Iran sentences another athlete to death over January protests

Hojattollah Mirzaei, an economics professor at Allameh Tabataba'i University and former head of the country’s retirement funds, shed light on the compounding crisis at a panel hosted by Donya-e-Eqtesad newspaper.

He said rising exchange rates, import restrictions, higher transportation costs, intensifying inflationary expectations, internet shutdowns and government financial deficits are driving up unemployment and eroding household purchasing power.

According to Mirzaei, an additional 3.5 million to 4.5 million people are expected to fall into poverty this year alone due to the economic fallout from the March war.

The cost-of-living crisis and the inflationary spiral

The macroeconomic pressure is being felt most sharply in household expenses.

The Central Bank of Iran reported an annual inflation rate of more than 50.6% in April. According to the same report, monthly inflation spiked to 67%.

Prices of some goods and services rose by up to 100% during the same period, vastly outpacing stagnant wage growth.

Prominent economist Masoud Nili warned that even if military tensions ease, economic conditions will not easily return to normal.

“The greatest current danger to Iran’s economy is being caught in an escalating inflationary spiral,” Nili said, calling it “a path that becomes increasingly difficult to control the further it goes.”

Market paralysis and the rise of the working poor

The inflationary pressure is coinciding with severe economic contraction.

Mirzaei projected that Iran’s economy will shrink by 8.8% to 10% in the current Iranian year, adding that even the 10% forecast may be optimistic.

The downturn has also frozen the labor market.

Hossein Rajabpour, head of the Saba Research Institute, said job creation has sharply declined, with the industrial sector suffering the heaviest losses following the recent conflict.

The crisis has also changed the profile of poverty in Iran. Social policy researcher Kowsar Yousefi said a significant share of those who are employed still live below the poverty line.

Frozen assets and the limits of a short-term fix

To ease the acute economic pressure, Iran is pushing for the release of roughly $24 billion in assets frozen in foreign banks.

Tehran hopes access to those funds could help stabilize the currency market, lower inflationary expectations and reduce the cost of importing basic goods and raw materials. Iranian officials have said “meaningful negotiations will not begin without the release of these assets.”

But economists warn that such cash injections would offer only temporary relief.

While access to foreign exchange reserves could help exchange rates, inflation and short-term growth, deeper structural problems would remain.

Iran is also hoping that a deal with Washington will end the blockade that has severely restricted its access to oil revenues in recent months, leaving 60 million barrels worth $6 billion stranded on tankers, according to TankerTrackers.

Even if a deal resolves those issues and sanctions are lifted, chronic weakness in domestic and foreign investment would continue to weigh heavily on the economy.

That vulnerability is reflected in global resilience data. According to a business environment resilience index compiled by Factory Mutual Insurance Company, which evaluates how effectively 130 countries withstand and recover from economic shocks, Iran ranks near the bottom at 125th.

The ranking stands in sharp contrast to regional peers such as Qatar and Saudi Arabia, both of which are among the world’s top 50 most resilient economies.

Iran’s Khatam al-Anbiya Central Headquarters warned on Saturday that all commercial ships and oil tankers must use designated routes in the Strait of Hormuz and obtain permission from the IRGC Navy, threatening both non-compliant vessels and foreign military intervention.

The headquarters, Iran’s central wartime command body, said in a statement that due to what it called the “integrated nature” of the Strait of Hormuz route, all ships, commercial vessels and oil tankers are required to travel only through designated lanes and receive authorization from the Islamic Revolutionary Guard Corps Navy.

“Any violation of these regulations will seriously endanger the security of their passage,” the statement said.

The command also warned that any action by military vessels to interfere in the management of the Strait of Hormuz or disrupt maritime traffic would be targeted by the armed forces of the Islamic Republic.

The Iran war left the Islamic Republic weaker than it had been in years. The question now is whether Washington will turn that weakness into leverage – or give Tehran room to recover through a new deal.

That debate is becoming increasingly urgent as Washington and Tehran move closer to a potential agreement that could extend the current ceasefire and launch a new phase of negotiations over Iran’s nuclear program.

President Donald Trump has suggested a deal may be within reach, while officials on both sides have signaled progress despite major unresolved disputes.

For supporters of the military campaign, the logic is straightforward: Iran entered the talks weaker than it has been in years. For critics, the concern is that diplomacy could give Tehran breathing room just as years of economic pressure, domestic unrest and military setbacks had left it vulnerable.

Speaking to Eye for Iran, former US Treasury official Miad Maleki and national security expert Thomas Juneau offered different answers to the same question: what exactly did the war achieve?

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US War Secretary Pete Hegseth said the naval blockade on Iran remains in place and warned Tehran that Washington is ready to use military force again if diplomacy fails to produce a deal preventing Iran from obtaining a nuclear weapon.

“The blockade is very much still in place,” Hegseth said in Singapore, adding that the Strait of Hormuz had come up repeatedly in talks with US partners.

He said any eventual outcome, whether through agreement or continued pressure, must leave the Strait of Hormuz open and free of tolls.

“Once a deal is had or not, depending on the choice they make, it will be an open strait, a toll-free strait that the entire world can use, which is the way that it should be,” Hegseth said.

Hegseth said Iran claims to control the waterway, but argued that US military pressure had shaped the negotiating dynamics.

“They want to say that they control the Strait, but we do,” he said. “Everything behind the scenes shows that we are in control when it comes to that, including how the dynamics of the negotiation are coming together.”

On the nuclear talks, Hegseth said President Donald Trump’s position had not changed and that any deal must ensure Iran never obtains a nuclear weapon.

“The goalposts haven’t shifted at all,” he said, adding that Iran knew “very, very clearly” what Washington expected from the negotiations.

“We think we’re in a good place to make that deal,” Hegseth said. “Or they can deal with the War Department. And we are prepared. We’re postured even stronger today than we were on day one to address it that way if we have to.”

Hegseth also said the United States remained focused on strengthening its defense industrial base, including production of air defense missiles, Tomahawks and other munitions, while investing in drone capabilities.

An Iranian lawmaker said parliament will soon approve a bill to formalize what he described as the Islamic Republic’s management and sovereignty over the Strait of Hormuz.

Alireza Salimi, a member of parliament’s presiding board, told ISNA that the bill on “exercising the Islamic Republic’s management and sovereignty over the Strait of Hormuz” would soon be passed and become law.

He said the entire Strait of Hormuz lies within the territorial waters of Iran and Oman, and that only those two countries should decide how it is managed.