For many Iranians, the new US sanctions campaign, called Operation Economic Pariah, seems superfluous given their country’s bleak economic situation. Iranians face rampant food inflation, closed gas stations and a seemingly endless depreciation of the country’s currency caused by a lack of foreign reserves. Vegetable oil in Iran in August cost 383% more than a year ago. The price of eggs increased by 294%, that of chicken by 177% and red meat by 148%. The failing economy leaves the country’s political class in suspense as it tries to prevent economic conditions from leading to social chaos. Indeed, long before Donald Trump’s latest sanctions, Iran’s economy had become a parallel battlefield in which the country’s economic commanders struggled to maintain control. On August 23, the US dollar reached approximately 2 million rials on Iran’s open exchange. market, a new record.Three days later, Iran’s statistical center announced that year-on-year inflation in August reached 84.4%; the moving annual average rate was around 65%. As purchasing power in Iran collapses, households buy fewer goods. Diets are changing, clothes are mended and repaired rather than replaced, and medicines are in short supply, although they can be found on the hidden market. According to the Mehr news agency, demand for red meat fell by 50% in April 2026 compared to the same period last year. There has also been a jump in potato consumption, which has caused shortages. Basic commodities like eggs are now unaffordable for middle- and working-class families, Golshan Fathi, an Iranian feminist, said recently. “They don’t understand that people can no longer afford even a normal life.” Mohsen Zavaar, a biomedical engineer, said: “For a part of the population, the problem is no longer buying a house or a car; the problem is eliminating meat, reducing the quality of food, postponing medical treatment and surviving until the end of the month.” Frustrated by officials’ inability to address problems, he added: “People don’t want miracles, they want decisions.” and clothes. Long lines of cars stretched across parts of Tehran and the northeastern Iranian city of Mashhad on Tuesday and Wednesday as motorists queued for fuel, with some lines blocking entire streets. Many gas stations, including some of the largest, were closed. Drivers queue outside a gas station in Tehran on Tuesday. Photograph: Vahid Salemi/AP Officials blamed isolated panic buying caused by rumors of a planned government price increase, or by Israeli bombs that destroyed two of Tehran’s three main oil deposits. Within the government, anxious discussions have been going on for weeks about raising the price of oil to reduce costly subsidies, but the political class knows from past experience that there could be a significant setback. A sudden 50% increase in the price of gasoline in November 2019 sparked violent protests that lasted a week. Public anger has been exacerbated by the admission that vested interests in the government made the fight against fuel smuggling difficult. Saqab Esfahani, vice president of Iran’s president, said: “Both political factions in the country are involved in fuel smuggling, and if I shut down their operations, they would break my windows.” Pezeshkian, Iran’s president, has been urged to investigate the comments. Iran’s leaders have appealed to the public’s sense of patriotism as they try to weather the country’s economic crisis. Photograph: Abedin Taherkenareh/EPA However, transparency about economic conditions in Iran is likely to decline. Fatemeh Mohajerani, a spokesperson for the Iranian government, recently said that future poverty statistics would only be published with the permission of the country’s supreme national security council, making declining living standards akin to a classified state secret. Iran’s leaders now view the home front as part of the war against the United States. Hojatoleslam Taeb, the new head of the Basij paramilitary force and a close ally of Mojtaba Khamenei, Iran’s supreme leader, recently gave a speech that evoked an image of resistance against market forces distorted by US sanctions. As part of this war, he said it was necessary to reduce oil consumption by up to 10% to reduce the need for costly imports. Avoiding unnecessary travel would be an act of patriotism, he implied. But these patriotic appeals increasingly have an air of desperation as the economic crisis worsens. Mohsen Rezaei, the new and tougher secretary of the supreme national security council, said: “I advise young people to start producing in their homes the products that they and society need, just as they gather in public spaces.” Mohammad Taheri, editor of the economics magazine Tejarat Farda, said the advice reminded him of Mao’s “backyard steel furnaces” during the Great Leap Forward. Mao encouraged people to produce their own steel, with disastrous effects. Amirhossein Hashemi-Javid, an energy expert, said Iran’s real economic crisis was its inability to export oil because of the US blockade. “The channels for selling Iranian oil are drying up.”Oil that cannot reach customers from the well does not provide income to the Iranian economy; they are simply barrels that incur increasing costs of production, storage and risk every day,” he said. At some point, the Iranian government will have to decide whether it can achieve more through diplomacy than through continued confrontation. Just six months into a war, after Trump promised protesters in January that help was on the way, the only good the United States now offers Iranians is deeper poverty.
