Iran-related international sanctions constitute, within the global political economy system, a structural regulatory mechanism that directly affects not only the target country but also third-party actors engaged in economic interaction with that country. From Turkey’s perspective, these sanctions emerge—beyond their diplomatic dimension—as a multilayered economic reality that transforms private sector decision-making processes, risk perceptions, and strategic orientations. Considering the broad sectoral distribution of trade relations between Turkey and Iran—spanning energy, logistics, construction, food, textiles, and various industrial branches—the impact of sanctions creates a comprehensive sphere of influence extending from micro-level firm behavior to macro-level trade volumes.
Within the framework of political risk theory, sanctions serve as an instrument that concretizes the impact of state-originated uncertainties on the private sector. Sanctions imposed on Iran, particularly through the risk of secondary sanctions, restrictions on access to the international banking system, and sudden regulatory changes, increase the operational risk profile of Turkish companies. This situation renders firms’ investment decisions more cautious and compels them to restructure their risk premium calculations and capital allocation processes. For large-scale companies integrated into the international financial system, sanctions generate a field of uncertainty that affects not only direct trade with Iran but also indirect connections within the global network.
In the context of the new institutionalist approach, sanctions lead companies to strengthen their compliance mechanisms. The obligation to conform to international norms and regulatory frameworks has accelerated the institutionalization of internal control systems, legal advisory structures, and risk management procedures, particularly for large holdings and multinational corporations. In contrast, establishing the same level of institutional capacity is more costly and complex for small and medium-sized enterprises. This asymmetrical impact demonstrates that sanctions produce differentiated outcomes depending on firm size.
From the perspective of supply chain and dependency theories, Iran’s role as an energy supplier and an important export market for Turkey increases the dimension of economic vulnerability associated with sanctions. Constrictions in banking channels, disruptions in payment systems, and uncertainties in insurance processes raise transaction costs and necessitate the search for alternative suppliers. This process entails the restructuring of logistics routes and the increasing complexity of contractual mechanisms. Particularly for firms integrated into global value chains, the risk of indirect sanctions creates an expanding field of uncertainty through third-party relationships.
Nevertheless, the impact of sanctions is neither unidirectional nor solely restrictive. The withdrawal of Western firms from the Iranian market has provided Turkish companies with a relative competitive advantage in certain sectors. In areas such as construction, textiles, food, automotive sub-industry, and consumer goods, geographic proximity, cultural ties, and flexible commercial structures have facilitated the positioning of Turkish firms in the market. However, the sustainability of this advantage remains fragile due to the variable and geopolitically sensitive nature of sanction regimes. The preference for shorter-term and more flexible trade models rather than long-term investments reflects the direct impact of an environment of uncertainty.
Sanctions on Iran compel the Turkish business community to move beyond a traditional profitability-oriented approach. Geopolitical risk analysis, legal compliance, financial sustainability, and integration into the international system have become integral components of strategic decision-making processes. In this context, diversification of markets and supply sources, strengthening compliance processes, and the development of flexible trade models in regional markets emerge as primary strategic tendencies. In an environment of uncertainty, companies seek not a passive position but a strategic posture that adapts and disperses risks.
In conclusion, sanctions against Iran exert both restrictive and transformative effects on the Turkish business community. While increasing political and financial risks direct firms toward more cautious behavior, they simultaneously encourage the development of institutional capacity and strategic planning capabilities. In this regard, Iran sanctions should be evaluated as a structural factor shaping the competitiveness and sustainable growth strategies of the private sector in Turkey.
Prepared by: Elif TOPAL