Iran-US Conflict: How Iran Survives Despite Sanctions & Threats
Despite a direct warning from U.S. President Donald Trump threatening to obliterate Iranian energy facilities, Tehran has escalated tensions by vowing retaliatory strikes against U.S.-affiliated infrastructure in the Middle East.
Iran’s military has declared that companies with U.S. Interests in the region, as well as military bases hosting American forces, will be considered legitimate targets. This announcement, made by Iranian Armed Forces General Staff Spokesperson Brigadier General Ebrahim Jollazadeh, signals a potential broadening of the conflict beyond direct clashes with Israel.
The escalating rhetoric comes as Iran faces a precarious economic situation, exacerbated by years of U.S. Sanctions and recent internal unrest. However, despite these challenges, Iran appears to be preparing for a protracted conflict.
A key factor in Iran’s resilience is its ability to circumvent sanctions through what is known as a “shadow fleet” of oil tankers. These vessels allow Iran to continue exporting oil to countries like China and India, providing a crucial revenue stream. According to reports, as of late last year, Iran was shipping approximately 1.3 million barrels of oil per day to China alone. Some Chinese-flagged vessels have continued to transit the Strait of Hormuz even during heightened tensions.
Beyond oil revenues, Iran benefits from a vast network of religious foundations, known as “Bonyads,” which operate outside of the government’s official budget. These foundations control significant economic assets, estimated to comprise more than 30% of Iran’s central government spending, and provide a separate financial channel for sustaining the war effort. The combination of these financial mechanisms allows Iran to maintain a degree of economic independence despite international pressure.
The United States has framed its actions as necessary to ensure the free flow of traffic through the Strait of Hormuz, a critical waterway for global oil supplies. However, Iran has warned that any attack on its infrastructure, particularly facilities involved in desalination – a vital resource in the arid region – would be considered a grave escalation. An Iranian health ministry official cautioned that targeting water and electricity infrastructure would indirectly lead to the deaths of vulnerable civilians in hospitals.
Trump issued a 48-hour ultimatum to Iran on March 20th, demanding the immediate and unconditional opening of the Strait of Hormuz, threatening to attack Iranian energy facilities if the demand was not met. As of Monday, March 23rd, Iran has not yielded to the ultimatum.
The Iranian government maintains that This proves prepared to withstand a prolonged conflict, believing that time is not on Trump’s side. This assessment is rooted in the belief that a protracted war will impose increasing costs on the United States and potentially erode domestic support for continued military intervention.