It follows Donald Trump’s announcement in May that the US was pulling out of the 2015 nuclear deal. The US president has long argued that it fails to address Tehran’s future nuclear development or prevent the spread of Iranian tentacles abroad.
US-Iranian relations are set to dip further when the first measures come into force, marking the end of the designated three-month wind–down period to allow companies to adapt.
International firms have duly been scaling back their involvement in Iran – while inside the country the economic and political consequences have already been making themselves felt.
Iran – which has threatened to block the Strait of Hormuz in response to sanctions – has sent ships into the strategic Gulf passageway this week as it begins naval exercises, according to US officials who see the move as a challenge to Washington.
What is the likely economic impact in Iran?
Iranians have already been feeling the impact of the collapse of the rial, the country’s currency. In May, after Trump announced the US withdrawal from the nuclear deal, it fell to its weakest position against the US dollar in history. It has now lost more than 80% of its value since April.
Recently many people, angry at high inflation and the increasing economic hardship, have been protesting across the country. State news and social media posts reported demonstrations in several cities on Thursday (August 2). Clashes were reported with security forces in at least one city.