Tehran’s grocery stores are well stocked, but many families can barely afford the basics. Unemployment is rising and those with jobs are working longer hours for money worth half as much as a year ago, making food, medicine and everything else except heavily subsidized gasoline increasingly out of reach. “We’ve practically given up a lot of things,” said Ahmad Karimi, 52, a taxi driver and father of two who has been working 15 hours a day to make ends meet. “We are eliminating fruit, we are eliminating proteins, we have given up leisure and we even work on weekends.” A currency trader holds an Iranian rial in the Grand Bazaar in Tehran, Iran, amid sky-high inflation worsened by the ongoing war with the US, August 17, 2026. Majid Asgaripour/WANA Nearly six months into the war with the United States and Israel, the Iranian economy is taking a beating under the force of sanctions and a naval blockade that is making it extremely difficult for the country to export oil, its most valuable commodity. Since the war began, Iran has been attacking oil-rich neighbors and US bases in the region, and disrupting shipping in the Strait of Hormuz, its biggest strategic advantage. Iran is trying to use this retaliatory pressure (which raises global energy prices) to end the war on the best possible terms. It is pushing for sanctions to be lifted and seeking enough control over the strait to demand payments from ships passing through it to deliver energy and other goods. The Trump administration, fighting a waterway in a war launched to curb Iran’s nuclear program, is promising even tougher sanctions to force the Islamic Republic into submission. But experts say President Trump may be underestimating how long Iran can hold out. Iran has been subject to Western sanctions for years and has become adept at partially circumventing them. It has expanded domestic production, used informal cross-border trade networks, purchased restricted products through third countries, and used a shadow fleet to transport its oil. “Iran’s resilience not only prevents collapse, it also prevents economic pain from translating into the political pressure and changes that the United States expects,” said Hadi Kahalzadeh, an expert on Iran’s economy at Brandeis University.
