Senior visiting fellow, George Mason University
Washington’s new sanctions are unlikely to stop a China–Iran freight train at the border, but may make the route Tehran has turned to under pressure from the US naval blockade costlier and less reliable.
The blockade has sharply restricted maritime trade, while years of sanctions have squeezed Iran’s access to international finance. But not every trade channel had already closed.
Trains carrying goods from China were still reaching Iran before the latest US measures. The question now is whether sanctions on Iran’s railway companies will narrow that remaining route and complicate the flow of goods, including auto parts, carried on it.
Last week, the US Treasury designated three Iranian rail companies: the state-owned Islamic Republic of Iran Railway Company, known as RAI; Raja Passenger Trains Company; and private freight operator Railway Transportation Company.
The department said Iran had turned to rail to sustain trade and transport oil as the maritime blockade took hold.
The sanctions block the US-based property of the designated companies and prohibit US persons from dealing with them, while separate sectoral determinations give Washington wider scope to impose future designations. They do not automatically block every foreign railway, freight company or shipment connected to Iran.
The more immediate effect may be caution among companies involved in the trade. Banks may reject payments. Insurers and equipment suppliers may refuse to handle business involving designated companies. Others may charge higher fees or take longer to process shipments.
None of this would close the railway, but together it could make the route less dependable.
A useful route, with clear limits
The China–Iran rail connection is no longer just a proposal. In September, a block train bound for Iran was reported traveling through Kazakhstan, Uzbekistan and Turkmenistan before entering at Sarakhs.
A train from Xi’an to Iran’s Aprin dry port in 2025 was reported to have taken about 15 days, compared with an estimated 30 to 40 days by sea. Iranian railway officials also reported that 43 freight trains arrived from China in the first nine months of 2025.
Those figures show a route in use, although they do not indicate how much of Iran’s overall trade moves by rail.
Rail can move selected goods, industrial inputs, equipment and containerized cargo faster than shipping by sea. But it cannot replace the volume carried by tankers or bulk freighters.
Treasury says Iran is using rail to help transport oil, but its announcement provides no figures for oil moved this way. There is therefore little evidence that rail is a meaningful substitute for seaborne oil exports.
The new designations could nevertheless complicate the China route. Freight must be coordinated among operators, border agencies and terminals in several countries, making the response of Chinese and Central Asian companies important to how disruptive the sanctions ultimately prove.
Auto parts show where the sanctions overlap
The automotive sanctions create a second pressure point because auto parts from China have traveled to Iran by rail.
In 2025, Iran Khodro reportedly received an all-rail shipment through Sarakhs. The head of the local special economic zone said the route reduced transit and stockpiling time from about 50 days to 15.
Sanctions on automakers and rail operators could therefore put pressure on the same supply chain from two directions.
Procurement and payment may become harder, while freight companies and intermediaries may avoid shipments linked to designated firms.
The impact on car production, however, will depend on what parts are affected, how much stock manufacturers have and whether other suppliers or routes are available.
The trains may run, but at a price
The blockade has squeezed Iran’s maritime options; the rail sanctions raise the risks attached to an overland alternative.
They may not stop the China–Iran connection, but could make it costlier and less predictable by deterring the banks, insurers and logistics firms that keep shipments moving.
How much traffic falls will depend largely on the response of Chinese and Central Asian operators.
For now, the railway remains open. But as Iran leans more heavily on the trade routes still available to it, Washington is trying to make those routes harder to use.
Footage and images showing men wielding machetes and swords at an IRGC-backed rally in the central Iranian city of Isfahan have renewed scrutiny of the Islamic Republic's history of using unofficial armed groups to suppress anti-government protests.
The October 1 event, dubbed "Jan-Fadayan," or "Those Willing to Sacrifice Their Lives," brought together members of the Basij paramilitary force, religious organizations and other participants, according to Iranian state media.
Organizers described the gathering as a demonstration of public readiness and mobilization capabilities.
Iranian lawyer Ali Mojtahedzadeh described the public display of bladed weapons as a "show of force with weapons" and called on local security authorities to explain why it had been permitted.
A review of statements by senior Islamic Revolutionary Guard Corps (IRGC) commanders and former security officials shows that the use of unofficial groups, including individuals described as criminals and street thugs, to confront protesters dates back decades.
From the 1999 student protests to the 2009 crackdown
One of the earliest documented accounts dates to July 1999, when security forces and allied groups attacked Tehran University student dormitories, triggering widespread demonstrations.
Ali Hashemi, a former deputy security minister at Iran's Intelligence Ministry, said in an audio recording published by Iran International that approximately 250 individuals described as "thugs and hooligans" were organized during the student protests.
Hashemi said the experience later served as a model for deploying similar groups during the mass demonstrations that followed Iran's disputed 2009 presidential election.
He also described the use of individuals with criminal records to beat detainees, including at the notorious Kahrizak detention center, referring to authorization from judicial authorities.
Hashemi said similar individuals were subsequently deployed during protests in 2017, 2018 and November 2019.
One of the most explicit accounts came from Hossein Hamedani, a senior IRGC commander responsible for security operations in Tehran during the 2009 unrest.
Hamedani said the Revolutionary Guards identified approximately 5,000 people who had participated in disturbances but were not affiliated with political parties or movements. He described them as "criminals and thugs."
According to Hamedani, these individuals were initially prevented from leaving their homes on days when protests were planned, but some were later recruited and organized into three battalions.
"I then made them members of the battalions," he said.
Explaining the strategy, Hamedani said that training fighters required recruiting individuals accustomed to handling "blades and machetes."
Hamedani also described preparations to confront protesters during Ashura, a major Shiite religious observance, in December 2009.
He said cinemas, schools and religious halls were made available to pro-government forces, while approximately 30 religious groups were mobilized in Tehran.
"On Ashura, these same three battalions put an end to the unrest," Hamedani said, adding that approximately 45,000 Basij members had also been deployed.
Following Hamedani's death in Syria in 2015, Mohammad Ali Jafari, then commander-in-chief of the IRGC, credited him with helping suppress the 2009 protests, saying his leadership had been crucial to ending what Iranian authorities described as "sedition."
Hamedani had also played a central role in organizing local militias supporting Syrian President Bashar al-Assad during the country's civil war.
Jafari later said Hamedani had organized approximately 100,000 local fighters in Syria.
Allegations of machete-wielding clerics in 2022 protests
Similar allegations emerged following the nationwide protests triggered by the death of Mahsa Jina Amini in morality police custody in September 2022.
In 2024, former lawmaker Mohammad Ashrafi Esfahani accused a group of clerics associated with influential religious figure Alireza Panahian of attacking protesters with knives and machetes while dressed as civilians.
He alleged that the men returned from the streets wearing bloodstained clothes before changing into clerical robes.
Ashrafi Esfahani also said members of the group operated in plainclothes and changed into clerical attire, including turbans, when police officers appeared to avoid being confronted.
The allegations emerged amid a legal and financial dispute between Ashrafi Esfahani and Panahian over a religious complex in Tehran and have not been independently verified.
Renewed scrutiny of unofficial armed groups
Nearly three decades after the 1999 student protests, the images from Isfahan have again raised questions about the role of unofficial groups operating alongside Iran's formal security forces.
Although the names, structures and political circumstances of the groups involved in past crackdowns have varied, accounts by former security officials and IRGC commanders describe the repeated recruitment and deployment of individuals capable of using violence against demonstrators.
The available evidence does not establish that the groups involved in different periods belonged to a single organization or were directly connected.
Nor has any organizational link been established between those previously deployed against protesters and the men seen carrying machetes and swords at the Isfahan rally.
The identities and affiliations of the armed men have not been independently verified.
Their appearance at an IRGC-backed event has nevertheless renewed attention to the Islamic Republic's documented history of mobilizing forces outside conventional security structures during periods of political unrest.
The US blockade and tighter sanctions enforcement are cutting into Iran’s oil income and targeting financial networks that sustain the Islamic Republic, but may still fall short of forcing Tehran into concessions, experts said at an Iran International town hall in Washington.
The discussion, hosted by Fardad Farahzad, brought together Kerri Bitsoff, a former senior official at the US Treasury Department’s Office of Foreign Assets Control (OFAC); Patrick Clawson, the Morningstar senior fellow at the Washington Institute; and Mohammad Machine-Chian, a senior economist and analyst at Iran International.
“The thing about sanctions, if they’re on the books but not enforced, they only hurt the people,” Bitsoff said, arguing that the current US campaign differed from previous rounds by focusing more heavily on enforcement and the financial intermediaries sustaining Iran’s economy.
Blockade bites
Iran faces declining oil revenues alongside damage to its energy infrastructure following the war, raising the prospect of severe economic difficulties during the coming winter, Clawson said.
President Masoud Pezeshkian had acknowledged that Iran could not export oil during the initial blockade, according to Clawson, who said the country subsequently sought alternative routes for limited shipments.
Iran had also relied on oil previously stored aboard vessels and in China, but those reserves were approaching exhaustion, he said.
Damage to natural gas infrastructure could compound the difficulties, potentially forcing greater reliance on mazut, a heavily polluting fuel used for electricity generation.
Iran depends on natural gas for approximately 69 percent of its energy requirements, making disruptions particularly consequential for households and industry, Clawson said.
Machine-Chian estimated that between $21 and $23 billion in export proceeds had not returned to Iran and that the blockade could cost the country another $35 billion in oil revenue.
Hitting financial networks sustaining Iran's leadership
The current campaign differs from previous sanctions because Washington is concentrating on enforcement and the intermediaries sustaining Iran's economy rather than simply announcing additional restrictions, Bitsoff said.
She pointed to restrictions imposed by the United Arab Emirates, measures against Iranian airlines and Turkish action against banks connected to Iranian transactions.
Such measures could influence officials and business figures whose continued support for the Islamic Republic depends on financial privileges and access to international markets.
Earlier sanctions had often pushed legitimate commerce underground while allowing networks connected to the Revolutionary Guards to profit, Bitsoff said.
Machine-Chian described the emergence of wealthy intermediaries, sometimes called sanctions merchants, who benefited from moving Iranian oil and money through opaque arrangements.
Those networks subsequently became obstacles to negotiations and economic normalization because their commercial interests depended on maintaining the existing system, he said.
Machine-Chian distinguished between sanctions that impose prolonged hardship without producing results and measures designed to achieve specific objectives within a foreseeable period.
The loss of the UAE, Machine-Chian added, as a major commercial and financial intermediary has further complicated Iran's position.
Dubai previously provided an important channel for Iranian transactions, but restrictions have forced businesses to seek alternatives through Turkey, Pakistan and Afghanistan, Machine-Chian said.
Those routes, he said, have limited capacity and cannot quickly replace the financial infrastructure previously available through the Emirates.
China and regional allies face financial constraints
China remains Iran's principal oil customer, but its commercial relationship offers fewer advantages to the Islamic Republic than commonly assumed, Bitsoff said.
Independent Chinese refineries purchase Iranian crude at substantial discounts, while payments in yuan often remain in China and are largely available for purchasing Chinese goods.
Major Chinese banks generally avoid Iranian transactions, leaving smaller intermediaries to facilitate much of the remaining trade, she said.
The blockade also allows Washington to restrict Iranian oil exports without directly confronting major Chinese financial institutions, Clawson said.
Targeting those institutions could provoke Chinese retaliation affecting broader US economic interests.
The financial pressure is also affecting Iran's regional allies.
Hezbollah has struggled to maintain basic financial obligations and social support programs since the blockade began, Bitsoff said.
Machine-Chian argued that Iran's relationships with allied armed groups had become increasingly transactional, making continued financial assistance essential to sustaining their loyalty.
Political survival and prospects for negotiations
Despite the mounting pressure, the panelists differed over whether the Islamic Republic would ultimately accept Washington's demands.
Economic hardship alone was unlikely to persuade Iran's leadership to abandon its objectives, Bitsoff said.
Instead sustained pressure could influence members of the security apparatus whose loyalty depends on salaries, privileges and expectations of continued stability.
Clawson considered negotiated concessions possible, pointing to previous occasions when Iran reversed positions it had presented as nonnegotiable.
He suggested Iran could accept a three-year suspension of uranium enrichment, particularly because its facilities had been damaged and were not operational.
Machine-Chian was more skeptical, arguing that abandoning regional ambitions and nuclear objectives would challenge central elements of the Islamic Republic's political identity.
The blockade's sustainability also remains a concern because maintaining naval operations places substantial demands on American ships, crews and maintenance resources, Bitsoff said, although she expected the operation to continue.
The discussion highlighted a central uncertainty: whether sustained economic pressure will produce concessions, weaken the leadership's support structures or prolong Iran's economic difficulties without fundamentally changing its political direction.
The cost of transporting goods from Turkish ports to Iran has surged over fivefold in less than two months to about $8,000, Iranian media reported, as Washington pressures Turkey to help cut off Iran's overland trade routes to further isolate Tehran economically.
The US naval blockade of Iranian ports has forced Tehran to rely more heavily on land borders to secure essential imports and maintain trade flows, placing increasing strain on transportation networks already struggling with congestion and limited capacity.
Fars News Agency reported Saturday that freight charges from Turkish ports to Iran had climbed from approximately $1,500 to $8,000 in less than two months, adding to the cost of importing goods into the country.
Ehsan Malekzadeh, chairman of Iran's Association of International Transport Companies, told Mehr News Agency that freight rates had reached $7,900 to $8,000, partly because prolonged border delays had created a shortage of trucks available to transport goods into Iran.
Approximately 8,000 trucks are currently stranded at the Bazargan border crossing with Turkey, while Iranian drivers at the Rimdan crossing with Pakistan face delays of 20 to 25 days, according to Fars.
The closure of the nearby Mirjaveh crossing and inadequate infrastructure at Rimdan have compounded the congestion. Each stranded truck incurs an estimated $175 in daily costs, potentially adding thousands of dollars to transportation expenses.
Malekzadeh warned that the disruption was driving up import costs while undermining Iranian exporters' competitiveness, with some export markets already lost.
He said transportation, insurance and related logistics expenses previously accounted for no more than approximately 10 percent of a shipment's value, but now substantially exceeded that benchmark.
Iranian trade officials have previously warned that overland routes cannot fully replace maritime imports.
In August, Davoud Rangi, vice chairman of the Iran Chamber of Commerce's Import Management Committee, estimated that replacing the cargo of a single ship carrying essential goods would require approximately 2,500 trucks.
He warned that land routes through Turkey and Pakistan lacked the capacity to accommodate the volume of goods previously arriving through Iran's southern ports, while transportation costs would rise sharply.
US Treasury Secretary Scott Bessent told Newsmax on Thursday that Washington was working with Turkey and Pakistan to "cut off all the land routes" into Iran, while describing the United Arab Emirates and Oman as partners in the broader economic pressure campaign.
"We did have a maximum pressure campaign. Now we have an absolute isolation campaign and it's working," Bessent said, referring to Washington's expanding efforts under Operation Economic Outcast.
For the first time in Iran’s history, revenue from crude oil and condensate exports could dry up entirely by mid-December if the US blockade remains in place, according to the head of crude oil analysis at Kpler.
“Revenues from crude and condensate will drop to zero for the first time ever,” Homayoun Falakshahi told Iran International's Eye for Iran, warning that Tehran could lose between $3 billion and $6 billion in monthly oil income.
That makes December the critical month as the last Iranian oil shipments already outside the blockade zone make their way to Chinese buyers.
According to Kpler, just eight million barrels of Iranian crude remain on the water outside the blockade, down from nearly 90 million barrels in mid-July. Falakshahi expects those remaining shipments to be discharged by around October 18.
With Chinese refiners typically taking another one to two months to settle payments, Tehran could receive its final proceeds from those shipments by mid-December.
The looming revenue shortfall follows a halt in Iranian oil shipments. Kpler data shows that Iran loaded no crude oil or condensate onto tankers throughout September, the first full month without loadings since the 1979 Islamic Revolution.
The last recorded loading took place around August 26 or 27.
Even during the 1979 revolution, the Iran-Iraq war and successive rounds of Western sanctions, Iranian crude continued reaching international buyers. During the COVID-19 pandemic, shipments fell as low as 300,000 barrels per day in some months, compared with typical volumes of around 1.7 million to 1.8 million, but never stopped entirely.
“This is a first in history,” Falakshahi said.
A financial lifeline under threat
Oil exports remain Iran’s largest source of foreign currency despite years of efforts to reduce the government’s dependence on petroleum income.
Falakshahi said much of Iran’s oil trade with China continues to be settled in dollars despite US sanctions, making the disappearance of those payments particularly consequential for an economy already struggling with currency depreciation.
He said expectations of dwindling oil income may have contributed to the rial’s recent decline. A prolonged loss of foreign exchange could put further pressure on the currency and government finances.
The squeeze could also affect Tehran’s ability to finance regional allies, although Falakshahi said the extent would depend on government priorities. Tehran could choose to preserve such support while cutting spending at home.
Sustained economic pressure could also affect Tehran’s negotiating calculus with Washington, he said, though he doubted the leadership was ready to make significant compromises over its nuclear program.
Why sanctions-evasion methods may not work
Iran has spent decades developing networks to circumvent Western sanctions and maintain oil exports, but Falakshahi said a physical blockade makes those methods far more difficult to replicate.
Unlike financial restrictions, which Tehran has historically navigated through intermediaries, disguised shipments and alternative trading arrangements, the current blockade prevents tankers from physically leaving Iranian waters.
One potential workaround has attracted attention as independent Chinese refiners increasingly turn to Iraqi crude to replace Iranian supplies: transporting Iranian oil through Iraq and disguising its origin before exporting it to China.
But moving even 50,000 to 70,000 barrels per day across the Iraqi border would require thousands of truck movements, Falakshahi said.
“You’d probably see videos of it on the internet,” he said.
He estimated that moving enough crude by truck to fill a single large tanker could take around 20 days, compared with roughly one large tanker Iran previously loaded each day.
Iraq continues to import Iranian natural gas, but payments owed to Tehran are held in a restricted account at Iraq’s central bank because of US sanctions. Falakshahi said Baghdad would be unlikely to facilitate large-scale Iranian oil shipments at the risk of further US sanctions.
Overland routes offer little relief
Rail offers limited alternatives. Falakshahi said the connection to China reaches Tehran, far from Iran’s main oil-producing regions, while the pipeline supplying the capital has capacity of only around 200,000 barrels per day.
Turkmenistan is also reportedly restricting rail transit through its territory over concerns about US sanctions.
Even if Tehran managed to move small quantities through neighboring countries, road and rail would be unlikely to replace the volumes previously exported by sea.
“Iran has a history of evading sanctions successfully to an extent,” Falakshahi said. “But this seems a lot more challenging.”
Pressure extends beyond oil
The blockade is also restricting Iran’s ability to import commodities as oil revenue approaches a potential halt.
Falakshahi said shipments of agricultural products, including corn and wheat, have declined sharply, while alternative supply routes through the Caspian Sea offer only a fraction of the capacity available through Persian Gulf ports.
For Tehran, the immediate question is whether the blockade will remain in place long enough to exhaust the final payments from oil already sold.
If it does, December could mark the first time in Iran’s modern oil-producing history that crude and condensate export revenue falls to zero, cutting off the Islamic Republic’s principal source of foreign exchange with no clear route to restoring exports while the blockade remains in place.
Iran is seeking more electricity from Turkey and Turkmenistan as war damage and other outages leave thousands of megawatts of industrial and petrochemical power capacity offline, even as Washington presses neighboring countries to help restrict Tehran’s remaining economic routes.
Mohammad Allahdad, head of Iran’s electricity company Tavanir, told ILNA that about 4,700 megawatts of generation capacity belonging to industries and petrochemical companies had gone offline for various reasons.
He said the infrastructure was now in place for petrochemical plants to receive imported electricity from Turkey through Iran’s national grid. The companies have not yet signed contracts for the supply.
“If this does not happen, supplying electricity to these industries will face challenges,” Allahdad said.
War damage drives import push
Allahdad said serious damage during the war to utilities serving petrochemical complexes had sharply increased their dependence on the national grid. Iran supplied the sector with six times as much electricity this summer as in previous years, he said.
He added that Iran currently had no plans to export electricity and was instead focused on increasing imports, particularly during the winter.
Iran is also negotiating with Turkmenistan to extend an existing electricity import agreement and increase the volume of power exchanged between the two countries, according to a government statement.
Officials have also discussed additional cross-border power lines and the possible transit of electricity through Turkmenistan to third countries, though those proposals remain subject to technical and economic studies.
US seeks to close remaining economic routes
The push for additional electricity imports comes as the United States broadens its economic campaign against Iran beyond oil exports and financial sanctions.
US Treasury Secretary Scott Bessent said this week Washington was working with Turkey and Pakistan to restrict Iran’s overland commercial routes, while describing the United Arab Emirates and Oman as partners in the broader pressure campaign.
“We did have a maximum pressure campaign. Now we have an absolute isolation campaign and it’s working,” Bessent told Newsmax.
Bessent has also said Washington is targeting Iran-linked cryptocurrency and its remaining shipping network. Treasury on Thursday sanctioned 17 vessels and their owners, saying they were part of what remained of Iran’s shadow fleet, while Bessent said the US could seize about $1 billion in Iran-linked digital assets.
The overlap puts Turkey in an unusual position, with Tehran seeking greater electricity supplies from its western neighbor while Washington says Ankara is also cooperating in efforts to constrict Iran’s remaining overland economic links.
