World
Europe's Iran Policy Increasingly Mirrors US Strategy Despite Formal Distance
The European Union has welcomed heightened economic pressure on Tehran, including through the US-led Operation Economic Outcast, though it has not formally endorsed every aspect of Washington's approach. Nevertheless, since the United States withdrew from the nuclear agreement in 2018, Europe has increasingly functioned as Washington's junior partner on Iran policy.
This alignment predates the current conflict. Since the late 2000s, Europe has substituted declaratory diplomacy for independent action, publicly defending multilateralism while adapting its practices to US policy. The gap became especially clear after President Trump withdrew from the JCPOA and reimposed sanctions in 2018. Despite European opposition, mechanisms like the blocking statute and INSTEX failed to sustain meaningful trade, as most major European companies exited Iran to protect their access to the US market.
This was an economically rational choice. The US market and financial system carry far greater importance for European firms than Iran does, and the dollar's global dominance allows Washington's sanctions to reach well beyond US borders. European banks, insurers, shipping firms and industrial companies remain heavily exposed to US regulators and markets, leading them to prioritize American access over Iranian opportunities regardless of their governments' official positions.
Still, Europe retains some economic relevance to Iran. According to the European Commission, EU-Iran goods trade totaled €3.7 billion in 2025, including €2.97 billion in EU exports and €760 million in imports. Iran represented only about 0.1 percent of EU exports overall, but the EU remains a significant trading partner for Tehran. These figures likely understate indirect trade, as European goods reach Iran via Türkiye and particularly the United Arab Emirates, a key re-export hub. Increased US pressure on Ankara, Dubai traders, logistics firms and regional banks would therefore also affect European-origin products even without direct contracts between European firms and Iranian buyers. The campaign dubbed