Comparative Analysis of U.S. Oil Sanctions Against Iran and Russia

U.S. oil sanctions against Iran and Russia, as part of the broader foreign policy strategies of the United States, have had differing impacts on the economies of these two countries. This article aimed to identify the similarities and differences between U.S.-imposed oil sanctions—both primary and secondary—against Iran and Russia. Using thematic analysis and the MAXQDA software, this study conducts a comparative analysis of U.S. oil sanctions targeting Iran and Russia. The findings indicated that although oil sanctions against Iran and Russia pursue similar overarching objectives, they differ significantly in terms of their intensity and scope. According to one of the key findings, while both countries have been subjected to “asset-freeze” sanctions in various cases and for different reasons, the asset-freeze sanctions imposed on Iran have been far more severe and extensive. For example, the National Iranian Oil Company is subject to asset-freeze sanctions, whereas Russia’s largest oil company, Rosneft, has not yet faced such sanctions. The experiences derived from sanctions, considering the anti-sanctions infrastructures in Iran and Russia, underscore the necessity of establishing structured cooperation to utilize mutual capacities. Such cooperation can prevent negative competition between the two countries in addressing sanctions and contribute to increasing efficiency and success in overcoming sanctions imposed on both countries.

Introduction

In recent decades, the Islamic Republic of Iran and Russia—two influential players in the global energy market—have become targets of U.S. oil sanctions. These sanctions, imposed for various reasons including the deliberate weakening of both nations' economies, have resulted in significant geopolitical and economic repercussions for the countries involved as well as for the international system. Given that oil remains one of the most influential and vital components of the global economy, this article examines the sanctions imposed on two of the largest oil-producing and exporting nations.

Conceptual Framework

Economic sanctions refer to non-military measures imposed by one country that adversely affect the transfer of goods, services, or financial assets to a specific foreign nation. The goal of these sanctions is either to warn or punish that nation, or to compel it to conform to certain political goals, or to signal the sanctioning country’s disapproval of its actions and behavior. Sanctions serve as an instrument for achieving political goals in the international arena. The economic lifeblood of nations is facilitated by their economic relationships with other countries, and this interdependence has led to the emergence of economic sanctions as a strategic tool. Oil sanctions, in particular, can be broadly classified by subject into two general categories: trade-related and financial sanctions. Trade-related sanctions consist of two primary types: sanctions on purchases (imports) and sanctions on sales (exports and re-exports). Financial sanctions, on the other hand, include measures affecting banking transactions, insurance, and related financial activities. Furthermore, economic sanctions can be categorized based on the level of cooperation among the sanctioning countries into three groups: comprehensive, multilateral, and unilateral sanctions.

Methodology

The research method employed in this article is thematic analysis. Thematic analysis is a method used to identify, analyze, and determine patterns within qualitative data. It is a common, flexible, and easily learnable approach with a fundamental and systematic process that can be applied across most qualitative research methods. One of its key features is its suitability for highlighting similarities and differences within data sets. The data used in this study include U.S. congressional legislation and presidential executive orders up to May 2024 that relate to oil and oil-related sanctions. These documents were identified and separated from other sources using English keywords related to oil, such as “Oil,” “Petroleum,” and “Energy.” The required documents were extracted from the website of the U.S. Office of Foreign Assets Control (OFAC). MAXQDA software was used in this study for coding, data analysis, and the extraction of the conceptual model.

Results & Discussion

In the realm of primary sanctions, although U.S. oil sanctions against Iran and Russia are similar and identical across four areas— 1-the export of goods, services, and technology to the oil sector; 2- the importation of oil and petroleum products; 3- investment; and 4- financing—the scope and severity of asset freezes against oil companies are considerably greater for Iran than for Russia. While all Iranian oil companies—especially state-owned enterprises such as the National Iranian Oil Company (NIOC), NICO, and those involved in shipping, refining, and distribution—are subject to asset freeze sanctions, major Russian oil companies are not even included in such measures. The disparity between the two countries is even more pronounced in the domain of secondary sanctions. The sale of goods, equipment, and technology to the oil sectors of both Iran and Russia is uniformly subject to U.S. secondary sanctions. Moreover, transactions with Iranian and Russian oil companies listed on the blacklist or the Specially Designated Nationals (SDN) list also fall under these secondary measures. However, in other sanction categories, there is a significant difference between Iran and Russia. Unlike Iran, where the entire energy sector is targeted by secondary sanctions, Russia’s energy sector is not subject to such measures. U.S. secondary sanctions collectively target transactions by foreign third-party companies and banks in the areas of exploration, production, and extraction of oil in both countries. Furthermore, Iran’s secondary sanctions are not confined to these three areas; they also encompass downstream industries and the refining sector.

Conclusions & Suggestions

Despite the considerable similarity between the oil sanctions imposed on both countries, the severity and scope of the sanctions against Iran are greater than those against Russia. This difference arises from divergent targeting goals. The goal of Iran's oil sanctions is to eliminate and nullify its revenue generation, whereas in the case of Russia, the goal is to reduce its oil production capacity and diminish its income. This disparity in sanctions can influence the manner in which the two countries cooperate to circumvent them. For instance, instead of engaging in counterproductive competition by offering discounts to undisclosed oil buyers, Iran and Russia could collaborate, given that Russian oil sanctions and shipping measures are less severe, and Iranian oil could be exported by Russia. Conversely, due to the distinct sanctions imposed by the European Union on Russian gas imports, Russian gas could be sold through Iran, which would serve as a regional hub in the Persian Gulf countries. Clearly, achieving this objective requires establishing an appropriate framework to guide and facilitate bilateral cooperation in countering the sanctions.
Ethical Considerations
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Funding
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Conflict of interest
The authors declare no conflict of interest