Iran’s worsening economic crisis raises questions over Tehran’s willingness to compromise
As Iran’s economic strain deepens, an expert told the Post that the regime is not close to collapse despite rising inflation.
Recent images from Iran depict long lines of vehicles queuing to refuel, highlighting the dire economic conditions the country faces – one of its most severe in decades. The national currency, the rial, has plummeted against the US dollar, dropping below 2 million rials for a single dollar on the black market. Inflation has surged, and difficulties in importing and exporting goods have intensified, with crude oil exports plummeting to around 220,000-255,000 barrels per day in August, compared to 2 million barrels per day in March.
Senior Iranian officials, including President Masoud Pezeshkian, have acknowledged that the country's foreign trade has contracted by approximately 35% due to US sanctions and disruptions to maritime trade. The World Bank estimates Iran's economy contracted by 2.7% during the fiscal year ending in March 2026, and warns that the ongoing conflict could further weaken the economy.
Dr. Raz Zimmt, director of the Iran and Shi ite Axis Program at the Institute for National Security Studies, told The Jerusalem Post that the main issue is inflation, with official rates topping 80%. However, basic food prices have soared by 120% to 180%. Iran's reliance on a network of "shadow fleet" tankers and intermediaries to circumvent US sanctions to sell oil has waned, with exports falling dramatically.
US Treasury Secretary Scott Bessent has warned that the US administration will impose severe penalties on any country aiding Iran's access to foreign currency.
While Iran's economy may withstand the sanctions for a while, the regime may still be able to withstand the pressure for some time. However, experts caution against assuming Iran will surrender to US demands. Iran may not believe that concessions will guarantee an end to the war, and economic pressure alone is not sufficient to force Tehran into a compromise.
Written by urgent.news from Jerusalem Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
