U.S. economic – Misryoum analysis: the Iran conflict highlights how U.S. sanctions have delivered less leverage, reshaping energy and trade risks.
A widening Iran conflict is doing more than testing military tactics. It is also putting the spotlight on a less reliable tool of U.S. statecraft: economic coercion.
Misryoum notes that the keyphrase here is “U.S.. economic coercion,” a strategy the United States has long used to pressure rivals through sanctions.. Over time. however. the effectiveness of that approach appears to be fading as the global economy becomes more multipolar and as other players build alternatives.
Sanctions against Iran have been a central component of U.S.. policy since the late 1970s, aimed at punishing, containing, or isolating Tehran.. Washington used a mix of primary. secondary. and targeted financial measures tied to issues such as terrorism allegations and Iran’s nuclear program.. At one point, U.S.. and European alignment strengthened the impact: coordinated sanctions restricted Iranian access to parts of the banking system. raising pressure on Iran’s economy.
Insight: The crucial shift is not just how hard sanctions are applied, but whether the U.S. can sustain broad financial participation from partners. When that coordination weakens, sanctions can lose their grip.
The 2015 nuclear deal. which traded limits on Iran’s program for sanctions relief. demonstrated how quickly leverage can change when a diplomatic pathway exists.. Yet after the U.S.. exited the deal in 2018 and reimposed sanctions under a “maximum pressure” approach. many firms stayed away from Iran. anticipating further tightening.. Iran responded by pushing forward its nuclear enrichment activities and. as Misryoum points out. gradually developing ways to keep trading and sourcing outside conventional Western channels.
Instead of a return to isolation. Iran’s adaptation included more reliance on non-Western partners and increased use of workarounds for constrained shipping and procurement.. Misryoum also highlights that the conflict environment can reframe sanctions into a forcing mechanism that hardens positions rather than incentivizing compliance.
Insight: Even if sanctions continue to restrict certain flows, they may also reduce the U.S.’ ability to negotiate from strength when the targeted country can pivot to alternative suppliers and routes.
Energy markets are where the costs become especially visible.. As the Strait of Hormuz remains central to global oil and shipping routes. any heightened risk around it can ripple into fuel prices.. Misryoum reports that this places U.S.. policy in a difficult bind: while the U.S.. has deep involvement in energy exports, the downstream effect of geopolitical disruptions can translate into higher costs for consumers.
In this context, the “collateral damage” becomes harder to manage politically and economically. The article’s core argument is that when foreign policy actions interfere with energy trade routes, the resulting price swings can feed back into domestic pressure, limiting maneuvering room.
Insight: The real test of coercion is whether it can achieve foreign-policy goals without triggering large economic blowback at home. If it does, leverage shrinks because the coercer absorbs more of the cost.
Misryoum also ties the erosion of sanctions leverage to broader diplomatic realities.. The ability to pressure effectively historically depended not only on U.S.. power but on building coalitions.. As goodwill with allies appears to weaken and global players diversify their relationships, the gap between U.S.. intentions and economic outcomes can widen.. The result is not the disappearance of U.S.. influence, but a narrower margin to shape behavior through “sanctions-first” strategies.
Insight: For markets and investors, this shift matters because it changes expectations about policy predictability and the likelihood that economic measures will deliver quick, controllable results.