Iran's leaders are bracing for tougher U.S. economic measures after President Donald Trump vowed to hit the country hard financially, with Treasury Secretary Scott Bessent promising unprecedented steps as early as next week. Officials fear fresh pressure could reignite the unrest that already followed months of war-driven hardship.
Iran's clerical establishment is worried that new U.S. economic punishment could push the country back into nationwide unrest, according to three Iranian officials who spoke to Reuters. The concern comes even as Tehran projects confidence after nearly six months of conflict with the United States that included effectively closing the Strait of Hormuz, a vital global oil route.
Trump said Friday he would hit Iran hard economically, a day after Bessent said Washington would impose measures on Tehran that have never been seen as early as next week. Washington has not detailed what those measures will entail.
War leaves households squeezed
Iran entered the war, which began with U.S. and Israeli attacks on February 28, already carrying high inflation, a weakening currency and energy shortages. It must now also absorb damaged infrastructure, disrupted trade and lost production.
Iran's annual inflation rate reached 66% in July, while consumer prices were 87.9% higher than a year earlier, according to Iran's Statistical Centre. Food inflation hit 128% year-on-year. Rents rose 31% year-on-year in March, and state media reported Tehran housing prices roughly 50% above last year.
The minimum wage was raised by about 60% this year, but continued rial depreciation has cut its dollar value from about $105 to $86 since late March. Civil engineer Arshia, whose construction projects stalled once the war began, said he no longer knows how ordinary Iranians will cope with further sanctions.
Rulers watch for renewed unrest
For Iran's leadership, the deeper risk may not be the economic pain itself but the chance that worsening hardship reignites mass protests, two political insiders and one official told Reuters. In January, nationwide protests over economic hardship were crushed by the Revolutionary Guards and the Basij militia, with thousands killed.
The appointment of Hossein Taeb, a key architect of past crackdowns, to lead the Basij last week is one of the clearest signs of official concern over renewed unrest, a former reformist official said. In recent months authorities have also responded with executions, arrests and lengthy prison sentences targeting journalists, lawyers and activists, rights groups say.
Blockade squeezes trade and fuel
A U.S. naval blockade has pushed goods onto costlier land corridors and the Caspian Sea, while strikes on bridges have disrupted overland transport. President Masoud Pezeshkian acknowledged the strain last week: "Our problems have multiplied several times over, while our income has also fallen."
The blockade has also cut off Iran's gasoline imports, lawmaker Reza Sepahvand told Iran's ILNA news agency, with daily gasoline output at about 130 million litres against consumption of 137 million litres.
Source: Investing.com
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