Battered by War, Iran’s Rulers Wary of More Economic Pain and Unrest if US Tightens Pressure

Iran's leadership is increasingly apprehensive about the potential fallout from new U.S. economic sanctions, fearing they could intensify domestic hardships and reignite widespread unrest. President Donald Trump has pledged to impose unprecedented economic pressure on Tehran, with Treasury Secretary Scott Bessent indicating measures could be implemented as early as next week.

Despite projecting resilience amid a protracted conflict, Iranian officials acknowledge mounting domestic pressure. The war has inflicted significant damage on Iran's infrastructure, disrupted trade routes, and led to production losses, compounding pre-existing economic vulnerabilities such as high inflation and a weakening currency. These factors create a volatile environment where further economic punishment could erode the regime's legitimacy.

Ordinary Iranians are already grappling with severe economic challenges. Arshia, a civil engineer, described project delays and cancellations halting the construction industry, leaving him struggling to find work. "If Trump imposes more sanctions, how will ordinary people survive? I don’t want my country to be punished militarily or economically. We’re already struggling,” he stated, reflecting the anxieties of many.

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If Trump imposes more sanctions, how will ordinary people survive? I don’t want my country to be punished militarily or economically. We’re already struggling.

Mohsen, who operated a small import-export business with Gulf countries, was forced to lay off 10 employees after Iran's retaliatory actions against U.S. strikes disrupted operations. "I had to lay off 10 employees. It was painful, but I had no choice. I could no longer afford to pay their salaries, and now I’m relying on my savings to support my family," he explained.

The economic strain is evident in soaring inflation rates, with annual inflation reaching 66% in July and food inflation hitting 128% year-on-year. For the Iranian rulers, the greater concern may be the risk of worsening economic conditions fueling mass protests, a fear underscored by the recent appointment of Hossein Taeb, known for past crackdowns, to lead the Basij militia.

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I had to lay off 10 employees. It was painful, but I had no choice. I could no longer afford to pay their salaries, and now I’m relying on my savings to support my family.