On Thursday, August 28, the three European powers triggered the “snapback” mechanism (the reinstatement of broad UN sanctions), setting in motion the process of restoring previous international sanctions.
On August 27, an analytical report from the International Affairs Department of Iran’s Chamber of Commerce was published in the media and on social networks, outlining three scenarios for the country’s economy if snapback sanctions are implemented.
The “unconfirmed” three scenarios of the Chamber of Commerce
The report, drawing on the experience of past sanctions and multilateral pressures, examined the outlook for indicators such as the exchange rate, inflation, economic growth, and unemployment.
Iran’s Deepening Crisis: Expanding Bureaucracy, Shrinking Livelihoods
According to the report, in the “optimistic scenario,” Iran’s economy, even with the return of sanctions, could at best achieve a positive growth of 1.5%. In this case, the dollar (currently about 1,060,000 rials) would rise to about 1,150,000 rials, inflation would reach 60%, unemployment would hit 10.5%, and the stock market value would grow relatively to about $120 billion.
According to the “likely scenario,” the most probable outcome would be stagflation. The dollar would rise to 1,350,000 rials, inflation would peak at 75%, economic growth would fall to -1%, unemployment would reach 12%, and the stock market value would shrink to $90 billion.
The report also outlined a “pessimistic scenario,” describing the bleakest outlook as a surge in the dollar to 1,650,000 rials, inflation above 90%, and unemployment at 14%. Economic growth would drop by 3%, deepening the recession, while the stock market would collapse to $65 billion. The report attributed this outlook to a combination of dwindling foreign currency reserves, restrictions on oil sales, heightened inflationary expectations, and geopolitical risks.
The “unconfirmed” Chamber of Commerce report was published at a time when the foreign exchange market was going through turbulent days, with the dollar already surpassing the 1,060,000 rial mark.
Tasnim’s narrative of the “psychological effect” of snapback
In contrast, Tasnim News Agency, affiliated with the Islamic Revolutionary Guard Corps (IRGC), dismissed the unconfirmed Chamber of Commerce analysis as “fueling tension,” claiming that the “psychological effects” of snapback outweigh its actual impact.
Tasnim also considered comparing today’s situation with the early 2010s as inaccurate, arguing that Iran’s economy has already endured some of the effects of sanctions and developed alternative mechanisms for oil sales and foreign trade.
Tasnim further claimed that oil exports are no longer reliant on European intermediaries, saying Iran has created new routes and, despite U.S. rewards for identifying buyers of Iranian oil, has managed to stabilize sales at 1.8 million barrels per day.
The implementation of snapback will, at least diplomatically, bring further isolation for the Iranian regime. The official return of UN sanctions could strengthen the global legitimacy of measures against the regime and give Western countries even more leverage for coordinated pressure.
From an economic perspective, even if much of the UN Security Council sanctions had already taken their toll, the psychological and political impact of their return could further strain foreign investment, financial transactions, and the business environment.
Given that Iran’s economy is already grappling with crippling inflation, chronic budget deficits, and currency fluctuations, any new shock could intensify this fragility.
What is certain, however, is that Iran’s economy—whether under an optimistic or pessimistic scenario—is on a difficult path.
Consequences of “snapback” for Iran’s economy
Snapback is a mechanism envisioned in the 2015 nuclear deal with the Iranian regime, allowing any member of the agreement (JCPOA) to reimpose all suspended UN sanctions against Iran in the event of a “serious breach,” without the possibility of a Security Council veto, within a maximum deadline of 30 days.
Once snapback is activated, all previous UN Security Council sanctions—including the ban on buying and selling conventional weapons, missile-related sanctions, and the blacklist of individuals and entities—become legally binding again, with all countries obligated to comply.
The return of UN sanctions is not necessarily an authorization for military action against Iran, but it does deepen the regime’s political isolation and strengthens broader coalitions. At the same time, Tehran has threatened to limit cooperation with the International Atomic Energy Agency (IAEA) or even put harsher options on the table in response—moves that could further narrow the negotiating space and increase the risk of war.
With snapback activated, not only will legal risks accelerate, transaction costs rise, and financial-trade channels tighten, but political divisions will also deepen, making any return to dialogue more costly.
