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Abstract The reinstatement of large-scale United States economic sanctions against Iran in 2018 marked a significant shift in the long-standing conflict between Washington and Tehran. These sanctions coincided with a period of acute domestic crisis in Iran, characterized by economic decline, widespread protests, and governance challenges. This study examines whether intensified U.S. sanctions have acted as a catalyst for political change in Iran or whether internal dynamics have shaped the impact of these sanctions. Adopting a qualitative approach with a process-tracing research design, the study analyzes the causal relationships between sanctions, economic hardship, domestic instability, and regime resilience between 2018 and 2026. Data were sourced from government publications, economic and human rights reports, media sources, and academic literature, and analyzed thematically. Findings indicate that sanctions have significantly weakened Iran’s political economy, resulting in high inflation, currency devaluation, increased poverty, and deteriorating living conditions. These conditions have fueled recurrent protests, often linking economic grievances with broader dissatisfaction regarding governance, corruption, and ideological direction. However, the analysis reveals limited evidence that sanctions have led to elite fragmentation or systemic instability capable of threatening regime survival. Instead, sanctions appear to have reinforced authoritarian resilience by consolidating conservative power, strengthening the economic and political influence of the Islamic Revolutionary Guard Corps, and legitimizing state repression through narratives of external threat. The study concludes that while sanctions intensify social unrest and expose governance deficiencies, they are unlikely to produce regime change in the absence of coordinated internal opposition and elite defection.