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Iran is facing growing economic strain as the United States steps up its sanctions campaign and the conflict between the two countries enters its sixth month. Tehran says the war and restrictions on Iranian shipping have sharply reduced foreign trade, while inflation and pressure on household finances continue to worsen. The Trump administration has warned countries and financial institutions against maintaining business ties with Iran, raising the possibility of secondary sanctions. However, Washington has so far avoided imposing such penalties on major Iranian trading partners including China and India, a move that could have wider consequences for global trade.
Iran’s Trade Falls 35%
Iranian President Masoud Pezeshkian has said the country’s imports and exports have declined by nearly 35% because of US sanctions and the blockade of Iranian ports.
Pezeshkian also said Iran managed to sell around 90 million barrels of oil during the short-lived memorandum of understanding reached with Washington in June, when the US allowed Iranian oil sales.
The economic pressure has come alongside a sharp increase in prices. Iran’s annual inflation rate reached 66% last month, adding to the financial difficulties faced by households.
Mojtaba Khamenei Calls For Economic Action
Iran’s Supreme Leader Ayatollah Mojtaba Khamenei has called on the government to address the country’s worsening economic conditions. Khamenei, who has not appeared publicly since being injured in the February 28 attack that killed his father and predecessor, Ali Khamenei, urged authorities to tackle inflation, unemployment and rising prices.
The statement attributed to him also called for greater attention to the management of markets and the availability of goods and services.
US Expands Sanctions Pressure
Washington has described its latest campaign against Tehran as a major economic pressure effort and has warned foreign governments and companies that continuing business with Iran could expose them to secondary sanctions.
The US Treasury has already targeted Banque Misr, an Egyptian bank accused of conducting business with Tehran. Washington has also proposed restrictions that would affect the bank’s UAE branches and their access to dollar transactions. Egypt’s central bank said it and the country’s Foreign Ministry were engaging with US officials over the measure, adding that the restrictions applied specifically to Banque Misr UAE’s dollar transactions with correspondent banks.
Separately, the Treasury Department announced sanctions against an entity based in Hong Kong and an individual linked to Iran’s Bank Melli.
Qatar Pushes For Strait Of Hormuz Talks
As Washington increases economic pressure, diplomatic efforts to end the conflict are continuing. Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani travelled to Tehran on Thursday and met Iranian leaders. He said discussions included the need to restore open shipping through the Strait of Hormuz, a crucial route for global energy supplies.
Iranian Foreign Minister Abbas Araqchi described the discussions as “creative” on Friday. Qatar and Pakistan previously helped facilitate the June memorandum between Washington and Tehran, which was followed by a brief ceasefire before disagreements over the strait caused the arrangement to collapse.
Strait Of Hormuz Remains Disputed
The strategic waterway remains at the centre of the conflict. US military officials say American forces have cleared sea mines that Iran’s Islamic Revolutionary Guard Corps had placed in the strait. Trump has repeatedly claimed that the waterway is open.
Iran’s Revolutionary Guard, however, has rejected that claim, saying the strait remains closed to ships that do not have Iranian permission. Shipping data released Friday indicated that only seven commodity vessels passed through the Strait of Hormuz on Thursday, compared with 17 the previous day and a 10-day average of 15.
With negotiations stalled and economic restrictions tightening, Iran’s leadership is facing increasing pressure to address the domestic impact of the war while maintaining its position in the confrontation with Washington.