Tehran's Grand Bazaar bustles, but families struggle as war and sanctions squeeze Iran's economy

The sprawling corridors of Tehran's Grand Bazaar remain crowded, but the urgency in the air has little to do with festive shopping. For many Iranians, the market has become a last resort for finding slightly more affordable staples, as prices at regular grocery stores have skyrocketed since the war began in late February.

A kilogram of walnuts, for instance, now carries a price tag of 1,480,000 Tomans — roughly $11 — a sum that places it firmly out of reach for many. Rice is reportedly 60% more expensive, and beef has surged by 150% compared to pre-war levels.

"No matter what you look at, whether it's food, medicine, cleaning products or basically anything people need in their everyday lives, prices have gone up a lot," said Masoud, a Tehran resident who only gave his first name. "It's become very difficult for us, especially for people like us who live on a fixed salary."

His sentiment is echoed across the city. Ahmad Karimi, a taxi driver, described a dramatic erosion of his purchasing power. "My purchasing power has dropped significantly, like at least 40% in terms of rial value," he said. "We have virtually given up on many things."

Baker Mahdi Talei has watched his customer base dwindle. "People are struggling to make ends meet. They can't afford it. They buy less," he said, noting that his bakery once used 13 or 14 bags of flour daily but now sees far fewer customers.

The economic pain is a direct consequence of the conflict with the United States and Israel. A naval blockade has crippled Iran's ability to export oil, its most valuable commodity, while international sanctions have cut off access to formal banking and trade channels. President Masoud Pezeshkian acknowledged the hardship, stating that the country's supply routes have been blocked, forcing goods to be brought in through more difficult and expensive channels.

"The main concern I have as a manager of this situation of 'neither war nor peace' is not whether the United States can strike us," Pezeshkian said. "What concerns us is people's livelihoods and their economic situation."

The International Monetary Fund projects inflation in Iran to approach 70% by the end of the year, with the economy expected to contract by more than 5%. While heavily subsidized gasoline has so far shielded motorists from the worst, a presidential aide has warned that daily consumption now outpaces domestic production, potentially forcing a price hike that could trigger public unrest.

Iran's leaders have responded to domestic discontent with a heavy hand, declaring participation in anti-government protests a treasonous offense punishable by death. The U.S. administration, meanwhile, has vowed to intensify economic pressure, with President Donald Trump threatening the "most crushing economic operation ever taken against any country."

Despite the immense strain, experts remain skeptical that Iran will capitulate quickly. The country has decades of experience circumventing sanctions through informal trade networks, domestic production, and a shadow fleet for oil exports. For now, the bazaars remain open, but the resilience of the Iranian people is being tested like never before.