War weighed on US midterms, but Iran's economy is paying heavier price

Iran's economic crisis is worsening as a US naval blockade, wartime damage and disrupted trade routes impact its industry, while the threat of renewed war with America adds pressure to an already severe downturn. The war influenced the US midterm elections, with Democrats gaining control of Congress. Iran's GDP declined more than 10 percent year-on-year in the latest quarter.

Speaker Mohammad Bagher Ghalibaf criticized the Democrats' victory, warning that any attempt to ignore public opposition would lead to a "nightmare." Tehran's defiance is evident, but the economic consequences of the conflict are becoming more apparent. Iranian cargo is accumulating in Pakistani ports, with storage charges exceeding the value of some shipments.

Businesses struggle to find alternative transport through Turkey, leading to extra costs and delays. Iran's annual GDP contracted by 10.1 percent in the quarter ending June 20, with industry and mining shrinking by 14.7 percent, and oil and gas output falling by 26.4 percent. Energy shortages pose a long-term threat to industrial production.

A gas shortfall of around 400 million cubic meters daily could cause supply issues in 11 of Iran's 31 provinces during winter, threatening industrial consumers. The cement industry already faces reduced gas supplies, forcing producers to use more expensive mazut. While some trade routes are easing, Iran's overall foreign trade remains under strain.

The government and foreign ministry express pessimism about negotiating with the US, and domestic protests highlight growing grievances over economic issues.