US sanctions intensify Iran's worsening economic crisis

Iran's economy is under severe strain as the United States launched a new sanctions package dubbed Operation Economic Outcast. Inflation in August reached 84.4% year-on-year, while the rial fell to a record 2 million per dollar on the open market. Prices for basic foods have surged dramatically, with vegetable oil up 383%, eggs 294%, chicken 177% and red meat 148% compared with a year earlier.

Households are cutting back on meat, repairing clothing and delaying medical treatment. One biomedical engineer said, “For part of the population, the issue is no longer buying a house or a car; the issue is cutting out meat, reducing food quality, postponing medical treatment, and scraping by until the end of the month.”

Fuel shortages have led to long queues in Tehran and Mashhad after several petrol stations closed, a situation officials attribute to panic buying and damage to oil depots. Deputy presidential aide Saqab Esfahani warned that political factions are involved in fuel smuggling, adding, “If I were to shut down their operations, they would break my windows.”

The government has signaled that future poverty data will be released only with approval from the supreme national security council, effectively classifying the information. In response to the crisis, Basij leader Hojatoleslam Taeb urged citizens to cut petrol use by up to 10% as a patriotic measure, while security council secretary Mohsen Rezaei encouraged home production of essential goods.

Energy experts note that Iran's inability to export oil because of the U.S. blockade is a core driver of the downturn, saying the unsold barrels add production and storage costs without generating revenue. Analysts suggest that diplomatic engagement may become necessary if the economic situation continues to deteriorate.