Factors including a widening poverty gap and distrust of the economic policies of Shah Reza Pahlavi led to violent protests against Iran’s leaders. The Shah left Iran and the remaining politicians were overthrown. Ayatollah Ruhollah Khomeini was voted into office in a national referendum. The US got involved when students stormed the embassy in Tehran and took hostages. President Carter imposed escalating sanctions on Iran, including oil import bans and a freeze on all $12bn of the Iranian Government’s US assets.
On the Inauguration of President Reagan, the embassy hostages were freed after 444 days. All trade sanctions against Iran were removed thanks to the agreements made in the 1981 Algiers Declaration. Much more difficult to lift was the asset freeze: approximately $5bn was made available to repay US banks, and $1.1bn locked in an escrow account held by the Algerian Central Bank. Claims on this money were made through the Iran-US Claim Tribunal that operated from The Hague.
1983 – 87
In October 1983, two truck bombs detonated near buildings housing US and French forces in Beirut, killing 307 people. Iran denied any involvement, although the US began re-employing restrictions and labelled the state a sponsor of terrorism. The sanctions imposed by the US included restrictions on foreign assistance, a ban on arms transfers and export controls on anything that could be adapted for military use. In 1987, this was expanded to include a ban on all Iranian imports to the US.
1995 – 96
Iran announced a $1bn contract with US oil company Conoco to develop oil and gas fields in the region. In response, President Clinton initiated a ban on any US participation in Iranian petroleum development. This was later expanded to a complete ban on US investment and trade with Iran. In order to cripple Iran’s oil and gas fields, the main source of the country’s income, Congress passed the Iran and Libya Sanctions Act of 1996 to encourage foreign companies to restrict investments as well.
2002 – 06
Iran began building its first nuclear reactor, despite US objections. The US, Iran and the UN would have an uneasy relationship regarding the nature of the nuclear programme. No official evidence of a weapons programme was found, but in December 2006 the UN Security Council imposed sanctions on the trade of nuclear materials and technology due to Iran’s lack of cooperation with the International Atomic Energy Agency. Iran continued development and insisted the programme was exclusively for non-military purposes.
2006 – 11
Though they remained in place, US sanctions were rarely enforced until 2006. President Bush’s authority was expanded with the Iran, North Korea and Syria Nonproliferation [sic] Act and the establishment of an office in the US Treasury to enforce the new stricter sanctions. Sanctions were imposed by the US on firms assisting Iran’s nuclear and missile programmes, with prosecutions levelled against people and companies selling weapons and parts. Over 30 arrests were made between 2008 and 2011.
2011 – 13
In December 2011, President Obama signed off on even tougher sanctions designed to target Iran’s financial sector. The effect was crippling, and the freeze on central bank assets made bank-to-bank transactions all but impossible. By this stage Iran’s fleet of aircraft was ageing, oil exports were decreasing and car manufacturing was sliding. Mahmoud Ahmadinejad did not contest the 2013 election and Hassan Rouhani won in a landslide, with promises of a rejuvenated economy thanks to a resolved nuclear deal.
Following confirmation from a watchdog, EU and US nuclear sanctions against Iran were lifted thanks to the decommissioning of certain nuclear facilities. Sanctions against those accused of supporting terrorism remain. More than $100bn of assets have been unfrozen and Iran’s oil can now be sold internationally. Some foreign firms have scrambled to invest, but the confusing number of sanctions has made untangling restrictions difficult. Oil exports are expected to increase soon; 2.5 million barrels per day is possible within the next year.