Hossein Tohi & Alireza Haghighi in London But while U.S. sanctions are strengthening the hand of Iran’s conservative factions, they are also exacerbating the country’s severe challenges. Growing regional tensions between Iran and its allies, on one side, and the U.S. and its Middle Eastern partners, on the other, create an unstable environment, making it very difficult for Iranian officials to effectively develop and reform the economy.