Future economic scenarios of Iran and Russia under sanctions and oil price shocks


The two main current economic problems in Russia and Iran are Western sanctions and oil price spikes. On the one hand, the West introduced economic sanctions against these two countries, which affected the national economy of these two countries. On the other hand, since Iran and Russia are heavily dependent on revenues from oil exports, any sharp changes in world oil prices significantly affect the budgets of these two countries. Despite the implementation of the various strategies of the two countries against sanctions and the collision with oil price shocks, their economies are sensitive to these two hyper problems. The main goal of this work is to study probable scenarios for the future economies of Iran and Russia under the conditions of Western sanctions and oil price fluctuations. Our article shows that for the future economies of Iran and Russia there are four economic scenarios in the form of transformation of the economic structure, rapid economic growth, economic stagnation and economic crisis. In the first scenario, there is an increase in sanctions by the West and its allies against the economies of Iran and Russia, and on the other hand, the price of oil is increasing. This scenario is the most possible future for the economies of Russia and Iran. The second possible scenario for the future economies of Russia and Iran is the rapid economic development and economic growth that will arise as a result of a decrease in political tension with the West, which ended with the lifting of economic sanctions and rising world oil prices. The third option that can be foreseen for the future economies of Russia and Iran is economic stagnation, which will occur if the sanctions of the West and its allies are reduced and world oil prices are reduced again. The fourth possible scenario for the economies of Iran and Russia is an economic crisis. Such a scenario appears when the conflict with the West increases and global oil prices fall, resulting in a large-scale decline and as a result of the economic crisis for the future economies of Iran and Russia. By the way, these two economies must adapt to such unpredictable economic events. They can accelerate import substitution, multilateralism in the Eurasian region, and so on.

About the authors

Ehsan Rasoulinezhad

University of Tehran

Author for correspondence.
Email: e.rasoulinezhad@ut.ac.ir

Assistant Professor, Department of Russian Studies, Faculty of World Studies

213 Enghelab Sq., Tehran, 16517282, Islamic Republic of Iran

Parisa Sabri

University of Tehran

Email: parisasabri6@gmail.com

Department of Russian Studies, Faculty of World Studies

213 Enghelab Sq., Tehran, 16517282, Islamic Republic of Iran


  1. Alnasrawi A. (2002). Iraq’s Burdens: Oil, Sanctions, and Underdevelopment (pp. 23–45). London: Greenwood press.
  2. Bagheri S., Akbarpour H.R. (2016). Reinvestigation of the West’s sanctions against Russia in the crisis of Ukraine and Russia’s reaction. Procedia Economics and Finance, (36), 89–95.
  3. Carter B.E. (1988). International Economic Sanction: Improving the haphazard U.S. Legal Regime. Cambridge: Cambridge University Press.
  4. Dudlak T. (2018). After the sanctions: Policy challenges in transition to a new political economy of the Iranian oil and gas sectors. Energy Policy, (121), 464–475.
  5. Emami K., Adibpoor M. (2009). Asymmetric Effects of Oil Prices Shocks on Production. Quarterly Journal of Economics Modelling, 3(4), 1–26.
  6. Farzanegan M.R., Markwardt G. (2009). The effects of oil price shocks on the Iranian economy. Energy Economics, 31(1), 134–151.
  7. Gharehgozli O. (2017). An estimation of the economic cost of recent sanctions on Iran using the synthetic control method. Economics Letters, 157, 141–144.
  8. Hufbauer G., Schott J., Elliott K. (1990). Economic Sanctions Reconsideration today and Current Policy. Washington, D.C.: Institute for International Economics.
  9. Ilina E.V. (2015). Vlijanie sankcij na jekonomiku Rossii [Effect of Sanctions on Russian Economy]. The Review of Economy, the Law and Sociology, (4), 34–35
  10. Kang W., Perez de Gracia F., Ratti R.A. (2017). Oil price shocks, policy uncertainly, and stock returns of oil and gas corporations. Journal of International Money and Finance, (70), 344–359.
  11. Kapustkin V.I., Margania O.L. (2008). Mirovoj rynok nefti i mezhdunarodnaja neftjanaja pro- myshlennost' [Global market of oil and international oil industry]. In N.A. Dobronra- vin, O.L. Marganiya (eds.), Oil, gas and society modernization (pp. 53–100). Saint Petersburg.
  12. Karaganov S. (2018). The new cold war and the emerging greater Eurasia. Journal of Eurasian Studies, 9(2). Pp. 85–93.
  13. Kazankova E.R., Sudo M.M. (1998). Jenergeticheskie resursy. Neft' i prirodnyj gaz [Energy resourses. Oil and natural gas]. State of Russia in the Surrounding World, 1–10.
  14. Malloy M.P. (1990). Economic Sanctions and U.S. Trade. Boston: Little, Brown and Company.
  15. Nasre Esfahani M., Rasoulnezhad E. (2017). Iran’s trade policy of Asianization and de-Euro- peanization under sanctions. Journal of Economic Studies, 44(4), 552–567.
  16. Raoofi H.R., Dejpasand F., Ansari M. (2009). Iranian Economy during Imposed War (p. 154). Tehran: Enghelab Islamic Press.
  17. Rasoulinezhad E. (2015). Vlijanie mirovoj ceny na neft' na jekonomiku stran – jeksporterov nefti [Influence of world oil price on economies of oil-exporter countries]. Discussion, 6(58), 53–57
  18. Rasoulinezhad E. (2017). Iran's Trade Modification Under Sanctions: An Evidence of Trade Divergence and Trade Convergence Through the Gravity Model. Journal of Economic Cooperation and Development, 38(4), 25–56.
  19. Rasoulinezhad E., Buzari B. (2018). Tozhdestvennost' i razlichija antisankcionnyh jekonomik v Irane i Rossii [Similarities and Differences of Anti-Sanctions Economies in Iran and Russia]. Samara State University Journal, 9(4), 33–37.
  20. Salitskii A.L., Zhao X., Yurtaev V.I. (2017). Sanctions and import substitution as exemplified by the experience of Iran and China. Herald of the Russian Academy of Sciences, 87(2), 205–212.
  21. Samofalova O. (2013, 21 May). Otdelivshiesja v pljuse [Separated in positive territory]. Vzgliad. http://vz.ru/economy/2013/5/21/633610.html (accessed: 14.12.2018).
  22. Shibanova-Roenko E.A., Guznova A. (2012). Vlijanie jenergeticheskogo krizisa 1973 goda na jekonomiku RF [The impact of the energy crisis of 1973 on the Russian economy]. Student conference “Scientific Forum – 2012” (pp. 102–103). Moscow.
  23. Slavnika M.V. (2002). Razvitie neftegazovogo kompleksa SSSR v 1960–1980-e gg.: Bol'shie pobedy i upushhennye vozmozhnosti [The development of the oil and gas complex of the USSR in the 1960–1980s: Big victories and missed opportunities]. IX Mezhdunarodnaya konferentsiya “Lomonosov-2002” (pp. 83–86). Moscow: Lomonosov Moscow State University.
  24. Pai P. (2015, 20 July). Six countries that have faced severe economic sanctions. Tharawat Mazagine. https://www.tharawat-magazine.com/facts/6-countries-economic-sanctions/ #gs.21p27x (accessed: 18.03.2019)
  25. Yoshiko M. Herrera. (2010). Mirrors of the Economy: National accounts and International Norms in Russia and beyond (pp. 137–172). USA: Cornell University Press.
  26. Zahraei M. (1998). Economic sanctions from view to action. Foreign Policy, 11(1), 63–81. (In Persian.)

Copyright (c) 2019 Rasoulinezhad E., Sabri P.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

This website uses cookies

You consent to our cookies if you continue to use our website.

About Cookies