Iran acknowledges war's economic toll, vows diplomacy and defence

Iranian leaders said the six-month conflict with the United States has caused foreign trade to fall by roughly 35 percent, attributing the decline to U.S. sanctions and a naval blockade of Iranian ports. President Masoud Pezeshkian told state media the drop in exports and imports reflects the economic pressure, but noted that Iran still managed to sell about 90 million barrels of oil under a short-lived memorandum of understanding signed with Washington in June.

Supreme Leader Ayatollah Mojtaba Khamenei, who has not appeared publicly since the war began, issued a written statement urging the government to confront “the chain of economic and livelihood challenges, such as inflation, unemployment, management of prices and the market for goods and services.”

Annual inflation reached 66 percent in the latest month, and residents in Tehran reported rising living costs and job insecurity.

“Before the war, I didn’t work. Since the war, I’ve had to find a job to help support my household,” said a local resident named Maryam.

“We can barely afford to pay our workers,” said Omid, who runs a food business.

The government described diplomacy and defence as “two complementary, coordinated and inseparable wings” for protecting national interests, and said it would pursue both in a balanced manner. Pezeshkian called for dialogue with neighboring countries, emphasizing mutual respect, while the supreme leader appealed for domestic unity.

Qatari Prime Minister Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani met Iranian officials in Tehran, stressing the need to reopen shipping through the Strait of Hormuz. Iran’s foreign minister described the talks as “creative.”

In a separate statement, army commander-in-chief Amir Hatami said Iran’s drone and missile capabilities had been fired “with the utmost intensity until the last moment,” and acting defence minister Majid Ibn Reza warned that “surprises” would be revealed to adversaries in due time.