Iran's moment of truth: will 2025 be the year of war or a nuclear deal?

Meanwhile, the return of Donald Trump to the White House and the revival of the US administration’s maximum pressure policy have further tightened the noose on Iran’s economy.

While the Central Bank reported a year-on-year inflation rate of 45% last month, local media suggest that actual price increases are far higher. In reality, the cost of food, medicine, and other essential goods has nearly doubled.

Moreover, the fiscal year is ended with the US dollar surging to nearly 1 million Iranian rials, marking a 65% increase since the beginning of the past fiscal year. The depreciation of the rial has accelerated sharply in recent days.

At the same time, Central Bank data reveals that Iran’s foreign reserves have been rapidly depleting, plunging to just one-fourth of their level in March 2024 and a mere tenth of their March 2023 levels.

Iran’s foreign trade situation:

The latest figures from the Central Bank show that Iran's foreign exchange revenue crisis persisted in the first half of the current fiscal year, which began on March 20, 2024. No data has yet been released for the second half of the year.

During this period, Iran recorded a positive overall trade balance of $11.5 billion, including oil, goods, and services. However, the country also experienced capital flight totaling $12.5 billion.

As a result, the net balance of foreign currency inflows and outflows—including gold bullion—turned negative.

Given the sharp decline in Iran’s oil exports to China since September, the situation is expected to worsen—particularly as oil, petroleum products, and natural gas account for more than half of the country’s total exports.

Over the first 11 months, Iran has imported approximately 93 tons of gold bullion worth $7.3 billion in exchange for its oil and goods exports—three times the amount imported in the previous year. More than 55% of this gold was purchased from Turkey.

Indeed, around 13% of Iran’s total oil and non-oil exports have been bartered for gold instead of foreign currency. This highlights the government’s inability to collect payments for exported goods and oil and transfer foreign currency into the country, due to US banking sanctions. As a result, Iran is facing a severe shortage of foreign exchange reserves.

Government debt crisis

Recent data from the Central Bank shows that the Iranian government’s debt to the banking system has surged by 41% during the current fiscal year. To cover its widening budget deficit, the government has relied heavily on borrowing from domestic banks, tapping into the National Development Fund, and issuing bonds.

According to the International Monetary Fund (IMF), Iran’s total government debt now exceeds $120 billion—roughly one-third of the country’s economy. In contrast, Iran’s total external debt, including both governmental and non-governmental liabilities, stands at less than $10 billion—just 2% of GDP—underscoring the country’s extreme financial isolation and the reluctance of international institutions to fund Iranian projects.

Two decades ago, before the imposition of heavy sanctions, Iran’s external debt was more than 12% of GDP, largely driven by foreign investment in oil and gas projects. Today, the government’s increasing dependence on domestic borrowing has sharply boosted liquidity, further fueling inflation. Over the past year alone, liquidity in Iran has risen by 28%.

The economic crisis has pushed more Iranians into poverty. Official reports suggest that one-third of the population lives in extreme poverty. However, based on the World Bank’s global poverty standards, around 80% of Iranian households earn less than $600 per month and fall below the poverty line.

Energy and Water Crisis

For the first time, Iran has experienced electricity and gas shortages across all seasons. During peak summer demand in 2024, electricity shortages reached 20%, while winter gas shortfalls surged to 25%. Officials warn that energy shortages could worsen by at least 5% in the next fiscal year.

Industrial reports show that since summer 2024, energy disruptions have forced 30–40% of Iran’s industrial capacity to shut down. At the same time, the country has been grappling with growing gasoline and diesel shortages since 2023. Without new refinery projects, these fuel deficits are expected to escalate rapidly.

Meanwhile, Iran’s water crisis has reached a critical stage. Tehran’s main reservoirs are reportedly at just 7% capacity, and officials warn of severe water shortages by summer 2025.

Peskov, speaking at a briefing with reporters, added that Moscow accepts Iran’s assurances that it has no intention of developing nuclear weapons.

"We are convinced that the problem of Iran's nuclear program should be resolved exclusively by peaceful political and diplomatic means, and we believe that everything necessary is available for this. All that is needed is political will," Peskov said.

The subject of Iran was among the key issues discussed during an extended phone conversation earlier this week between US President Donald Trump and Russian President Vladimir Putin. According to the White House, both leaders “shared the view that Iran should never be in a position to destroy Israel.”

Tensions between Tehran and Washington have escalated in recent weeks. US President Donald Trump said last week that Iran faces two paths: “military action, or a deal.” Iran’s leadership dismissed the ultimatum, with President Masoud Pezeshkian insisting Tehran "will not bow to US orders to talk."

Peskov's comments echoed statements he made last week, reaffirming that Iran has “every right to develop peaceful nuclear energy” and is “fulfilling its obligations under international agreements.” Speaking to reporters then, Peskov emphasized that Iran’s nuclear activities remain within legal frameworks established by international law. “We see that Iran is acting within these legal frameworks,” he said.

His comments also come as Iran, China, and Russia strengthen coordination on nuclear diplomacy, following trilateral talks in Beijing last week. In a joint statement issued after the meeting, the three countries emphasized the need to resolve the nuclear issue through dialogue based on mutual respect and condemned what they described as “unlawful” unilateral sanctions imposed on Iran.

“The right of Iran to the peaceful use of nuclear energy must be fully respected,” the statement read, calling for the lifting of all sanctions.

Led by deputy foreign ministers—Russia’s Sergei Ryabkov, Iran’s Kazem Gharibabadi, and China’s Ma Zhaoxu—the talks in Beijing signaled a unified stance against expanding the scope of nuclear negotiations. According to Gharibabadi, the three sides agreed that any future discussions must focus solely on Iran’s nuclear program and the removal of sanctions, explicitly rejecting the inclusion of Iran’s missile program or regional activities.

Foreign Minister Abbas Araghchi expressed cautious openness to indirect talks through Oman but warned that negotiating under maximum pressure would reflect “a position of weakness.”

Meanwhile, concerns over Iran’s nuclear activities have grown. The International Atomic Energy Agency (IAEA) reported that Iran has significantly ramped up uranium enrichment, nearing weapons-grade levels. Iran denies seeking nuclear weapons, saying the move is a response to continued US sanctions.

A second tremor, measuring 4.5 magnitude, followed just hours later at 1:03 PM local time, according to the Iranian Seismological Center.

In response to concerns about the site’s safety, Behrouz Kamalvandi, the deputy head of Iran's Atomic Energy Organization, said the earthquakes had no impact on the Natanz nuclear facility. “The Natanz nuclear site is designed to withstand earthquakes far more powerful than what occurred today,” he added.

Local officials reported shattered windows in several residential buildings across nearby villages, though no casualties have been reported so far.

The Natanz facility, mostly deep underground and central to Iran’s controversial nuclear program, has been the target of past sabotage. In July 2020, a blast at the centrifuge assembly plant at Natanz caused extensive damage, which Iranian officials later blamed on sabotage. Less than a year later, in April 2021, a second major incident struck the facility, again reportedly the result of sabotage, with Iran directly accusing Israel.

The 2021 attack came just after new advanced centrifuges had been activated, and US intelligence sources later told The New York Times that the strike destroyed the facility’s independent internal power system, delaying enrichment activities for months.

Last year, an Israeli airstrike targeted an S-300 air defense system near Esfahan, the same province housing Natanz—raising regional security concerns.

The quake comes at a delicate time, as US and Israeli officials prepare for high-level consultations in Washington next week to discuss Iran's nuclear program and potential diplomatic options. With tensions simmering, analysts warn that even natural events near sensitive sites could escalate geopolitical anxieties.

Natanz remains a flashpoint amid growing scrutiny from the International Atomic Energy Agency (IAEA), which recently expressed concern over Iran’s stockpile of near-weapons-grade uranium.

“Americans must know that threats will get them nowhere in confronting the Islamic Republic,” he said during a nationally broadcast speech in Tehran on Friday. “If anyone commits villainy against the Iranian people, they will be struck with a harsh slap.”

The remarks follow reports that US President Donald Trump sent Khamenei a direct letter earlier this month offering negotiations under a limited timeframe. According to Axios, the message included a two-month window to reach a new nuclear agreement, paired with a warning of consequences should Iran further expand its nuclear program.

The letter was described as firm in tone and was reportedly shared in advance with close US allies, including Israel, Saudi Arabia, and the United Arab Emirates.

Tehran has acknowledged receiving the letter, but has not commented publicly on its contents. The Iranian foreign ministry has criticized Washington’s approach, accusing the US of sending mixed signals, and said any official response would remain private.

While Khamenei has publicly ruled out negotiations under pressure, other officials have appeared more flexible. Last week, Iran’s Foreign Minister Abbas Araghchi suggested that indirect talks with the United States could be possible, potentially through intermediaries such as Oman.

“It is not a strange method, and it has happened repeatedly throughout history,” Araghchi said in an interview with the Iran newspaper. “What is important is the will to negotiate under fair and equal conditions; the form it takes does not matter.”

Khamenei, however, offered no acknowledgment of that possibility in his speech. “We have never been the ones to start a conflict,” he said. “But if someone acts with malice, the response will be firm.”

He also rejected Western descriptions of Iran’s role in the region, denying that Tehran relies on proxy forces. “The Islamic Republic has no need for proxies,” he said. “The people of Yemen and the resistance centers stand and fight on their own.”

The comments come as the US escalates military strikes on Yemen’s Houthi fighters, who have attacked shipping in the Red Sea in support of Gaza. Washington blames Tehran for arming the group with advanced weaponry.

This week, Trump demanded Iran end all Houthi support, warning of “dire” consequences. “Iran must stop the sending of these supplies IMMEDIATELY,” he posted on TruthSocial. Over the weekend and again Monday, US airstrikes hit Houthi positions, with Yemeni officials reporting dozens killed.

Despite denials from Tehran, US officials view the Houthis as a key pillar of Iran’s regional strategy.

Friday's speech came one day after Khamenei’s annual New Year message, in which he described the past year as turbulent, drawing comparisons to the early 1980s, a period marked by war, political assassinations, and deep internal crises. He cited the death of President Ebrahim Raisi, the killing of Iranian advisors in Damascus, and ongoing economic difficulties as major national challenges.

While neither speech referenced the US letter or the possibility of renewed nuclear talks, both struck a tone of resilience and resistance. The absence of traditional New Year greetings or Nowruz symbolism in either address underscored the gravity of the moment. This is the second consecutive year Khamenei has remained in the capital during Nowruz, a decision that may reflect the overlap with Ramadan, or broader concerns about regional security.

The timing of his remarks also comes as the United States and Israel prepare to hold high-level consultations in Washington early next week, focusing on Iran’s nuclear program and regional posture. Israeli officials have expressed skepticism about the prospects for diplomacy and are reportedly preparing for a range of scenarios, including potential military confrontation.

Meanwhile, international concern over Iran’s nuclear program continues to grow. A recent report by the International Atomic Energy Agency raised questions about the purpose of Iran’s enriched uranium stockpile, which the agency said could not be fully explained by civilian uses.

The charges against them included murder for hire, firearms possession, and conspiracy to commit money laundering.

The judge gave federal prosecutors one last chance to make a final statement to the jury before they made their final decision.

""It doesn't matter who she was or what she offered to this world. They only cared about money and power."

The jury received the case just before 1 p.m. on Thursday. The jury had initially asked for transcription material but while the attorneys were gathering materials, the jury sent another note saying that they had reached a verdict.

Alinejad was not in court on Thursday but was quoted by the Associated Press as saying she cried upon hearing the verdict.

“I am relieved that after nearly three years, the men who plotted to kill me have been found guilty. But make no mistake, the real masterminds of this crime are still in power in Iran,” she said.

On X, Alinejad called the guilty verdict a win for all the women of Iran against the Islamic Republic.

"I and the women of Iran have today won and you @khamenei_ir and your hated regime have lost!," she posted to X.

"For the first time, the regime of the Islamic Republic is being held accountable for bringing its campaign of terror to U.S. soil," Alinejad wrote, "This is just the beginning of exposing and dismantling its network of violence."

“This verdict should send a clear message around the world: if you target US citizens, we will find you, no matter where you are, and bring you to justice,” acting US attorney Matthew Podolsky said in a statement.

FBI Assistant Director in Charge Leslie R. Backschies said: “The convictions of Rafat Amirov and Polad Omarov send a clear message to all foreign governments who violate our laws and attempt to commit violence against Americans — they and their proxies will face justice for any attempt to silence Americans on US soil. The Iranian government’s shameless conduct and attempt to violate our laws and assassinate a critic of their human rights atrocities will not be tolerated.”

The verdict was announced at the Manhattan federal court following jury deliberations where on Tuesday Alinejad took to the stand recounting the chilling moment she came face-to-face with the man who had been sent to kill her.

"He was in the sunflowers staring straight into my eyes," she said, coming face to face with Khalid Mehdiyev, who admitted he intended to kill Alinejad at the behest of the Iranian government allegedly and testified against the two found guilty.

Prosecutors said the convicted men, Rafat Amirov and Polad Omarov, were crime bosses in the Russian mob. Their lawyers argued that they were innocent and trial evidence was flawed.

Mehdiyev, a member of the Thieves in Law gang said he received orders from the two to kill the journalist who uses her platform to expose the Islamic Republic’s repression.

As a government witness, who has made a deal with the Feds, Mehdiyev pleaded guilty to attempted murder and gun charges, but Omarav and Amirov stood trial.

The courtroom on 500 Pearl Street in Manhattan was frequented by supporters and friends of Alinejad, including Women Life Freedom protestors who had their eyes blinded by Iran's security forces at the height of the nationwide uprisings in 2022.