weighted score 6.6 · five dimensions
Geopolitical & Concentration Risk
Iran
Geopolitical conflict, supplier concentration, climate exposure, sanctions risk and policy continuity intelligence for Iran-origin supply chains.
Geopolitical conflict
8
Twelve-Day War (June 2025) — US-Israeli strikes on nuclear facilities. JCPOA terminated October 2025. Proxy network across Middle East. Strait of Hormuz control creates global energy supply chain risk.
Supplier concentration
5
Oil exports mostly to China at deep discount. Economy shrinking, 60% inflation. Not a viable sourcing origin for Western buyers. Relevant primarily for Strait of Hormuz transit risk.
Climate & physical risk
3
Severe water crisis — Lake Urmia collapse, groundwater depletion. Extreme heat in south. Active seismic zone. Environmental governance weak but physical risks are secondary to sanctions.
Sanctions exposure
9
Most sanctioned major economy. US primary and secondary sanctions comprehensive. EU snapback September 2025. UN sanctions. IRGC designated. Secondary sanctions deter any third-party engagement.
Policy continuity & property rights
8
IRGC controls 20-40% of economy. December 2025 protests suppressed. Regime stability uncertain long-term. Property rights subject to revolutionary court seizure. Foreign investment effectively impossible.
Geopolitical Exposure
Geopolitical Exposure
- Nuclear crisis
- JCPOA terminated October 2025. US-Israeli strikes on Iranian nuclear facilities in June 2025 (the Twelve-Day War) marked a major escalation. Iran's nuclear programme remains a central source of regional instability and global sanctions policy.
- Regional proxy network
- Iran operates an extensive proxy network across the Middle East — Hezbollah (Lebanon), Houthis (Yemen), PMF/Hashd al-Shaabi (Iraq), and various groups in Syria. This network creates multi-theatre conflict exposure and sanctions contagion risk.
- Strait of Hormuz
- Iran controls the northern shore of the Strait of Hormuz, through which approximately 20% of global oil passes. Iran has periodically threatened to close the strait in response to sanctions pressure, creating systemic energy supply chain risk.
- Buyer implication
- Iran is effectively untouchable for most Western supply chains. Comprehensive sanctions, secondary sanctions risk, and reputational exposure make any direct or indirect sourcing relationship extremely high risk.
Supply Chain Concentration
Supply Chain Concentration
- Oil exports
- Oil exports predominantly to China at $7-8/barrel discount to market. Shadow fleet and ship-to-ship transfers used to evade sanctions. Iran's oil is effectively excluded from global transparent markets.
- Economic contraction
- Economy shrinking under sanctions pressure. Inflation approximately 60%. Rial has halved in value. Purchasing power severely eroded. Domestic manufacturing capacity exists but is degraded and cut off from global supply chains.
- Nuclear deal with Russia
- Iran has signed agreements with Russia for construction of four nuclear reactors. This deepens Iran's strategic alignment with Russia and creates additional sanctions complexity for any entity with exposure to Iranian energy infrastructure.
- Concentration risk signal
- Iran is not a viable sourcing origin for Western buyers under current sanctions. Concentration risk is relevant only for energy market analysts and companies requiring Strait of Hormuz transit risk assessment.
Climate & Physical Risk
Climate & Physical Risk
- Water crisis
- Iran faces a severe and accelerating water crisis. Lake Urmia has lost over 80% of its surface area. Groundwater depletion is widespread. Inter-provincial water disputes are intensifying.
- Extreme heat
- Southern and central Iran regularly experience extreme heat events. Khuzestan province has recorded temperatures exceeding 50C. Combined heat and humidity in Persian Gulf coastal areas approach human survivability limits.
- Air pollution
- Tehran and other major cities experience severe air pollution. Dust storms from degraded landscapes in western Iran and neighbouring Iraq are increasing. Environmental governance is weak.
- Seismic risk
- Iran sits on multiple active fault lines. The country experiences frequent earthquakes. The 2017 Kermanshah earthquake (7.3 magnitude) killed over 600 people. Infrastructure resilience to seismic events is low.
Sanctions & Policy Continuity
Sanctions & Policy Continuity
- Sanctions regime
- Iran is the most comprehensively sanctioned major economy. US primary and secondary sanctions cover oil, petrochemicals, metals, banking, insurance, shipping, and technology. EU snapback sanctions reimposed September 2025. UN Security Council sanctions also apply.
- EU snapback
- EU snapback sanctions reimposed September 2025 following JCPOA termination. These restore comprehensive EU restrictions on trade, investment, banking, and shipping with Iran. The sanctions are indefinite in duration.
- IRGC economic control
- The Islamic Revolutionary Guard Corps (IRGC) controls an estimated 20-40% of the Iranian economy through conglomerates, foundations (bonyads), and construction firms. IRGC entities are designated under multiple sanctions programmes.
- Domestic instability
- December 2025 protests reflected widespread economic grievances. The regime's response pattern — security force suppression, internet shutdowns, mass arrests — is well established. Population ~88 million. Youth unemployment high.