (IAEA) has said Iran possesses uranium enriched to as much as 60%, considerably above civilian power requirements but below the roughly 90% level generally associated with weapons-grade material.

The IAEA has also demanded greater access and information about Iran’s remaining nuclear stocks.

Does that mean Iran is close to a bomb? Not necessarily.

Enriching uranium is only one component of developing a deliverable nuclear weapon, and the current uncertainty over Iran’s facilities and stockpiles makes precise assessment difficult.

Yet the strategic logic is unmistakable.

Nuclear weapons can deter existential attacks because the prospect of devastating retaliation raises the cost of military action.

They do not, however, make a country invulnerable.

Iran’s experience demonstrates a broader lesson: military superiority alone does not guarantee economic collapse.

Energy resources, alternative trading partners, domestic capacity, geography and strategic deterrence can collectively create remarkable resilience — even under extreme pressure.

– CAJ News