Six months after the outbreak of war with the United States and Israel, Iran’s leadership has begun publicly acknowledging the scale of accumulated economic damage, as negotiations have reached a deadlock and the Trump administration has escalated its financial pressure under what it has branded “Economic Victory Day.”
Iranian President Masoud Pezeshkian confirmed that export and import activity has declined by approximately 35% due to U.S. sanctions and the naval blockade imposed on Iranian ports. The remarks, carried by state media, also noted that Tehran managed to sell nearly 90 million barrels of oil during the brief period when a temporary understanding with Washington prevailed in June, when the U.S. administration permitted Iranian oil sales.
In a subsequent television interview, Pezeshkian called for reviving the interim agreement signed on June 17, which quickly collapsed amid disputes over its provisions, particularly regarding the status of the Strait of Hormuz. He said his country is capable of resolving its problems and restoring its privileges through that memorandum of understanding, referring to a document that offered Iran immediate sanctions relief and the release of its frozen assets.
For his part, Supreme Leader Ayatollah Mojtaba Khamenei urged the government to seriously address a series of economic and livelihood challenges, including inflation, unemployment, price management, and the goods and services market. Mojtaba has not appeared publicly since he was injured in the initial attack on February 28 that killed his father, former Supreme Leader Ali Khamenei.
The Iranian government stated in an official communiqué that addressing economic pressures resulting from sanctions and war represents a top priority, encompassing curbing inflation, managing markets, creating jobs, directing investments toward domestic production, and gradually reducing reliance on the dollar.
External Pressure Without Full Escalation
Washington has warned countries against maintaining trade relations with Tehran, citing the risk of secondary sanctions. However, the U.S. Treasury Department has stopped short of imposing sanctions on Iran’s major trading partners such as China and India—a measure that could have triggered wide-ranging repercussions for both the U.S. and global economies.
The current wave of sanctions compounds the effects of the war on Iran’s economy, with annual inflation reaching 66% last month. Despite the pressure, Tehran has shown no signs of backing down, vowing to resist U.S. pressure and pursue a diplomatic track while emphasizing what it describes as its control over the Strait of Hormuz, the strategic shipping lane that grants it significant leverage through its ability to disrupt global energy markets.
A Faltering Negotiation Track
The collapse of the June interim agreement reflects the difficulty of finding common ground between the two sides, particularly regarding security and maritime arrangements in the Strait of Hormuz. While Tehran views the agreement as having offered an economic lifeline through lifting restrictions on its oil exports and releasing frozen assets, Washington insists on linking any sanctions relief to fundamental changes in Iran’s regional policy.
The continued negotiating stalemate places Iran’s economy before a dual-pressure scenario: the ongoing war’s impact on infrastructure and production, compounded by the accumulation of sanctions that limit the country’s access to global markets and international financing. In the absence of a diplomatic breakthrough, Tehran’s official priority appears set to focus on managing the crisis domestically through policies aimed at reducing inflation, supporting local production, and minimizing exposure to foreign currency fluctuations.