| The war in the Middle East clarifies the risk profile of the three main players present in the region: Iran, China, and the USA with its military fleet. In this fifth and final part of a mini-series, I outline aspects of Iran’s risk profile – Risk management strategies and measures. | In this contribution I am writing my own opinion, not that of any organization. |
Author: Manu Steens
Table of contents
A. General risk management strategies and frameworks
Iran’s primary strategy for managing risks is the ‘ Resistance Economy ‘. Formally developed by Supreme Leader Khamenei, it has been included in successive Five-Year Plans since 2012. The idea is that Iran should be as self-sufficient as possible in critical sectors such as energy, food, pharmaceuticals, and defense. In doing so, the country aims to become less vulnerable to foreign sanctions. According to Critical Threats, the Iranian regime views networks with Russia and China to circumvent sanctions as essential to keeping the economy afloat. Iranian state media even referred to this as an emerging economic alliance.
For security, Iran uses a ‘ Mosaic Defense strategy ‘. This means that military and security assets are deliberately dispersed. Missile stockpiles, command points, and IRGC units are not located in one central place, but in multiple locations. As a result, a single attack cannot immediately disable the entire defense network. It becomes more difficult for adversaries to find a single clear target that decides the outcome.
B. Insurance equivalents and financial buffers
1. IRGC ECONOMIC EMPIRE AS A FINANCIAL BUFFER
According to estimates, the IRGC controls a large part of the Iranian economy: approximately one-third to two-thirds of the GDP, through companies and organizations in energy, construction, telecom, transport, ports, and black market financing. This acts as a form of internal insurance for the regime. CISES reports that because many ordinary Iranian companies are cut off from legal trade and financing by sanctions, the IRGC is actually gaining more room on the black market. According to CFR , the IRGC uses this position, among other things, to smuggle oil, particularly to China, and thereby earn money for the Quds Force and its allies.
2. SANCTION AVOIDANCE NETWORKS AS FINANCIAL INSURANCE
In addition, Iran has built an extensive system to circumvent sanctions. In May 2026, FinCEN described a shadow network of suspected shell companies worth $5 billion. In 2025, OFAC sanctioned more than 875 individuals, ships, and aircraft in order to break such networks. Nevertheless, its scale demonstrates that Iran has deliberately built multiple financial routes as a risk management measure. Iranian state media described the use of shadow fleets by Iran, Russia, and China as a form of insurance policy.
C. Diversification measures
1. DIVERSIFICATION OF TRADE ROUTES
Iran has deliberately diversified its trade routes. It wants to be less dependent on sea routes that can be blocked by the US Navy. Therefore, Iran uses more land routes via Iraq, Pakistan, Turkey, and Central Asia. In 2025, a direct rail link with China was also activated. At the same time, non-oil exports grew to more than 50 billion dollars. The share of non-oil in total trade rose from 27% in 2011 to 78% in 2020. This shows a strong shift away from oil-dependent revenues. However, cooperation with Venezuela was disrupted by the US capture of President Maduro in January 2026.
2. ENERGY SELF-SUFFICIENCY
Iran has also attempted to make energy more domestically secure. Gasoline production rose from approximately 54 million liters per day in 2011 to approximately 120 million liters per day in early 2025. As a result, Iran is less dependent on imported refined products. Iran also increased domestic production in pharmaceuticals, steel, and agricultural supply chains. This is intended to reduce import dependency in sectors important for social stability .
3. ALLIANCE DIVERSIFICATION — THE CRINK-AXIS
Iran also spreads its strategic partnerships along the CRINK axis: China, Russia , Iran, and North Korea. China provides oil revenues and technology transfer. Russia supplies military equipment, such as Su-35 fighters, successors to S-300/S-400 air defenses, and Verba portable air defense systems, plus satellite intelligence. North Korea supplies ballistic missile technology in exchange for Iranian support. The EU classification of the IRGC as a terrorist organization on January 29, 2026, accelerated this shift away from Western relations.
D. Emergency funds and reserves
1. CONTINUITY OF OIL REVENUE VIA SHADOW FLEET
Iran’s most important emergency reserve is the continuous flow of oil revenues via shadow fleets and secret export channels. China buys approximately 90% of Iranian oil exports, averaging 1.38 million barrels per day in 2025. This generates billions of dollars annually, including for the IRGC budget. In practice, this functions as an emergency fund: it is the cash flow used to pay for the security apparatus. Without these revenues, the stability of the regime would quickly come under pressure. Iran and Russia jointly developed the shadow fleet infrastructure, which Iranian state media describe as strategic insurance.
2. BONYAD (FOUNDATION) SYSTEM
Iran also has a parallel economy through Bonyads: large quasi-government foundations that control an estimated 20 to 40% of GDP. They operate outside the ordinary state budget and are less exposed to international sanctions. Large Bonyads such as Bonyad Mostazafin and Setad manage real estate, industrial, and financial assets worth hundreds of billions of dollars. For the regime, they constitute emergency reserves that can be deployed independently of the formal budget.
E. Security measures
1. IRGC AND LAYERED INTERNAL SECURITY
Iran uses multiple overlapping security layers: the IRGC, the Basij, the Law Enforcement Forces and the Ministry of Intelligence and Security. The Basij numbers an estimated 90,000 to 150,000 active members and 300,000 reserves. The system is structured so that other components can continue to function if one part weakens. During the 2025-26 protests, the IRGC declared a yellow state of emergency in early January 2026. Ahmad Vahidi was appointed Deputy Commander of the IRGC on December 31, 2025. Following the strikes of June 2025, approximately 21,000 people were arrested.
2. INTERNET AND INFORMATION CONTROL
Iran uses internet control as a security tool. During the 2025-26 protests, nearly the entire internet was shut down to limit protest coordination and the dissemination of information. The National Information Network, Iran’s domestic intranet, ensures that important government and military communications can continue during such shutdowns. The IRGC monitors and disrupts the digital activities of the opposition through its Cyber Command. The EU and the US have sanctioned technology companies that enable surveillance and internet shutdowns.
3. MISSILE REPAIR AS A DETERRENT SECURITY
After the severe damage to the missile infrastructure during the 12-Day War of June 2025 and Operation Epic With Fury in March 2026, Iran prioritized rapid missile recovery. The IRGC opted for ‘ deterrence by volume ‘: rapidly rebuilding a large number of ballistic missiles to overwhelm Israeli and American missile defenses in a future conflict. New solid-fuel mixers came from external partners, particularly Russia and China, despite Western attempts to block supply. This became a central security investment in 2026.
F. Emergency plans
Iran’s most important contingency plan is the survival of the regime by maintaining the loyalty of the IRGC. Iran International calls that loyalty the decisive factor for regime continuity. The appointment of hardline IRGC commanders in late 2025 and early 2026 shows that the regime considered coercive power more important than economic reforms. The ‘ Fourth Successor ‘ plan, mentioned in the CISES analysis by Ibrahim S. (2026), points to preparation for prolonged conflict with the US and Israel, including succession protocols should leaders be eliminated. Also the Mosaic defense strategy is an emergency architecture: military resources are dispersed so that Iran can better survive concentrated air campaigns like the one in 2025.