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Iranian President Masoud Pezeshkian speaks during an interview in Tehran, Iran, August 28, 2025. (photo credit: IRAN
Snapback sanctions could collapse the Iranian economy as the Islamic Republic scrambles to rebuild its nuclear facilities
The European “E3” (United Kingdom, France, and Germany) initiated a 30-day countdown clock when they triggered the United Nations (UN) snapback on August 28—a step that would automatically reimpose the full suite of Security Council sanctions unless a last-minute accommodation is reached by September 27–28. From the UN rostrum this week, President Masoud Pezeshkian said, “Iran has never sought and will never seek to build a nuclear bomb.”
European leaders said only verifiable steps—restoring inspector access and addressing enrichment and monitoring gaps—can avert reimposition.
If the clock runs out, arms and missile restrictions and nuclear-related bans would return, complicating trade and diplomacy amid inflation and fiscal strain in Iran. UK and UN process briefs outline the August 28 notification and the 30-day window under the dispute-resolution process linked to the nuclear deal. Absent Security Council action that satisfies all veto holders, the pre-deal measures come back into force, and partners are expected to reapply the suspended sanctions.
International Atomic Energy Agency (IAEA) figures made public in September show Iran held approximately 440.9 kilograms of 60%-enriched uranium as of June 13, keeping pressure high for restored monitoring and transparency.
While 60% is below weapons-grade, it materially shortens timelines and heightens concerns about access for inspectors. Separately, open-source imagery indicates Tehran is rebuilding missile-production sites damaged in June’s 12-day Iran–Israel war, though analysts note a bottleneck: the apparent absence of large planetary mixers needed for solid-fuel production—equipment whose absence could slow a full return of capacity even as other lines recover.
Mohammad Eslami, head of the Atomic Energy Organization of Iran (AEOI), speaks at the opening of the International Atomic Energy Agency (IAEA) General Conference at the agency’s headquarters in Vienna, Austria, September 15, 2025. (credit: REUTERS/LISA LEUTNER)
On September 24, a Houthi drone struck Eilat, injuring about 20 people; Israel hit targets in Sanaa in response. The exchange shows how Gaza-linked tensions stretch from the Red Sea to the Eastern Mediterranean and how peripheral fronts can spike precisely as the snapback clock runs down.
Mohammad Alzghool, senior researcher and head of the Iranian Studies Unit at the Emirates Policy Center in Abu Dhabi, said, “The most likely scenario is that the European parties will move ahead with the snapback mechanism.” He argued that such a move would mean “the collapse of the nuclear deal as the overarching framework” and could “open the political landscape to escalation scenarios.”
He added a warning on the economy, stating, “The impact goes far beyond psychology—it risks pushing the economy toward collapse.” Alzghool said plausible cases include oil exports falling to about 700,000 barrels per day, worsening the fiscal deficit and weighing on growth, even if Tehran keeps some crude moving via discounting or gray-market channels.
Looking to diplomacy, Alzghool said, “The nuclear issue is no longer forcing the international community into immediate talks with Tehran.” He also predicted, “Rather than negotiating on the basis of an established framework, the international community may push Iran into comprehensive talks from scratch, without legal reference points.”
In his view, the dynamics since June reduced Iran’s leverage and increased the likelihood that any future process would demand deeper transparency on stockpiles and missiles.
From the UN General Assembly this week, Pezeshkian tied Iran’s posture to Gaza while reiterating that Tehran does not seek nuclear weapons. European capitals countered that verifiable steps—restored inspector access, clarity on stockpiles, and credible de-escalation—are the only way to halt snapback in the closing hours of the 30-day window.
Daniele Garofalo, an expert on terrorism and armed Islamist insurgent groups in the Middle East, said European debates often miscast the Houthis, noting, “They are not Yemen and not the internationally recognized government.” He added that the movement has leveraged the Palestinian cause to frame itself as a national defender while continuing to benefit from Iranian support, even as some of Tehran’s other partners have lost capacity. “It’s absurd that in 2025 I still have to explain that Yemen—the Yemeni government and the Yemeni army—is someone else,” he said.
On staying power, Garofalo pointed to a durable force structure—military, political, organizational, and governmental—that leaves the group, “In short, … not an actor that can be easily removed right now.” He said popular support in Shiite areas persists, and he described how identity politics and wartime mobilization sustain the movement even when battlefield costs rise.
Iranian financing network
Garofalo also described work-arounds that offset reduced direct Iranian financing, saying, “Even if direct Iranian financing has been interrupted—because of obvious difficulties—the Houthis have found alternative ways over the past year to sustain their military logistics.” He cited intelligence reporting of “collaboration with al-Shabab, al-Qaida in the Arabian Peninsula (AQAP), and Somali piracy” in exchanges that sustain logistics, despite public denials. “AQAP denies this, but it is evident the two groups have avoided attacking each other for several years,” he said, adding, “They steer clear of clashes also because, as a reminder, al-Qaida’s leader Saif al-Adel is still in Iran.”
On proposed partition scenarios, he cautioned that plans often ignore the Southern Transitional Council (STC), United Arab Emirates patronage, and AQAP’s persistence, saying, “Removing them would require substantial military commitment, which no one appears willing to make right now.” He warned that installing a northern authority could “install an enemy government closely aligned with Iran” and “solve one problem and create another.” “Second, are we sure the STC, funded as we know by the Emirates, would accept this?” he asked, noting that over the past year and a half, the STC cooperated with the internationally recognized government against al-Qaida and the Houthis while repeatedly voicing political, military, and economic discomfort under that arrangement.
If snapback proceeds, Alzghool outlined diverging paths. He said, “Turning east toward China and Russia appears increasingly attractive for Iran,” including interest in Eastern weapons systems, and hard-liners could push to accelerate a pursuit of nuclear weapons—a course some argue would restore deterrence with even a small arsenal.
He also offered a contrasting path: “On the other hand, Iran could still pivot toward regional and international integration,” which would require scaling back sensitive nuclear activities, reducing militia networks, and tapping the growing influence of moderates in government and in the Supreme National Security Council.
Over the next news cycle, the UN track will determine whether sanctions snap back and pressure intensifies—or whether a narrow diplomatic lane remains. Either way, Tehran’s near-term calculus rests on three facts: a sizable 60%-enriched uranium stockpile with inspector-access demands, a missile program rebuilding under constraints, and continued Houthi operations that keep the region on edge.
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