US sanctions are hurting Iran, but economic collapse alone may not topple regime, expert says

US sanctions are increasingly damaging Iran’s ability to obtain hard currency and function economically, Professor Uzi Rabi told 103FM radio on Thursday, while warning against drawing a quick conclusion that an economic collapse would inevitably lead to the fall of the regime.

“The economic path is not certain,” he said.

Rabi, head of the Moshe Dayan Center for Middle Eastern and African Studies at Tel Aviv University, spoke with Barak Seri and Eli Ohana on 103FM radio about the economic war the US has declared against Iran and analyzed its potential impact.

US blockade on Iran raises questions over whether it will achieve its intended goals

“This blockade is theoretically the best thing to do. If the US is determined, if the US is consistent, it should work,” Rabi said.

“There is a question here with China, Turkey, Pakistan. How long will the US continue? [Regarding] the 'D-Day method,' I think that for the first time the US understands that this is not about attacking Iran’s economy, but rather going to the outer layer. Let’s see how much they will listen and how much they will restrict Iran. There is one thing that is undisputed. Iran has been forced in recent weeks to manage with fewer and fewer dollars. When it lacks hard currency, it cannot even operate its agriculture and industry.

“From the day Iran was established as an Islamic republic, it has not managed a normal economy; it has managed a resistance economy,” he added. “But there are sanctions, and there are sanctions. I think these sanctions are much more persuasive, but still, being within our own society, who knows what will happen tomorrow if suddenly the Omanis and Iranians come with an agreement, the Pakistanis tell [US President Donald] Trump that there is something to discuss, and he starts loosening things here and there.”

Rabi said that while the economic campaign is a strategic tool, it does not guarantee the regime's collapse.

“The Strait of Hormuz is not what it used to be. At the beginning of the war, we saw the great damage caused to Hormuz. Many players understood that if they do not develop alternative routes, they are truly heading toward disaster. We are seeing Saudi Arabia exporting its oil through the Red Sea.”

“The Americans are extracting oil where the Iranian radar does not stop, ultimately penetrating or breaking through because of the blows it has taken,” Rabi said. “Iran is a battered country. But I do not want this interview to create the logic that if the economy collapses, then the regime falls. Iran has another economy, the regime’s economy. In supermarkets, people are suffering deeply in ways they never knew before, even when their situation is difficult. The question is what will happen with smuggling and cryptocurrency. The US is going to choke all the pipelines, the economic route to Iran. Let’s give this its due.”

'The threat here is not only against Israel but against the entire free world'

Rabi also warned against relying on a diplomatic agreement with Tehran.

“An agreement with Iran is a blessing in disguise, giving them time to gain,” he said.

“If we had a real world that truly wanted to defend itself and understood what kind of regime exists there, they would have acted differently from the beginning,” Rabi said. “They would have understood that the threat here is not only against Israel but against the entire free world.

"If you remove this regime, it would be a great blessing, but it would not be easy. The economic path also does not provide a 100% guarantee; rather, it suggests that this regime will ultimately lose its vitality and power and that, given the circumstances, we may face a different reality that helps bring about the regime’s downfall. This must be taken carefully.”