The return of UN sanctions under snapback mechanism in October 2025 has pushed Iran’s trade environment into what officials describe as a “high-risk mode,” reviving financial and maritime restrictions and triggering a new wave of uncertainty across supply chains. Although the sanctions formally target only dual-use and sensitive goods, their practical spillover has affected almost every stage of import and export operations—from shipping schedules and insurance costs to certification and partner willingness.
Mohammad Ali Emami, director-general for supply and logistics at the Trade Promotion Organization, says two of the six UN resolutions deal directly with economic activity: one affects financial and banking channels, and the other limits logistics and trade operations. “Once the snapback mechanism is activated, unpredictability spreads through the entire system,” he said, noting that the result is higher risk, higher costs and more frequent disruption. Importers increasingly worry about delayed or detained cargo, while shipping lines show less willingness to handle Iranian consignments.
Rising logistics costs illustrate the pressure clearly. While global logistics typically represent 8–12% of trade costs, Iran’s ratio has climbed to roughly 24%. Part of this gap stems from structural weaknesses—aging fleets, border bottlenecks, shortages of refrigerated containers—but Emami argues that sanctions intensify every vulnerability. “Higher insurance premiums, repetitive changes in bills of lading and rerouted shipments all push the final cost up,” he said. These rising costs eventually feed into domestic inflation, higher production expenses and weaker export competitiveness.
Because most of Iran’s imports—raw materials, machinery and capital goods—arrive by sea, maritime trade is facing the heaviest pressure. Sanctions limit port access, force shipments through intermediary hubs such as Jebel Ali, and in some cases require diversion to secondary ports far from the intended destination. Emami cited Shanghai as an example, where Iranian vessels cannot unload directly and must divert to a lower-tier terminal nearly 200 kilometers away, adding time and cost.
Partial Relief
Land and rail routes offer only partial relief. Rail fleets lack the permits and standards required for broader international operations, and refrigerated capacity is insufficient—problems that become acute in food shipments to northern markets such as Russia and Belarus. Weather disruptions, technical delays and politically driven restrictions also add friction. According to Emami, “Azerbaijan has at times created obstacles for Iranian food exports to Russia,” highlighting the strategic risk of single-route dependence.
Fragmented border management adds another domestic layer of cost. Instead of a single customs authority, multiple agencies—provincial, regulatory and security bodies—often make parallel decisions, complicating routine processes. Some partner countries also fail to uphold bilateral transit commitments, raising uncertainty for both road and rail operators. In Central Asia, differing rail gauges and wagon shortages lengthen transit times through additional unloading and reloading requirements.
Looking ahead, Iranian trade authorities are planning for three scenarios: a relief phase, cyclical tightening or more restrictive pressures. Current strategies include diversifying routes and markets, accelerating the Iran–China rail corridor, using neighbors’ logistics infrastructure, forming joint production platforms and expanding barter-based frameworks that reduce reliance on formal banking. Shared free zones with aligned regulations are also under discussion.
Despite the turbulence, Emami maintains that sanctions do not shut down trade entirely: “Sanctions make trade expensive, slow and unpredictable—but not impossible.” He argues that reducing domestic inefficiencies—from customs procedures to currency rules—is as important as navigating external pressure. Without internal reform, the snapback will steadily raise transaction costs and erode Iran’s competitive position within regional value chains.
