Leyla Rasgeldiyeva
Middle powers are increasingly facing the challenge of preserving their strategic independence amid intensifying competition among major powers. Countries such as Pakistan, Türkiye, and the Central Asian republics continue to balance their engagement between U.S.-led financial networks and growing economic ties with the East. In this context, Iran offers an instructive case study of a country that has endured sustained external pressure aimed at limiting its regional influence.
For decades, the United States, the European Union, the G7 countries, and their allies have imposed extensive economic sanctions on Tehran to alter its behavior. Recent developments demonstrate that even the most comprehensive sanctions have their limits. Complete isolation has not always been achievable; for example, the U.S. Treasury’s issuance of General License X temporarily created a limited opportunity for certain oil transactions. Iran’s survival strategies provide valuable insights into how middle powers can respond to prolonged economic pressure.
The key policy question is why economic sanctions often fail to achieve their intended objectives. Global trade has repeatedly demonstrated its ability to adapt quickly to restrictive measures. Sanctions are designed on the assumption that economic hardship will compel political concessions, yet Iran has not collapsed. Instead, it has adapted by developing alternative economic mechanisms that exploit weaknesses in the sanctions regime. Its resilience has largely been driven by transforming legal restrictions into new trade opportunities.
According to maritime intelligence firm Vortexa, Iranian oil exports increased to approximately 1.8 million barrels per day, with nearly 90 percent destined for independent Chinese refineries, commonly known as “teapots,” including facilities such as Haiye Oil in Qingdao. To facilitate these exports, Tehran has developed a sophisticated “shadow fleet” of tankers that employ methods such as reflagging vessels under neutral countries and disabling location transponders during voyages.
However, a realistic assessment of this strategy reveals significant domestic costs. On one hand, Iran has strengthened its strategic autonomy. Despite lacking access to advanced American and European military technology, it has developed indigenous, cost-effective capabilities, including drones and precision-guided missiles, some of which have been exported to other countries.
Similarly, after being excluded from the SWIFT banking system, Iran established financial alternatives through digital assets. According to an official investigation by the U.S. Department of the Treasury, Iran’s largest cryptocurrency exchange, Nobitex, facilitated more than half of the country’s cryptocurrency transactions, providing an alternative mechanism to circumvent international banking restrictions.
On the other hand, these unofficial economic channels have weakened the domestic economy. The expansion of black-market trade, including discounted oil sales, has contributed to inflation and imposed significant costs on ordinary citizens. The experience offers an important lesson for middle powers such as Pakistan and Türkiye: while alternative economic networks can help countries withstand external isolation, they may also undermine domestic economic stability and create unhealthy dependencies on other major powers.
Perhaps the most significant aspect of Iran’s strategy—and the one most relevant to its regional neighbors- has been its emphasis on land-based connectivity. Recognizing that maritime trade can be disrupted by hostile naval forces, Iran has increasingly invested in regional integration through non-Western organizations such as the Shanghai Cooperation Organization (SCO). A notable example is its support for land-based trade corridors, particularly the International North-South Transport Corridor (INSTC).
According to a strategic assessment by the Belfer Center for Science and International Affairs, the Kazakhstan-Turkmenistan-Iran railway corridor is expected to become one of the world’s busiest trade routes by 2030, potentially handling twice its current freight volume. This corridor provides Central Asian states with greater access to international markets while reinforcing Iran’s position as a vital regional transit hub.
For middle powers, this approach offers a practical lesson. Building resilient regional connectivity and diversified transport networks can provide greater protection against external economic restrictions than relying solely on political assurances or diplomatic goodwill.
Iran’s recent experience offers valuable lessons for middle powers navigating an increasingly uncertain international environment. The central lesson is that strategic independence begins long before a crisis emerges. Countries should diversify trade relationships, develop alternative infrastructure, and strengthen regional economic integration during periods of stability rather than waiting until external pressure intensifies.
At the same time, Iran’s experience demonstrates that military self-reliance alone cannot substitute for a healthy and open economy. The most sustainable path lies in building robust regional partnerships that promote mutual economic resilience, strengthen national security through interdependence, and reduce the risks of confronting geopolitical challenges in isolation.
The author is a scholar of International Relations with academic interests in global politics, diplomacy, and international security. She also has a strong interest in the current geopolitical developments and aims to make research and analytical writing a valuable tool for informed policy discussions.
