Iranian leadership has publicly acknowledged the severe economic toll resulting from six months of conflict with the United States. President Masoud Pezeshkian reported that the combination of international sanctions and a US-led naval blockade has caused a nearly 35 percent decline in the nation’s imports and exports.
Despite these pressures, the government has identified economic stabilization as a primary objective. Officials are prioritizing efforts to curb inflation—which reached 66 percent last month—while focusing on job creation and reducing the national economy’s reliance on the US dollar. Supreme Leader Ayatollah Mojtaba Khamenei, in his first public communication since the February 28 start of the war, issued a statement urging the government to address these livelihood challenges, specifically citing unemployment and market management.
The impact of the conflict is deeply felt by residents in Tehran. Maryam, a local worker, noted that the rising cost of living forced her into the workforce to support her household, while food business owner Omid reported that trade has stagnated under the weight of increasing rents and labor costs.
To navigate the crisis, the government has framed diplomacy and national defense as “two complementary, coordinated and inseparable wings.” Pezeshkian has advocated for a less confrontational approach toward neighboring countries, emphasizing regional equality. This diplomatic push included meetings in Tehran on Thursday between Iranian officials and Qatari Prime Minister Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani, where they discussed the necessity of restoring open shipping through the Strait of Hormuz. Foreign Minister Abbas Araghchi characterized the discussions as “creative.”
The administration also highlighted a brief period of economic relief during June, when a Memorandum of Understanding with Washington allowed for the sale of approximately 90 million barrels of Iranian oil.
Simultaneously, the military remains defiant. Army commander-in-chief Amir Hatami stated that despite enemy attempts to neutralize Iran’s missile and drone capabilities, the country’s stockpiles were utilized with maximum intensity. Acting Defence Minister Majid Ibn Reza added on Friday that the military has prepared “surprises” for its adversaries, warning that these developments will become apparent in due time. The report also notes that pledging to withstand US pressure, pursue diplomacy and maintain what it says is control over the Strait of Hormuz, the admissions came on Saturday as Tehran signalled it would not back down. The report also notes that including curbing inflation, creating jobs and gradually reducing dependence on the dollar, the government said addressing the economic fallout was now a central focus. The report also notes that he said Iran had nonetheless managed to sell about 90 million barrels of oil during the short-lived Memorandum of Understanding (MoU) signed with Washington in June, when oil sales were briefly permitted. The report also notes that who has not been seen publicly since the US and Israel launched the war on February 28 with an attack that killed his father, Ayatollah Ali Khamenei, called on the government to tackle the hardship, supreme Leader Ayatollah Mojtaba Khamenei. The report also notes that and residents in Tehran said the war had upended daily life, annual inflation hit 66 percent last month.
