Sanctions, War, and Succession: The Triple Crisis Facing Iran’s New Leaders

Any incoming leadership in Tehran would face a daunting challenge even if they inherited a country at peace. Instead, Iran’s next Supreme Leader and the political establishment surrounding the transition face three simultaneous and interconnected crises: an active armed conflict with the United States and Israel, the most severe economic conditions in decades, and a leadership vacuum at the top of a system that was designed to function with a single powerful figure at its center.
The economic situation requires context to fully appreciate. Iran has been living under significant US sanctions for decades, with brief periods of partial relief during the Obama administration’s nuclear deal period. The sanctions have devastated the country’s oil export revenues, restricted access to the international banking system, and prevented foreign investment. The result is a chronically underperforming economy with high inflation, high unemployment, and a currency that has lost enormous value.
The war has made the economic situation worse. Military expenditures have increased. Trade routes have been disrupted. Foreign exchange earnings have been further constrained. The population, already struggling with the consequences of decades of sanctions, now faces the additional burdens of active conflict including physical infrastructure damage and the displacement of people from conflict-affected areas.
Against this backdrop, the succession process is attempting to function. The Assembly of Experts must identify a candidate who commands sufficient religious authority, political credibility, and security establishment support to govern a country in crisis. The pool of available candidates with all of these qualities simultaneously is not large.
The interaction between these three crises creates compounding risks. Economic desperation can fuel political unrest. Political unrest during wartime invites harsh security responses. Harsh security responses erode legitimacy. Eroded legitimacy weakens the new leader’s ability to make the hard decisions required to address the economic crisis. Breaking this cycle may be the central governance challenge facing whoever assumes power.