The United States has imposed more than 1,000 sanctions on Iran over the past 18 months in a campaign to force Tehran into submission, but the regime has largely sidestepped the measures, according to a Wall Street Journal analysis published Sunday. Iran earned an estimated $43 billion in oil revenue in 2024, primarily by selling crude to China, weakening Washington’s leverage in negotiations.
A deal signed this week between the White House and Iran offers to ease sanctions in return for the free movement of shipping through the Strait of Hormuz, and includes an offer to permanently lift restrictions if Tehran takes steps to dismantle its nuclear program. The Trump administration was forced to physically blockade Iran’s ports to stem oil exports and bring the regime to the negotiating table, the Journal reported.
The White House acknowledged the sanctions system requires rethinking. Treasury Secretary Scott Bessent said in a May speech that the administration is “reviewing outdated and obsolete designations.” He said sanctions “should not linger so long that their intended effects create unintended consequences.” The U.S. slowed the overall pace of sanctions designations last year even as it intensified penalties against Tehran.
Treasury officials said the actions disrupted “tens of billions of dollars in revenue that would be used to fund terrorism.” The U.S. has targeted ships moving oil for Iran, its weapons procurement networks, and its access to cryptocurrency and shell companies that move dollars through the global financial system.
Despite those efforts, Iran’s ability to keep generating revenue illustrates a broader pattern: U.S. economic pressure has largely failed to cow adversary regimes, according to the Journal’s analysis. North Korea continues to develop its nuclear program and is wealthier than ever. Russia’s economy has suffered since its war with Ukraine, but President Vladimir Putin still pursues the conflict. Venezuela’s Nicolás Maduro survived sanctions for a decade and was only removed when U.S. forces physically dragged him from power.
Analysts said the failure is one of enforcement rather than design. Avi Vishnevitz, a senior research fellow at the Center for Research of Terror Financing, said “the sanctions themselves were not soft. What proved too soft was their implementation and their enforcement.”
Iran, Russia, and North Korea have built elaborate apparatuses to skirt financial blockades. They use shell companies and middlemen in China, the United Arab Emirates, and Turkey to continue exporting and importing essential goods, according to Treasury officials. In 2024, U.S. authorities blacklisted Iranian businessman Ramin Jalalian, who they said set up front companies in Hong Kong and the UAE that moved $30 million, including payments for sanctioned Iranian oil. The Treasury said Jalalian continues to operate through new front companies.
China’s financial system and the yuan have become central to evasion efforts. China is Iran’s biggest oil client, and Chinese banks move proceeds from oil sales to Iranian front companies to buy goods and services, Western officials said. No Chinese bank has been sanctioned by the U.S. for facilitating payments for Russia, according to a November report to Congress by the bipartisan U.S.-China Economic and Security Review Commission. Last year, the European Union sanctioned two small regional lenders for the first time.
Elaine Dezenski, a former senior Department of Homeland Security official now at the Foundation for Defense of Democracies, said failing to enforce sanctions more rigorously gives regimes time to find solutions. “Once those alternatives are in place, we lose the leverage,” she said.
Some sanctions contain loopholes by design. Sanctions on Russia after its invasion of Ukraine allowed some sales of Russian energy to Europe. While sanctions on Russian crude have been expanded under the Trump administration, the war with Iran and subsequent increase in oil prices forced President Trump to pull them back since March, the Journal reported. Economic analysts said those measures provided an additional $2.4 billion for Russia in May alone.
Max Meizlish, a former sanctions enforcement officer at the U.S. Treasury, said he fears that because regimes are successfully evading sanctions, people will increasingly view them as impotent. “That’s just the wrong lesson to learn,” he said. “The tool itself is just a tool. You wouldn’t say that a gun just doesn’t work; you would ask about how you’re actually using it.”
Technological advancements, including cryptocurrencies, are making sanctions harder to enforce, the Journal reported. North Korea made more than $6 billion in recent years from stealing cryptocurrencies, according to analytics firm Chainalysis, helping fund a construction boom in Pyongyang.
The U.K. government estimates that global sanctions have deprived Russia of at least $450 billion. Russia’s economy is expected to grow a modest 1% this year, and domestic pressure on Putin appears to be growing, according to the Journal. But Russia has found workarounds through undeclared trade that moves through Armenia, Azerbaijan, and Kazakhstan to supply its military industry and import consumer goods.
The Journal report noted that sanctions have succeeded in the past. In the 1980s, global measures including a U.S. ban on investments and loans to the white-minority government in South Africa helped force an end to apartheid. Obama-era penalties on Iran’s banking sector forced its leadership to negotiate a nuclear deal that was later scrapped by the first Trump administration. Since then, Iran has created a system of oil sales to China that has helped blunt U.S. sanctions, researchers said.