Have You Noticed Prices Rising? Here’s the Hidden Reason Behind It
Gas prices are up. Groceries cost more. Business deals are taking longer. But have you ever wondered why?
The truth is, sanctions aren’t just a political issue—they’re affecting your daily life and wallet in ways you may not even realize.
When governments impose sanctions, the consequences often seem like distant political issues. However, economic sanctions directly impact daily expenses, job opportunities, and global economic stability. Whether through rising food and fuel prices, disrupted supply chains, or financial restrictions, sanctions affect consumers, workers, and businesses worldwide.
This article explores how these economic measures translate into higher costs and economic instability for ordinary people—and more importantly, what you can do about it.
The Ripple Effect of Sanctions on Everyday Life
Higher Prices on Essentials
Sanctions can cause inflation and rising costs of goods and services. When trade restrictions limit essential imports like oil, gas, wheat, and electronics, prices increase for consumers.
Example: Sanctions on Russia due to the Ukraine conflict led to global oil and gas price surges, increasing energy bills and transportation costs. Similarly, restrictions on Russian wheat exports contributed to food price hikes in Middle Eastern and African countries.
Supply Chain Disruptions & Product Shortages
Sanctions limit the flow of goods, leading to delays, shortages, and increased costs.
Example:
- The US-China trade war resulted in semiconductor shortages, delaying the production of cars, smartphones, and appliances.
- Sanctions on Iran and Venezuela affected the global oil supply, causing volatility in fuel prices.
Currency Devaluation & Inflation
Financial sanctions weaken a country’s currency, making imports more expensive and causing inflation.
Example:
- The Turkish Lira lost significant value after US-imposed sanctions in 2018, driving up import costs.
- The Iranian Rial plummeted due to long-standing US and EU sanctions, increasing living expenses.
Banking Restrictions & Payment Delays
Sanctions often target financial systems, restricting access to international payment networks like SWIFT. This affects individuals and businesses trying to send or receive money internationally.
Example:
- Many freelancers and businesses in Russia, Iran, and Venezuela have lost access to PayPal, Stripe, or international banking services.
- Global businesses face delays and compliance hurdles when dealing with sanctioned regions.
The Impact on Jobs & Business Opportunities
Job Losses in Certain Industries
Sanctions force multinational companies to shut down operations or cut jobs, affecting industries such as tech, aviation, energy, and finance.
Example:
- Western companies exited Russia after 2022 sanctions, leading to thousands of job losses.
- European and US oil companies ceased operations in Venezuela, impacting employment and energy production.
How Business Owners & Freelancers Are Affected
Entrepreneurs and freelancers working internationally may find their income streams disrupted due to financial restrictions.
Example:
- Iranian and Russian freelancers struggle to access global payment platforms, limiting their ability to work with international clients.
- Businesses in neutral countries must navigate complex compliance rules to avoid violating secondary sanctions.
Investors Face Higher Risks & Limited Access
Sanctions increase uncertainty, making some markets riskier for investments. Foreign companies operating in sanctioned regions face regulatory scrutiny and financial penalties.
Example:
- Dubai-based financial firms must assess compliance risks when dealing with Russian or Iranian clients to avoid US penalties.
- Investors in cryptocurrency and fintech must navigate anti-money laundering regulations to prevent violations.
Winners & Losers: Who Benefits from Sanctions?
Industries That Profit from Sanctions
While many sectors suffer, some thrive:
- Energy exporters (UAE, Saudi Arabia, US) benefit when oil and gas prices surge.
- Defense contractors see increased demand as military spending rises.
- Alternative finance providers (crypto platforms) gain users seeking to bypass traditional banking restrictions.
Who Suffers the Most?
- Ordinary consumers facing higher prices and inflation.
- Businesses struggling with supply chain disruptions and financial restrictions.
- Workers losing jobs in affected industries.
How to Protect Yourself from the Impact of Sanctions
Since sanctions can impact global economies unpredictably, individuals and businesses must take steps to mitigate risks.
Stay Informed: Track global trade policies and sanctions affecting your industry.
Diversify Income Streams: If your industry is vulnerable, explore alternative markets and revenue sources.
Secure International Payment Options: Freelancers and business owners should look into crypto payments, multi-currency accounts, or alternative banking solutions.
For Businesses: Ensure compliance with global sanctions laws to avoid penalties.
For Consumers: Adjust financial strategies to cope with inflation and price fluctuations.
Conclusion: How You Can Stay Ahead
Sanctions aren’t just a political issue—they affect your everyday financial choices. Rising prices, inflation, job uncertainty, and business disruptions are all part of the equation. The next time you see an increase in gas prices, delayed shipments, or rising inflation, global sanctions may be playing a role. To stay ahead, stay informed about global economic shifts, adjust your financial and career strategies, and plan for economic uncertainty.
How do you think sanctions will shape the economy in 2025?
For additional information, please contact Al Safar & Partners at +971 4 422 1944 ext. 720 or +971 55 763 0405. You can also reach us via email at reception@alsafarpartners.com Learn more about our services by visiting our website at www.alsafarpartners.com
Written By:
Dr. Ahmed Hatem - Partner & Head of Corporate and Commercial department at Al Safar and Partners Law Firm.