Iranian official rhetoric girds for war as US fleet nears

The warnings would mark a sharp uptick in rhetoric on Iraq by the administration of US President Donald Trump as it pursues its maximum pressure campaign of sanctions against its Mideast arch-nemesis Iran.

Citing three Iraqi officials and a source familiar with the matter, the news agency reported that US Charge d'Affaires in Baghdad Joshua Harris conveyed the warnings in conversations over the past two months with Iraqi officials from across its fractured political spectrum.

Iran relies closely on the banking sector its Western neighbor, where recent parliamentary polls kept Shi'ite Muslim parties in the ascendant and delivered gains for politicians from the kaleidoscope of militias and parties backed by Tehran.

The Islamic Republic's own economic lifeline of oil exports is under heavy pressure from US sanctions, even if export levels remain buoyant one year into Trump's second term, and Iraqi financial instruments help it skirt US curbs.

Following a 2003 US invasion, the United States has maintained de facto control over Iraqi oil revenues and its preponderant banking and financial puts the funds within its reach.

"The United States supports Iraqi sovereignty, and the sovereignty of every country in the region," Reuters quoted a US State Department spokesperson as saying in response to a request for comment. "That leaves absolutely no role for Iran-backed militias that pursue malign interests, cause sectarian division, and spread terrorism across the region."

US warnings also broached cutting off engagement with Baghdad if 58 members of parliament Washington views as linked to Iran are elevated by Prime Minister Shia al-Sudani to cabinet positions.

"The American line was basically that they would suspend engagement with the new government should any of those 58 MPs be represented in cabinet," Reuters quoted an Iraqi officials as saying.

"They said it meant they wouldn't deal with that government and would suspend dollar transfers," the source added.

Forming the new cabinet is due to take months and the US moves did not appear to be linked to a recent deadly crackdown on protestors in Iran, which resulted in new US sanctions on Iranian officials and oil shipping networks.

The protests initially erupted over a sharp spike in exchange rates but soon escalated into open calls for the overthrow of the Islamic Republic.

Many Iranians now say they personally know at least one or two people killed on January 8 or 9. Arrests and enforced disappearances—whose exact scale remains unknown—have also drawn countless families into the crisis, deepening fear and uncertainty.

According to people who have recently left Iran or managed to communicate via Starlink, businesses across the country are either closed or operating at minimal capacity, battered by currency turmoil and the prolonged internet shutdown.

On one side, customers have disappeared; on the other, sellers are reluctant to part with their goods.

Merchants say they cannot be sure they will be able to replace inventory amid exchange-rate volatility, turning even routine transactions into a gamble. Many now prefer not to sell at all.

Even before the unrest, businesses were under intense pressure.

Data published by the economic website Eco Iran show that bank lending from April to December rose 47 percent year-on-year. But 82 percent of loans to the productive sector went toward “working capital”—a sign that firms were borrowing not to expand, but simply to survive.

Shrinking purchasing power

Soon after the protests began, the government announced a plan to offset declining purchasing power following the removal of subsidized exchange rates for essential imports.

Under the plan, low- and middle-income individuals are to receive 10 million rials per month—about $7.50, roughly equivalent to one day’s wage for a construction worker.

Four months of payments were deposited at once, with recipients told they could spend one-quarter of the sum each month on 11 basic items, including rice, cooking oil, protein products, and dairy, at state-set prices in designated stores.

Prices for most of those goods in the open market have continued to surge, and some items have become scarce. Most readers responding to a poll by the news website Khabar Online said the subsidy was insufficient or ineffective.

One reader commented on the website that the handout offsets at most half the price increase for the 11 subsidized items, noting that rising food costs would also push up prices for everything from biscuits to restaurant meals, for which no compensation exists.

Many also fear the government will finance the program by printing money, further accelerating inflation, which official figures show had already surpassed 50 percent by December.

Cost of blackout

The nationwide internet shutdown, imposed on January 8 and still in place, has crippled hundreds of thousands of small and home-based businesses.

From home food producers to online language and music teachers, entire livelihoods have vanished overnight, with authorities offering no clear timeline for restoring connectivity.

These businesses relied almost entirely on online platforms for advertising and sales. Many were small producers in cities and even remote villages, selling handicrafts, agricultural goods, or homemade food directly to customers through Instagram.

Even before the shutdown, widespread filtering had forced them to pay for VPNs, further straining already fragile operations.

Kourosh, the manager of an advertising company who left Iran for Turkey after the January 8–9 killings, said all advertising activity had come to a halt.

“My clients have lost any hope of selling their products before the Iranian New Year, which is just two months away,” he told Iran International.

“People have no money, and even if they do, they won’t spend it on clothes, shoes, or home goods. Everyone was counting on sales in these final weeks of the year.”

Judicial authorities in Qom province last week announced the confiscation of all assets and bank accounts belonging to Mohammad Saeedinia, the founder of a popular cafe chain operating in several Iranian cities.

Saeedinia had been arrested a day earlier and officials linked the move to his alleged support for strikes and protests after he temporarily closed his cafés following calls for strikes and work stoppages.

State-affiliated Fars News reported that assets linked to Saeedinia—including cafe chains, a roadside complex and food-industry businesses—were valued at between 25 and 27 trillion rials ($17.5–19 million).

Prosecutors said similar cases had been opened against dozens of other cafes, as well as actors, athletes and signatories of protest statements, adding that some assets had already been seized to compensate for damage to public property.

No violent crime, financial fraud or national-security offense has been publicly substantiated in Saeedinia’s case. Instead, it illustrates how economic pressure has emerged as an element of state repression in a practice with a long pedigree.

Confiscation codified

From the earliest months after the 1979 revolution, confiscation was used not only to dismantle the ancien régime’s economic base, but to restructure ownership and concentrate power within institutions aligned with the new state.

In the chaotic post-revolutionary period, seizures were carried out in what amounted to a legal vacuum. Revolutionary courts and ad hoc committees confiscated property under broad ideological justifications, often before a coherent judicial framework existed.

Decrees issued by Ruhollah Khomeini concerning “ownerless” or “illegitimate” property created elastic categories through which private assets could be absorbed by revolutionary bodies.

Although framed as redistribution, these measures laid the economic foundations of new power centers.

Over time, confiscation was institutionalized through bodies such as the Foundation of the Oppressed and the Execution of Imam Khomeini’s Order, as well as through legal provisions including Article 49 of the constitution, which targets “illegitimate wealth” without defining the term.

Among the early and most consequential targets was Ahmad Khayami, a pioneer of Iran’s modern auto industry and co-founder of Iran National, later Iran Khodro. The seizure of his assets and removal of private control over the company marked a decisive break with Iran’s pre-revolutionary model of industrial entrepreneurship.

Another prominent case was Habib Sabet, an entrepreneur active in media, construction and commerce, and the founder of Iran’s first private television network. His assets were confiscated in the revolution’s aftermath, reflecting how independent capital—even without overt political involvement—was treated as incompatible with the new order.

Private sector hobbled

The execution of Habib Elghanian, a leading industrialist and head of Tehran’s Jewish community, sent a particularly chilling signal. After a summary revolutionary trial in 1979, his assets were seized and he was put to death, accelerating capital flight and underscoring the risks facing private enterprise in the new Islamic Republic.

The impact on Iran’s modern private sector was significant.

Entrepreneurs who had built manufacturing, retail and financial enterprises over decades were removed, their assets transferred to state or quasi-state structures. Many left the country.

Others were sidelined through prosecution or regulatory exclusion.

As revolutionary fervor faded, the practice evolved rather than disappeared. Highly publicized trials and executions gave way to asset freezes, license revocations and selective enforcement. Confiscation became less spectacular but more routine, embedded in administrative and judicial processes.

Recent protest cycles have again brought these mechanisms to the fore. Business closures, account seizures and professional bans have accompanied crackdowns, reinforcing the message that economic activity remains conditional on political compliance.

The seizure of Saeedinia’s assets fits squarely within this longer trajectory. It is not an isolated response to unrest, but part of a system in which control over property has, from the outset, served as a means of political management.

After the loss of longtime Russian allies Bashar al-Assad in Syria and Nicolas Maduro in Venezuela, the Kremlin can hardly wish to suffer further loss of an ally in Tehran.

Supreme Leader Ali Khamenei may yet remain in power—thanks partly to ongoing Russian-Iranian cooperation. But even if he does not, Vladimir Putin may still be able to salvage the situation.

Moscow, according to an analysis by the Carnegie Endowment, does not seem likely to intervene militarily in Iran to defend the Islamic Republic against its opponents. Russian forces, after all, are preoccupied with the war in Ukraine.

Yet, as detailed in an article in Foreign Policy, Moscow has long provided Tehran with electronic and other tools of repression. Since the Iranian demonstrators are not an armed opposition, Russian military intervention may not be needed to contain or suppress the unrest.

The situation might change, of course, if US president Donald Trump follows through on his threats to intervene in Iran. Both Tehran and Moscow want to avoid this. But how?

While Putin himself has been remarkably quiet about events in Iran, the one initiative Russia has engaged in so far is mediation between Iran and Israel. Both governments have reportedly conveyed to Moscow that neither will preemptively attack the other.

This Russian mediation effort may be highly important for protecting the Islamic Republic. Unlike just before and during the June 2025 twelve-day war—when Israeli Prime Minister Benjamin Netanyahu was urging the United States to join attacks on Iran—Netanyahu is now reportedly counseling restraint in Washington regarding military intervention.

While Israel has long opposed Iran’s acquisition of nuclear weapons, Netanyahu may prefer that a weakened Islamic Republic remain in power rather than be overthrown and replaced by either a more hostile regime, or one more closely aligned with the West in ways Israel cannot shape.

Netanyahu has already found himself at cross-purposes with Trump over Syria, where the United States has sought to cooperate with the new leadership under Ahmed al-Sharaa, while Israel views the government in Damascus as a threat.

Moscow’s coordination with Israel may therefore increase Putin’s ability to dissuade Trump from intervening in Iran.

For Moscow, the best outcome in the current crisis is that the Islamic Republic defeats its internal opponents and survives. But Russia may still retain significant influence and cooperation with Iran after a change in leadership—or even regime.

In Syria, Moscow has kept its naval and air bases despite the fall of Assad. In Venezuela, Russia has moved quickly to re-engage with the post-Maduro authorities, seeking to preserve economic and strategic ties despite a major political rupture.

If Khamenei falls but the Islamic Republic remains intact, Tehran is likely to continue cooperating with Russia despite any newfound willingness to work with the United States.

Even if the Islamic Republic collapses, its replacement will almost certainly continue to envision Iran as a regional great power.

A new Iranian government may pursue more cooperative relations with Washington while still seeking ties with Russia, China, and others—much as new leaderships elsewhere have attempted to diversify their external partnerships.

Moscow, for its part, will actively seek cooperation with any new authorities in Tehran to prevent Iran from becoming overly dependent on the West.

With regard to Ukraine, Putin has shown little flexibility, pressing ahead despite extraordinary human and financial costs. But when it comes to supporting anti-Western allies in the Global South, Moscow has been more pragmatic.

The demands of the war in Ukraine limit Russia’s ability to defend embattled partners elsewhere, while Putin’s long-standing efforts to cultivate relations with traditionally pro-Western governments have reduced the strategic necessity of rigid ideological allies.

It is undoubtedly embarrassing for Moscow to see longtime partners fall from power, but this is hardly unique to Russia—as the collapse of the Western-backed government in Afghanistan demonstrated.

Putin appears to understand that the downfall of any government in the Global South is typically followed by competition among outside powers for influence. This is not a moment to lament losses, but to adapt—to engage new leaders eager to keep their options open rather than rely on a single great-power patron.

Moscow’s preferred outcome in Iran remains the survival of the Islamic Republic and the continuation of close cooperation. But if leadership—or even regime—change occurs, Russia will move quickly to adjust.

If Putin’s success in retaining Russian bases in Syria despite backing the losing side is any guide, he may well succeed in doing so in Iran as well.

For more than a year, Iranian political analysts, sociologists and even establishment insiders had warned that mounting economic pressure and social exhaustion were pushing the country toward a nationwide rupture.

The state, unable or unwilling to pursue reform, appeared to place its faith instead in a familiar instrument: brute force.

When unrest finally broke out, it was met with an exceptionally violent crackdown that claimed thousands of lives. The predictions came true in the worst possible way.

‘Boiling point’

In October 2025, former labor minister and government spokesman Ali Rabiei wrote in the reformist daily Sharq that Iranians were “fed up with the government’s promises.” Without meaningful economic relief, he warned, the country risked sliding into civil unrest.

A month later, sociologist Taghi Azad Armaki described the situation as “critical,” calling for national dialogue rather than denial. Accumulated social dissatisfaction, he told the moderate daily Etemad, had pushed society to its “boiling point.”

Moderate commentator Abbas Abdi went further weeks later, writing in Etemad that Iranian society had reached “the point of no return.”

State-affiliated news agencies — including Revolutionary Guards-linked Fars — did highlight economic grievances, but largely downplayed the likelihood of widespread protest, framing any potential unrest as the work of foreign actors.

A crisis mapped in advance

The clearest articulation of what lay ahead came in late December 2025, just as protests were beginning to spread and foreign-exchange and gold prices were surging.

Writing for the reformist website Rouydad24, analyst Amir Dabiri Mehr argued that Iran’s fate now hinged almost entirely on how the government chose to respond. He outlined four possible scenarios, ranging from de-escalation to catastrophe.

In the first two — economic reform or restraint by security forces — the government would seek to calm public anger without violence. Dabiri Mehr treated both as increasingly unlikely. Events soon confirmed that assessment.

The third scenario, a violent crackdown, did unfold. Security forces suppressed protests across cities including Tehran, Mashhad, Isfahan and Rasht, temporarily silencing dissent through force.

Ignoring it all

Dabiri Mehr’s fourth scenario envisioned escalation: a severe crackdown combined with the portrayal of protesters as “enemies” or “foreign agents,” pushing unrest toward militarization and raising the risk of foreign intervention or broader confrontation.

He cautioned that a social media blackout would not contain anger but displace it — forcing dissent from online spaces into the streets and transforming economic frustration into a wider social movement. Repression alone, he warned at the time, would not resolve the crisis.

The tragedy now unfolding was foreseen not only by contemporary analysts but, metaphorically, by Iran’s own literary tradition.

In Ferdowsi’s Shahnameh, written a millennium ago, a line captures the logic of the present moment: When a man’s fortune darkens, he does everything he should not do.

The warnings were clear. The alternatives were understood. What followed was not inevitability, but choice—and its consequences are now unfolding.