Will U.S. Sanctions Push Iran Back to Negotiations and Can the IRG Yield Power
Bud Ayer
London, UK - Sanctions have squeezed Iran for decades, but pressure alone has not settled the central question: can economic pain make Tehran change course, or does it simply harden the system that Washington wants to influence?
That question matters because U.S. sanctions now sit at the center of almost every major Iran policy debate. They affect oil exports, access to foreign currency, banking ties, shipping, insurance, and the ability of ordinary Iranians to participate in the global economy. They also shape Tehran’s calculations over its nuclear program, regional activity, and relationship with Russia and China.
The answer is not simple. Sanctions can push Iran toward talks when leaders see diplomacy as a way to reduce risk and regain revenue. They can also strengthen hardliners, especially the Islamic Revolutionary Guard, often known as the IRGC and sometimes shortened to IRG, by making the economy more closed, securitized, and dependent on networks the Guards know how to control.
Sanctions have hurt Iran, but history shows they work best with an off-ramp
U.S. sanctions on Iran did not begin with the nuclear dispute. They date back to the 1979 revolution and the hostage crisis, then expanded over terrorism concerns, regional conflicts, missile development, and nuclear activities. Over time, Washington built one of the world’s most complex sanctions systems.
The most powerful measures have not been simple trade bans. They have been secondary sanctions, which threaten non-U.S. companies and banks with penalties if they do business with targeted Iranian sectors. That approach gives U.S. sanctions global reach because many banks and firms need access to the American financial system.
The clearest case where sanctions helped produce negotiations came before the 2015 nuclear deal, formally known as the Joint Comprehensive Plan of Action. U.S., European, and United Nations pressure restricted Iranian oil sales and financial access. At the same time, Iran faced domestic economic strain and a political opening after Hassan Rouhani’s 2013 election.
Sanctions did not act alone. They worked with:
A focused demand centered on nuclear limits
Multilateral backing from Europe, Russia, and China
A clear path to sanctions relief
Iranian political leaders willing to sell compromise at home
That mix produced a deal. It also showed the limits of coercion. When the Trump administration withdrew from the agreement in 2018 and restored sanctions under a “maximum pressure” campaign, Iran did not accept broader U.S. demands. It gradually breached nuclear limits, expanded enrichment, and waited for a better political moment.
Many sanctions experts draw the same lesson. Former U.S. sanctions officials and Iran analysts have often argued that sanctions can create pressure, but they rarely produce surrender. Richard Nephew, a former U.S. official involved in Iran sanctions policy, has written publicly that sanctions need realistic goals and a diplomatic exit. The International Crisis Group has made a similar point in its reporting: pressure without a credible bargain can trap both sides in escalation.
That history suggests U.S. economic sanctions on Iran can bring Tehran back to negotiations, but only under specific conditions. The regime must believe that talks will produce real relief, not just new demands. It also must believe the alternative is worse than compromise.
Iran may negotiate, but not from weakness alone
Iran’s leaders have a long record of negotiating under pressure while refusing to appear defeated. This matters because the Islamic Republic places high value on deterrence and revolutionary legitimacy. If talks look like capitulation to Washington, hardliners can attack them as betrayal.
That does not mean Tehran avoids diplomacy. Iran negotiated during the Iran-Iraq War, accepted the 1988 ceasefire, engaged in nuclear talks across several administrations, and entered the 2015 nuclear deal. It has also used indirect channels through Oman, Qatar, the European Union, and other mediators.
Sanctions could push Iran back toward negotiations if several pressures converge.
Oil revenue falls sharply
Iran depends heavily on energy exports for hard currency. If enforcement cuts oil sales or makes payment channels more difficult, Tehran may look for relief. In recent years, China has remained a crucial buyer of Iranian oil, which has softened the effect of U.S. pressure. If that outlet becomes less reliable, the pressure rises.
Inflation and currency weakness become politically dangerous
Ordinary Iranians have faced high inflation, a weaker currency, job insecurity, and shortages tied to sanctions and domestic mismanagement. Economic anger has fueled protests, though not always around foreign policy. If leaders fear unrest will spread across social classes, they may seek a deal to stabilize conditions.
The nuclear program reaches a riskier point
As Iran advances its enrichment capacity, the chance of military confrontation grows. Tehran may use nuclear progress to gain bargaining power, then pause or limit parts of the program in exchange for relief. This is risky, but it fits past Iranian negotiating behavior.
A U.S. offer becomes specific and credible
Iranian officials often argue that Washington cannot be trusted after leaving the 2015 deal. Whether that claim is strategic or sincere, it affects negotiations. A future U.S. offer would need clear relief, sequencing, and some way to survive political change in Washington.
At the same time, sanctions can backfire. If Tehran sees no realistic path to relief, it may choose resistance. If leaders believe Washington wants regime change rather than policy change, they have less reason to compromise. If the Guards profit from sanctioned trade, they may resist opening the economy.
That is why sanctions are more likely to produce limited negotiations than a full strategic reset. A narrow nuclear bargain, prisoner exchanges, or regional de-escalation talks are more plausible than a grand bargain covering Iran’s entire foreign policy.
The IRG is more than a military force
The Islamic Revolutionary Guard was created after the 1979 revolution to protect the new Islamic Republic. It was designed as a counterweight to the regular army and as an ideologically loyal force. The Iran-Iraq War gave it prestige, territory, networks, and a powerful place in the state.
Today, the IRG is not just a military institution. It has influence across security, politics, media, intelligence, regional policy, and parts of the economy. Its elite Quds Force has played a major role in Iran’s relationships with armed groups and political allies across the Middle East. Its commanders also influence debates over deterrence, missile development, and nuclear strategy.
The Guards’ economic role grew through reconstruction contracts after the Iran-Iraq War, privatization, and sanctions. When foreign companies left or avoided Iran, domestic networks linked to the IRG and other state-connected actors filled gaps in construction, energy, smuggling, ports, telecommunications, and procurement.
This gives the IRG several sources of power:
Control over coercive tools
Access to hard-currency networks and sanctioned trade
Ideological legitimacy with core regime supporters
Influence over candidate vetting and political boundaries
A major role in regional security strategy
Iran specialists such as Suzanne Maloney and Karim Sadjadpour have often described Iran’s system as a blend of ideology, security control, patronage, and factional competition. Their broad point is useful here: the Guards do not rule alone, but they are deeply embedded in the system. They operate alongside the Supreme Leader’s office, clerical institutions, elected bodies, intelligence services, and business networks.
That makes the question of whether the IRG would yield power far more complex than asking whether a military group might step aside after pressure. The Guards are not outside the state. In many key areas, they are part of how the state works.
Sanctions may strengthen the IRG rather than weaken it
One of the central paradoxes of sanctions is that they often hurt society more broadly while giving well-connected state actors more room to control scarce resources. This is especially true in countries where security institutions can manage smuggling, front companies, currency channels, and informal trade.
In Iran, sanctions have weakened private businesses that need stable banking ties, imported inputs, and foreign investors. By contrast, groups with political protection and access to closed networks can survive, and sometimes gain market share.
This does not mean every IRG-linked actor benefits from sanctions. Sanctions can damage state revenue, complicate procurement, and increase public anger. Senior commanders also understand that prolonged economic decline can threaten the system they defend.
Still, sanctions tend to favor those who can operate in a restricted economy. The IRG has experience doing exactly that. This reduces the chance that sanctions alone will make the Guards support a more moderate political order.
A more open economy could threaten their privileged position. Foreign investment, banking transparency, and reduced smuggling opportunities would shift power toward technocrats, private firms, and internationally connected institutions. That is one reason hardliners often frame economic opening as a security risk.
There is also a political reason. The IRG sees itself as the guardian of the revolution, not just a stakeholder looking for profit. Many commanders view compromise with Washington through the lens of past conflict, assassination campaigns, cyber operations, regional rivalry, and U.S. support for Israeli and Gulf Arab security. In that worldview, pressure confirms the need for resistance.
The chance of the IRG relinquishing control is low without a wider political shift
The likelihood of the Islamic Revolutionary Guard voluntarily relinquishing power for a more moderate regime is low. That does not mean Iran cannot change. It means the mechanism of change would probably not be a simple handoff from hardliners to moderates.
Several barriers stand in the way.
The Supreme Leader’s succession matters
Ayatollah Ali Khamenei has been Iran’s Supreme Leader since 1989. Succession will be one of the most important political moments in the Islamic Republic’s history. The IRG is likely to play a major role in maintaining order and shaping the space in which clerical and political elites decide the future. A moderate opening could come from elite bargaining, but the Guards would seek guarantees for their interests.
Moderates have limited institutional room
Iran has elected presidents and parliaments, but the system restricts candidates through vetting bodies and unelected institutions. The experience of reformist and moderate leaders, from Mohammad Khatami to Hassan Rouhani, showed that electoral victories do not automatically translate into control over security policy.
The protest movement is broad but fragmented
Iran has seen major waves of protest over elections, economic hardship, fuel prices, corruption, and social restrictions. The 2022 protests after the death of Mahsa Amini showed deep public anger, especially around women’s rights and state coercion. Yet protest energy has not translated into an organized alternative with enough force to displace the security state.
The IRG has too much to lose
Power is not only political. It includes legal immunity, economic holdings, intelligence networks, and regional influence. For the Guards to accept a more moderate order, they would likely demand protection from prosecution, preservation of some economic interests, and a continued role in national defense.
The most plausible path is not the IRG disappearing from politics. It is some form of negotiated recalibration, where the Guards keep core security influence while allowing limited economic or diplomatic opening. Even that would require a strong reason, such as severe economic crisis, elite division, succession uncertainty, or public pressure that threatens regime survival.
Future scenarios range from narrow diplomacy to deeper confrontation
Iran’s next move will depend on pressure, leadership calculations, regional conflict, and U.S. policy. Four scenarios stand out.
Scenario | What it would look like | How likely it appears |
Limited return to nuclear talks | Iran agrees to caps, monitoring, or pauses in exchange for targeted sanctions relief | Plausible if both sides want to avoid war |
Managed stalemate | Sanctions remain, Iran adapts, and talks continue indirectly without a major deal | Very plausible based on recent patterns |
Escalation and miscalculation | Nuclear advances, proxy conflict, or military strikes trigger a wider crisis | Possible, especially during regional conflict |
Internal political shift | Elite succession, protests, or economic breakdown force changes inside the system | Possible over time, but hard to predict |
The first scenario is the most practical diplomatic path. It would likely be smaller than the 2015 deal and focused on urgent nuclear limits. Both sides may avoid calling it a major agreement to reduce domestic backlash.
The second scenario may be the default. Iran has learned to survive sanctions through oil exports to willing buyers, barter, currency controls, and informal networks. The United States has learned to maintain pressure without direct war. This balance is costly, unstable, and unsatisfying, but it can last.
The third scenario is the danger. Sanctions can signal resolve, but they can also narrow options. If Iran concludes that economic pressure will never end, it may expand nuclear activity or rely more on regional deterrence. If Washington or Israel sees Iran nearing a red line, military action becomes more likely.
The fourth scenario attracts the most attention but is the least predictable. Economic strain can weaken legitimacy. It can also push the state to repress harder. A more moderate regime would require more than sanctions. It would require organization, elite splits, leadership change, and institutions capable of replacing the current order.
What sanctions can and cannot do
U.S. sanctions can raise the cost of Iran’s choices. They can reduce revenue, slow investment, complicate weapons procurement, and create incentives for negotiation. They can also give Washington bargaining power when paired with clear goals and credible relief.
They cannot, by themselves, decide Iran’s political future. They cannot guarantee moderation. They cannot force the IRG to abandon its role if the Guards believe survival, ideology, and privilege are at stake. In some cases, sanctions may even deepen the IRG’s control by weakening more open parts of the economy.
The most likely outcome is not sudden transformation. It is a contest between pressure and adaptation. Iran may return to negotiations if leaders see a deal as useful for regime stability, especially on the nuclear file. The IRG may accept tactical compromise if it protects the system and preserves its core power. But a voluntary handover to a moderate regime remains unlikely without a larger internal political shift.
Sanctions are a tool, not a strategy. Their impact depends on what they are connected to: diplomacy, deterrence, regional policy, and an understanding of how power actually works inside Iran.
