The coronavirus crisis economic impact on Iran is likely to force a substantial reduction in funding terror in the region far beyond the impact of sanctions to date, an INSS report said on Tuesday.

The report by INSS Iran expert Raz Zimmt and associate Tomer Fadlon said that, “The outbreak of the coronavirus dealt a harsh blow to the Iranian economy, which had already fallen to a record low point in the wake of economic sanctions imposed by the United States and the decline of oil prices.”

“The economic impact of the pandemic is particularly severe because it harms sectors that were less affected by the sanctions,” said the report.

Zimmt and Fadlon wrote that, “Tehran is trying to gain relief from the sanctions, but in the meantime has been forced to ask the International Monetary Fund” for a $5 billion loan.

They said that, “Tehran will probably be hard-pressed to finance some of its military activity in the regional arena. Iran has already been compelled by the renewal of American sanctions two years ago to reduce its support for particular organizations in the Arab world, including Hezbollah, which is facing severe economic distress.”

“The damage done to Iran is likely to further restrict its abilities to assist its proxies in the region,” the report continued.

According to the report, the coronavirus crisis impact on oil, international trade, global travel and transportation, tourism and moving goods through its neighbors’ borders, all in a major pilgrimage season, have been devastating.

“A sharp decline in the price of oil made matters worse,” noting that while oil was selling at $60 a barrel at the end of January, it was down to $25 a barrel by the end of March.

Next, the report stated that, “Restrictions on international trade seriously diminished imports of raw materials into Iran and harmed its ability to export non-oil products.”

The authors added that, “The cessation of flights to and from Iran and the closure of its land borders in the wake of the coronavirus outbreak have also imposed a heavy economic price, particularly the closure of the crossings between Iran and Iraq, which Iran used to export essential goods and apparently to smuggle oil and evade the sanctions regime as well.”