War weighs on Iran’s economy as US intensifies sanctions

Tehran's leaders are grappling with the economic impact of the ongoing war with the US, as Supreme Leader Ayatollah Khamenei urges the government to address the hardships faced by citizens, including rising inflation and unemployment. President Masoud Pezeshkian reported a significant decline in foreign trade, attributing a 35% drop to US sanctions and a blockade of Iranian ports.

Despite the challenges, Iran remains committed to maintaining control over the Strait of Hormuz, which grants the country strategic leverage in global energy markets. The government has prioritized tackling economic pressures, managing markets, and reducing dependence on the dollar, while also pursuing diplomacy and defense in equal measure.

However, six months into the conflict, negotiations between Iran and the US have stalled, and the administration has intensified sanctions, likening its efforts to an "economic D-Day." The Treasury Department has imposed penalties on some Iranian entities but refrained from targeting major trade partners like China and India, leaving the US and global economies vulnerable to further economic consequences.