October 7, 2025

Information Cutoff: 2:00 pm ET

Avery Borens, Kelly Campa, Ben Rezaei, Zahra Wakilzada, Katherine Wells, Carolyn Moorman, Andie Parry, and Brian Carter

Iran is pursuing alternative mechanisms, which may include barter systems, to mitigate the impact of snapback sanctions. Iranian Government Spokesperson Fatemeh Mohajerani stated on October 7 that the Iranian government aims to counter snapback sanctions by deepening ties with neighboring countries and international blocs such as the Eurasian Economic Union, BRICS, and Shanghai Cooperation Organization. Mohajerani added that the Iranian government will also use barter mechanisms to sustain trade. An Iranian trade official similarly stated on October 7 that the Iranian government is preparing alternative ”mechanisms“ to reduce the impact of snapback sanctions on Iran’s trade agreements. The United Nations Security Council (UNSC) reimposed snapback sanctions on Iran on September 27, and the European Union (EU) reimposed sanctions on Iran on September 29.

These alternative mechanisms may include barter systems that bypass sanctions. US media previously reported on October 5 that Iran and China have used barter systems that bypass dollar transactions to evade US sanctions since at least 2018, including via the exchange of Iranian oil and metals for Chinese goods and infrastructure projects. Unspecified officials told the Wall Street Journal on October 5 that China funded infrastructure projects in Iran in 2024 in exchange for 8.4 billion US dollars of Iranian oil.

Iran’s moves to mitigate sanctions are probably driven by concerns that sanctions on the Iranian economy will trigger an economic downturn. The World Bank forecasted in its October report that Iran will face an economic downturn over the next two years. The World Bank stated that the Iranian economy will shrink by 1.7 percent in 2025 and 2.8 percent in 2026, which is a change from the World Bank’s April 2025 forecast of 0.7 percent growth in 2026. The World Bank attributed this decline to reduced oil exports and non-oil economic activity due to the reimposition of UNSC sanctions and economic disruptions that followed the Israel-Iran War. The World Bank’s assessment comes amid the reimposition of sanctions on Iran and after several countries, including Canada, New Zealand, Australia, and Turkey, stated that they would abide by UNSC measures.

• Iranian Sanctions Mitigations: Iran is pursuing alternative mechanisms, which may include barter systems, to mitigate the impact of snapback sanctions. Iran’s moves to mitigate sanctions are probably driven by concerns that sanctions on the Iranian economy will trigger an economic downturn.

• Ceasefire in the Gaza Strip: The Hamas-Israel ceasefire in the Gaza Strip is a framework ceasefire agreement and not a comprehensive agreement to end the war. Hamas and Israel continued to hold indirect negotiations on US President Donald Trump’s ceasefire plan in Egypt on October 7, which demonstrates that both sides view the plan as a starting point or framework for further negotiations rather than a comprehensive agreement to end the war

• Syrian Democratic Forces and Syrian Government Integration: The United States facilitated a ceasefire between the Syrian government and the Syrian Democratic Forces (SDF) on October 7 after fighting broke out between Syrian government and Kurdish forces in two Kurdish-dominated neighborhoods of Aleppo City. US mediation temporarily halted the brief fighting in Aleppo City, but similar incidents will almost certainly erupt absent further progress from either side towards the SDF’s integration into the Syrian state.

• Hezbollah Disarmament: The Lebanese government has continued to take steps to disarm and weaken Hezbollah. The Lebanese Council of Ministers held a cabinet session on October 6 to review the Lebanese Armed Forces (LAF)’s first monthly progress report on the implementation of its plan to disarm Hezbollah south of the Litani River in the next three months.

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