Why is Iran pushing itself into a dead end? A geopolitical chess game gone wrong

Looking at Iran’s recent situation, many people can’t help but shake their heads in frustration. A country once holding a very strong “oil card,” with stable trading partners, has only in a few years pushed itself into a comprehensive crisis: economic collapse, currency devaluation, declining living standards, and widespread protests. On the surface, blame can be placed on sanctions, but upon closer inspection, this is the result of a series of systemic wrong decisions. 👉 The following is an overall picture, breaking down each layer to see why Iran has reached this point.

1. Overambition: Wanting to “Escape China” but Self-Destructing For many years, China has been Iran’s largest oil customer, almost a “lifeline” for Iran. About 90% of Iran’s oil exports are sold to China, mostly paid in yuan and euros, helping Iran avoid the US-controlled financial system. This should have been a stable survival path. But Iran believed that selling to China was “not profitable enough,” wanting to raise prices and reduce dependence on a single buyer. The idea sounds reasonable, but in reality, it was extremely naive. India promised to buy oil, but it was only words at the negotiation table, with no actual contracts. Other countries feared US sanctions and dared not touch Iranian oil. The result: offshore oil stocks, unsold; export volumes plummeted, foreign exchange earnings dried up. The lesson here is very clear: when you are under siege, having a large customer willing to buy is already a stroke of luck. Wanting to rely on them to survive while also trying to “play tricks” to raise prices ultimately causes both sides to turn away.
2. Internal Crisis: Currency Collapse, Hyperinflation, and Citizens with Nothing to Lose If oil exports are the main bloodline of the government, then the domestic currency is the measure of people’s trust. And in this regard, Iran has failed badly. The rial has depreciated over 90% in a decade. On the black market, 1 USD can be exchanged for hundreds of thousands of rials. People’s savings have vanished in just a few years. Food, housing, and energy prices have skyrocketed, far exceeding incomes. By the end of the year, many small traders in Tehran shut down their shops and took to the streets in protests. The most frightening thing for the government is not protests over “bread and butter,” but when slogans shift from “we need to survive” to “we need freedom.” What about the government’s response? Changing personnel, having the central bank governor resign, then bringing back a familiar face—who was previously dismissed for failed monetary policies. This is not reform, but merely changing seats for the same way of thinking.
3. Sanctions as the Trigger, Rooted in Self-Destruction The role of US sanctions cannot be denied: restricting oil exports, removing Iran from the international payment system. But if sanctions alone were the problem and internal systems were healthy, many countries could withstand and adapt. Iran cannot because of deeper issues: Distorted economic structure: the state budget depends about 80% on oil. Manufacturing and agriculture are weak, unable to support the economy when oil faces trouble. Interest groups and corruption: the Revolutionary Guards control many lucrative sectors like oil, telecommunications, and construction. Profits flow into the pockets of a small group, not back into society. Wrong priorities: while citizens struggle to make a living, the government spends heavily on geopolitical games and external forces. Sanctions are like a heavy rain. Those with sturdy roofs get only their shoes wet, while those with leaks inside their homes face collapse.
4. Can China Still Come to the Rescue? Currently, China’s ability to continue “backing” Iran is very limited. High political risks: deep internal divisions within Iran, prolonged instability making long-term investments risky. No shortage of alternative supplies: Russia sells cheap oil, and the Middle East, with Saudi Arabia and Iraq, offers more stable supply sources. Diminished trust in cooperation: long-term agreements once heavily promoted now lack enforcement, eroding partner confidence. China’s foreign strategy always prioritizes “stability.” An unstable partner with unpredictable policies makes long-term betting very difficult. Conclusion Iran’s crisis is not a catastrophe falling from the sky but the result of overambition, poor governance, and short-term vision. When the economy is suffocated, the currency devalues, and people’s trust runs out, sanctions are just the last drop overflowing the glass. Iran faces two paths: Either genuine reform, accepting “pain once” to restructure the economy and politics. Or continued patchwork, blaming external factors, and waiting for bigger upheavals. In geopolitics and investment, one wrong move can be corrected, but repeated mistakes will come at a very high cost.