World

Iran Under Sanctions: How the Regime Still Finances Its War

Herz — World Desk · 22 July 2026 at 05:35 · 30s summary · 3 min read

The essentials

Despite two rounds of US-Israeli strikes since 2025 and severe international sanctions, Iran continues to fund its military operations. According to Die Zeit, Tehran covertly exports oil via a shadow fleet and channels most of these proceeds to its elite military force. China absorbs 80–90% of Iran's oil exports. Iran is also turning to barter, informal monetary channels, and money printing. Analysts suggest that a rapid economic collapse of the regime through blockade remains unlikely.

The US-Israel-Iran conflict began on February 28, 2026; an earlier war lasted 12 days in 2025.
China absorbs 80–90% of Iran's oil exports despite international sanctions.
Iran bypasses sanctions using a shadow fleet of clandestine tankers.
Gray-market oil revenue largely funds the Islamic Revolutionary Guards Corps.
Analysts deem rapid economic collapse of Iran through blockade unlikely.

Illustration image — Unknown authorUnknown author, Public domain, Wikimedia Commons

Conflict Timeline

2025
First twelve-day war between the United States and Israel, on one side, and Iran, on the other.
February 28, 2026
The second conflict begins; the United States and Israel attack Iran again.
2026 (exact date unspecified in source)
Brief ceasefire with temporary easing of restrictions, followed by new escalation around the Strait of Hormuz.

What We Know

The United States and Israel have attacked Iran twice since 2025. The second conflict began on February 28, 2026. The two powers killed leading regime figures and destroyed defense installations, missile launchers, warships, and combat aircraft, according to Die Zeit.

Iran has been subject to strict international sanctions for several years due to suspicions of nuclear weapons development and financing of regional militias.

How Iran Bypasses Oil Sanctions

To export oil despite sanctions, Iran relies on a shadow fleet—a network of clandestine tankers, shell companies, disabled transponders, and forged documents.

China absorbs 80–90% of Iran's oil exports. In return, Beijing enjoys a significant sanctions-related discount.

The majority of billions from this gray-market energy trade flows to the Islamic Revolutionary Guards Corps (IRGC)—Iran's elite military force, equipped with independent air, space, and ballistic branches separate from the regular military. These funds cover salaries, weapons, and logistics.

Escalation at the Strait of Hormuz

A brief ceasefire, accompanied by temporary easing of restrictions, temporarily boosted Iranian revenues. A new escalation around the Strait of Hormuz—a maritime passage in the Persian Gulf between Iran to the north and the United Arab Emirates to the south—then opened a new chapter of the conflict.

The United Arab Emirates, which served as a hub for currency exchange operations and circumventing Iranian sanctions, is becoming increasingly unavailable for this role.