Western sanctions have stripped the Persian carpet industry of its biggest buyer, slashing export earnings by an estimated **US $358 million a year and collapsing modern export revenue by more than 95 % since 2017.** The loss threatens the livelihoods of roughly two million Iranians—many of them rural women—who depend on the centuries‑old craft for their daily income.

Hand‑made rug exports peaked at US $400 million in 2017, the last full year before the United States re‑imposed comprehensive sanctions in 2018. By the year to March 2025, customs data show exports had fallen to US $41.7 million, a drop of over 95 %. The simple subtraction of the two figures yields the $358 million annual revenue gap that analysts attribute directly to the sanctions. If the early‑1990s high of US $2 billion is used as a benchmark, the contraction would be even more dramatic, but the 2017‑2025 comparison provides the most reliable pre‑sanction reference.

The sanctions regime differs markedly from the trade restrictions imposed during the Iran‑Iraq war (1980‑88). War‑era controls were domestic measures—mandatory conversion of foreign‑currency earnings at an official rate, higher tariffs and quantitative quotas—that forced exporters to sell at heavily undervalued prices. Those policies reduced export values from a 1980‑81 high of $425 million to roughly $84 million, a 79 % decline. By contrast, the post‑2018 Western sanctions are extraterritorial. U.S. executive orders and the Comprehensive Iran Sanctions, Accountability and Divestment Act prohibit any U.S. person from dealing in Iranian carpets and impose secondary sanctions on third‑party banks and firms that facilitate such trade. The result has been a 95 % plunge in export revenue, the loss of a market that once accounted for more than 70 % of hand‑woven carpet sales, and a “no‑bank” environment that forces exporters into costly informal money‑transfer routes.

Industry leaders describe the impact in stark terms. Zahra Kamani, head of Iran’s National Carpet Center, called the sanctions “unkind and cruel” and said they caused the loss of the sector’s “biggest buyer”. Minister of Commerce Mohammad Atabak, speaking in June 2025, acknowledged the crisis but urged reforms: “We have lost important international markets, but we hope to revive this industry by reforming trade and currency regulations.” A year earlier he had called for a “transparent foreign‑exchange mechanism” to allow carpet exporters to repatriate earnings without punitive fees. The Iran Hand‑woven Carpet Producers & Exporters Association reported a 70 % fall in production since 2018, with only a third of workshops remaining fully operational.

With the United States closed, Iran has turned to Germany, the United Arab Emirates, Japan and China, yet volumes remain a fraction of historic levels. Prices for high‑end silk carpets have risen to US $30,000‑$45,000 per piece, reflecting soaring raw‑material costs and a 30 % depreciation of the rial against the dollar between 2023 and 2025. For many weavers, earnings have dwindled to a few dollars a day, threatening the transmission of the craft to future generations.

The collapse of the Persian carpet trade illustrates how modern sanctions can devastate a sector that once generated more than $2 billion annually and served as Iran’s largest non‑oil export. While the war‑era restrictions inflicted a severe but slower contraction, the post‑2018 Western sanctions have produced a faster, deeper collapse, erasing the United States as a buyer outright and choking the industry’s access to global financial networks. Unless diplomatic breakthroughs or targeted relief measures emerge, the ancient art of Persian carpet‑weaving faces an uncertain future.

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