The Weaponization of Finance: How the US Engineered Iran’s Economic Crisis
The US Treasury Secretary, Scott Bessent, recently confirmed a controversial strategy: deliberately creating a “dollar shortage” in Iran to destabilize its economy and incite unrest. This admission, made during a Congressional hearing and further elaborated at the World Economic Forum, reveals a calculated escalation of economic pressure on Iran, with far-reaching consequences for its people and the region.
From Sanctions to Suffocation: A Timeline of Economic Pressure
The current crisis didn’t emerge overnight. It’s the culmination of decades of US sanctions, intensified under President Trump’s “maximum pressure” campaign. The 2018 withdrawal from the Joint Comprehensive Plan of Action (JCPOA), the nuclear deal, marked a turning point, leading to renewed and expanded sanctions targeting Iran’s oil exports and access to the international financial system. The stated goal was to force Iran back to the negotiating table and address concerns over its nuclear program and regional activities.
How a ‘Dollar Shortage’ Works
A “dollar shortage” isn’t simply a lack of physical currency. It’s a systemic disruption of a country’s ability to access the US dollar, the world’s primary reserve currency. This is achieved by blocking key revenue streams – in Iran’s case, oil exports – and restricting access to international banking networks. Secondary sanctions, which threaten penalties to any entity doing business with Iran, effectively isolate the country from global trade and finance. Economist Mohammad Reza Farzanegan of Germany’s Marburg University explains that the US strategy traps Iran’s existing reserves abroad and prevents modern dollars from entering the domestic market.
The Human Cost: Economic Collapse and Protests
The engineered dollar shortage has had a devastating impact on the Iranian economy. The rial plummeted, losing significant value against the dollar, triggering soaring inflation. Food prices rose by an average of 72 percent year-on-year in January 2026. This economic hardship fueled widespread protests beginning in December 2025, met with a brutal crackdown by the government, resulting in an estimated 6,800 protesters killed, including at least 150 children.
Beyond Oil: Targeting Iran’s Financial Lifelines
The US strategy went beyond simply targeting oil exports. It involved a concerted effort to “close off Iran’s access to the international financial system,” as described by Bessent. This included targeting all stages of Iran’s oil supply chain and actively engaging with the private sector to discourage any dealings with Iran, even for essential goods like medicine.
Is This Economic Warfare?
Bessent himself framed the strategy as “economic statecraft,” stating, “no shots fired.” However, critics argue this constitutes economic warfare, deliberately inflicting hardship on a civilian population to achieve political objectives. The long-term consequences include the erosion of Iran’s middle class, a loss of human capital, and increased instability.
The US Endgame and Potential Outcomes
The US has outlined three key demands from Iran: halting uranium enrichment, dismantling its ballistic missile program, and ceasing support for non-state actors in the region. Some observers believe the US seeks regime change in Iran. However, experts like Bruce Fein, a former US associate deputy attorney general, caution that economic sanctions alone are unlikely to topple the current government. He suggests that economic pressure may not promote a successful revolution, as basic survival will become the priority for many Iranians.
Iran’s Resilience and Circumvention Strategies
Despite the intense pressure, Iran has demonstrated a degree of resilience, developing internal mechanisms to circumvent sanctions. Unlike Russia, which has a more diversified economy, Iran has faced sanctions for decades, fostering a sophisticated network for evading restrictions. This makes the “dollar shortage” a continuous game of cat and mouse rather than a decisive blow.
Frequently Asked Questions
- What are secondary sanctions? Secondary sanctions target entities that do business with Iran, even if those entities are not based in the US.
- What is the JCPOA? The Joint Comprehensive Plan of Action was a 2015 agreement limiting Iran’s nuclear program in exchange for sanctions relief.
- How has the rial’s value changed? The Iranian rial has significantly declined, trading at 1.5 million to the dollar in January 2026, compared to 700,000 a year earlier.
- What is the US hoping to achieve? The US aims to compel Iran to renegotiate its nuclear program and regional policies.
Pro Tip: Understanding the intricacies of international sanctions and their impact on economies requires staying informed about geopolitical developments and economic indicators.
Did you recognize? The US has a long history of using economic sanctions as a foreign policy tool, targeting countries like Russia, Cuba, North Korea, and China.
Explore more articles on international economics and geopolitical risk to deepen your understanding of these complex issues. Share your thoughts in the comments below – what do you think is the future of US-Iran relations?
