Iranian officials split over war's economic toll as hardliners retain influence
Iranian policymakers remain divided, with economy-focused officials urging an end to the conflict, while hardline factions continue to reject concessions despite mounting economic pressure.
Economic sanctions have not shifted the stance of Iran's hardline leaders, who continue to oppose any concessions in negotiations, according to a recent analysis. At the same time, a group of officials responsible for managing the economy – described as “realists” – warned that worsening economic conditions could threaten regime stability and openly advocated ending the war to reduce costs.
President Masoud Pezeshkian told reporters on August 21 that "it would be better to end it now," while acknowledging that Iranians must endure ongoing hardship. Parliament Speaker Mohammad Bagher Ghalibaf warned that the country cannot survive if its population faces hunger and a lack of financial circulation, regardless of military strength. Central Bank Governor Abdol Nasser Hemmati noted on August 19 that oil exports have nearly ceased and that Iran faces foreign-exchange shortages, reconstruction costs and rising youth unemployment.
These “realist” officials, who are accountable to the electorate, appear more likely than hardline figures such as IRGC Commander Major General Ahmad Vahidi to view economic deterioration as a reason to change policy. However, their ability to shift Iran’s overall strategy remains limited. The analysis notes that Vahidi’s faction continues to guide negotiation policy, favoring maximalist demands that include lifting the naval blockade, withdrawing U.S. forces, paying reparations and maintaining control of the Strait.
The collapse of a U.S.–Iran memorandum of understanding in June weakened the pro-concession camp. While Pezeshkian had previously secured the Supreme Leader’s approval for the agreement by emphasizing the economic impact of the blockade, officials now blame U.S. subversion for its failure. Hardline media outlets have criticized calls to end the war as signs of weakness.
The assessment concludes that Iran’s decision-making may take considerable time to respond to worsening economic conditions. Hardline officials appear willing to tolerate domestic unrest and economic pain to achieve their core objectives, whereas the pro-concession group seeks a negotiated settlement to alleviate economic strain.