Iran's Leaders Flag Economic Strain as US Sanctions Bite Deeper
Iran's leaders acknowledge severe economic strain from US sanctions and blockade, with trade down 35% and inflation at 66%.
Iranian leaders are publicly acknowledging the severe economic toll of the ongoing conflict with the United States, even as the war enters its sixth month. President Masoud Pezeshkian told state media that foreign trade has slumped by nearly 35%, a direct result of American sanctions and a naval blockade of Iranian ports.
Supreme Leader Ayatollah Mojtaba Khamenei, in a written statement, urged the government to seriously address the "chain of economic and livelihood challenges," specifically citing inflation, unemployment, and price management. The call comes as annual inflation in Iran hit 66% last month.
The economic pressure is being compounded by Washington's intensified financial campaign, which the Trump administration has described as an "economic D-Day." The US Treasury has imposed sanctions on Egypt's Banque Misr for its business with Tehran, proposing a rule to cut off the bank's UAE branches from dollar transactions. Egypt's central bank confirmed it is in contact with US officials, noting the measure is limited to the bank's dollar dealings with correspondent banks. Separate sanctions were also issued against a Hong Kong-based entity and an individual linked to Iran's Bank Melli.
Despite the pressure, President Pezeshkian noted that Iran managed to sell about 90 million barrels of oil during the brief memorandum of understanding signed with the US in June, when Washington permitted such sales.
Meanwhile, diplomatic efforts to end the war continue. Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani met with Iranian leaders in Tehran, stressing the importance of returning to open shipping through the Strait of Hormuz. Iranian Foreign Minister Abbas Araqchi described the talks as "creative." Qatar and Pakistan had previously helped broker the June agreement that led to a short-lived ceasefire.
The status of the strait remains contested. US military commanders say they have cleared sea mines laid by Iran's Islamic Revolutionary Guard Corps, and President Trump insists the waterway is open. The IRGC navy, however, calls such claims "an obvious lie," maintaining the strait is closed to ships without Iranian permission. Preliminary shipping data showed only seven commodity vessels transited the strait on Thursday, down from 17 a day earlier.