Following increased economic pressure on the Iranian regime and a naval blockade, its leaders fear that US President Donald Trump’s threat of further economic punishment could deepen hardship, reignite unrest, and further erode the regime’s legitimacy.
Despite the Iranian regime leaders’ warmongering after nearly six months of war and the closure of the Strait of Hormuz, a vital route for global oil supplies, they are facing growing pressure inside the country that could lead to nationwide unrest. The protests taking place across Iran over economic conditions are examples of this pressure.
On Friday, August 14, U.S. Treasury Secretary Scott Bessent said Washington would impose measures against Tehran by early the following week that had never been seen before. The remarks followed additional economic sanctions previously imposed on the Iranian regime. Washington did not specify what the new measures would include.
Iran entered the war with high inflation, a weakening currency, energy shortages, sanctions, and deep structural weaknesses, and it now has to contend with damaged infrastructure, trade disruptions, lost production, and reconstruction costs.
According to Iran’s Statistical Center, the country’s annual inflation rate reached 66% in July, while consumer prices were 87.9% higher than a year earlier. Food inflation reached 128% compared with the previous year.
For the Iranian regime, the greater threat may not be the economic pain itself, but the risk that worsening hardship will reignite public unrest. Poor living conditions, dictatorship, and political pressure on the people led to widespread protests across Iran in January, and the Iranian regime responded with an unprecedented crackdown. That repression resulted in the deaths of several thousand people in Iran. The causes behind the January protests, as well as all previous protests, not only remain but have intensified.
The appointment of Hossein Taeb, a key architect of past crackdowns, as the head of Iran’s Basij last week is one of the clearest signs of growing concern among Iranian regime officials about the reemergence of unrest.
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The Basij is a paramilitary force affiliated with the Islamic Revolutionary Guard Corps (IRGC), and both have been used by the ruling clerics to suppress protests.
In recent months, the Iranian regime has responded to fears of renewed unrest with executions, arrests, summonses, and lengthy prison sentences against journalists, lawyers, activists, human rights defenders, and students.
These measures deepen the divide between the Iranian regime and the general public, who have grown increasingly frustrated by mounting economic pressure.
Families are reducing their consumption of meat and other essential goods and choosing cheaper alternatives.
According to the Statistical Center, rents in March were 31% higher than the previous year, while state media reported that housing prices in Tehran were nearly 50% higher than a year earlier.
Iran’s minimum wage increased by about 60% this year, but the continued decline in the value of the rial has reduced purchasing power, with the dollar value of the minimum wage falling from about $105 in late March to $86.
The Iranian regime has tried to move essential goods through alternative routes, including land corridors and the Caspian Sea, but those alternatives have also come under pressure.
Iranian regime president Masoud Pezeshkian acknowledged the pressure last week, saying, “Our problems have multiplied several times, while our income has also declined.”
He said goods that once arrived by ship now take longer routes to reach Iran, driving up prices, and added that Iran is selling less oil and collecting less tax revenue from damaged or bankrupt businesses. Reza Sepahvand, a member of the regime’s Majlis (parliament), told the state-run ILNA news agency on Saturday, August 15, that the blockade had also effectively cut off Iran’s gasoline imports. He added that Iran’s daily gasoline production had reached about 130 million liters, while daily consumption stood at 137 million liters.
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The latest figures from the Iranian regime’s Statistical Center show that year-over-year inflation for food and beverages reached 128.1% in July and August, a figure significantly higher than the country’s overall inflation rate of 87.9%. As a result, the cost of buying a fixed basket of food has more than doubled compared with the same period last year, leading to a substantial decline in per capita consumption of essential goods. According to reports from food producers’ trade associations, consumption of red meat, poultry, and eggs has fallen by 25% to 50%, while per capita dairy consumption has dropped dramatically from about 100 kilograms at the beginning of the 2010s to 40 kilograms today.
However, according to the Iranian regime’s Statistical Center, year-over-year food inflation had already reached a three-digit level of 106.7% in February, before the war.
Farzad Talakesh, secretary-general of the Iran Poultry Federation, said in May this year that the reason chicken had not become scarce in the market was declining consumption. He added that per capita chicken consumption had fallen by 25% to 30%, and he told the state-run Trade News that chick placement had declined by the same amount. He warned that if economic conditions improved and chicken consumption increased, current production would not be sufficient, disrupting supply and demand and driving prices higher.
Ali Ehsan Zafari, CEO of the Dairy Cooperatives Union, also told the state-run Young Journalists Club in August: “At present, average per capita dairy consumption has fallen below 40 kilograms, whereas in 2010 it exceeded 100 kilograms. According to the statistics, we had 1,200 active dairy production units in the country in 2010, but that number has now fallen to fewer than 250.”
According to a report provided by the Iranian regime’s Ministry of Agriculture to journalists, the war has caused the baseline prices of essential commodities in global markets to rise by 10% to 20%. International shipping costs have also increased by 120% to 200%, contributing to higher food prices.
According to the Iranian regime’s Ministry of Agriculture, the destruction of steel plants, petrochemical facilities, and upstream packaging industries has increased food packaging costs by 150% to 300%.
The Iranian regime has chosen the path of confrontation with both the international community and the people of Iran. By increasing repression and executions, it seeks to suppress the protest potential of Iranian society for a period while resisting U.S. pressure by any means possible.
In any case, if the Iranian regime yields to the people’s demands, it will collapse in the shortest possible time, forcing it to take the opposite path. It may appear that the Iranian regime has managed to withstand global and regional powers, suggesting this is a sign of strength and leading some to conclude that negotiations with the regime and acceptance of the situation are necessary.
However, experience has shown that the Iranian regime is struggling for survival, and its not being overthrown by the United States should not be seen as a sign of strength. The answer is that the path to overthrowing the mullahs does not lie through foreign war. Although the war has weakened the Iranian regime’s military capabilities, it will not lead to its overthrow, even if the attacks become many times more deadly.
If, and only if, the world and the region seek growth, prosperity, and stability, and if the Iranian regime stands in the way of those goals, then the only solution is the people of Iran and support for an inclusive democracy in Iran.
