The legality of US and EU sanctions on Iran and their impact on regional trade and economic stability

Economic sanctions have become a central instrument of contemporary statecraft, positioned as alternatives to the use of armed force while increasingly embedded within global systems of finance, trade and energy. This dissertation examines the legality of United States and European Union sanctions on Iran and assesses their regional economic and legal effects in the Gulf, with particular emphasis on Qatar. It situates the Iran sanctions regime within public international law, focusing on the United Nations Charter, customary principles of sovereignty and non-intervention, international human rights law, and international trade law. Using a qualitative doctrinal methodology combined with thematic analysis of state practice, the study distinguishes between sanctions authorised by the United Nations Security Council and unilateral or secondary sanctions imposed autonomously by states and regional organisations. It argues that whereas UN-sanctioned measures have very solid legal basis under Chapter VII of the Charter, unilateral and extraterritorial acts, particularly those re-imposed by the United States since 2018, are positioned somewhere in a grey area. These steps put a heavy burden on the collective security structure provided by the Charter, undermine the principle of countermeasures, and produce a lot of tension with the international human rights and trade commitments. The dissertation also shows that the legal and economic implications of sanctions go much further than the state being targeted. It uses a regional case study of Qatar to demonstrate how third states internalise sanctions by de-risking their banks, withdrawing insurance, and diffusing compliance and energy-sector exposure and in effect make neutrality a condition maintained by risk management and no longer by legal autonomy. The paper also looks at the way the Israel Iran conflict of 20242025 hastened the shift toward using sanctions as a tool of hybrid conflict, watering the line between economic blackmail and security action. The study concludes that contemporary sanctions on Iran function not merely as foreign policy tools but as transnational governance mechanisms. It identifies targeted legal and policy reforms aimed at restoring normative coherence, strengthening humanitarian safeguards and mitigating disproportionate third-state impacts while preserving legitimate security objectives.