Oil, gas and Iran economic analyst
Global oil prices have fallen back to around where they stood before the Iran war. But the decline reflects not a recovery in supply but a combination of emergency measures including strategic reserve releases, alternative export routes and, above all, weakening global demand.
According to the International Energy Agency (IEA), the massive supply shock triggered by disruptions in the Persian Gulf has been partially offset by excess oil production accumulated last year and in early 2026, emergency stock releases by industrialized countries, Saudi Arabia's and the UAE's use of export routes bypassing the Strait of Hormuz, and a sharp decline in global oil demand led by China.
The scale of the disruption remains enormous. Oil production across the Persian Gulf has fallen by more than 10 million barrels per day over recent months, resulting in a cumulative production loss of roughly 1.3 billion barrels.
At the same time, global oil demand contracted by about 5.5 million barrels per day in the second quarter of 2026 as economic activity slowed.
China, the world's largest crude importer, has reduced its oil imports by roughly 40 percent—or about 4.6 million barrels per day—over recent months, making weaker demand one of the biggest reasons prices have retreated.
Even so, the region's oil exports remain about 25 percent below their February levels, and restoring pre-war export capacity is likely to take many months. In some cases—particularly Qatar's damaged liquefied natural gas (LNG) facilities—a full recovery could take years.
Another temporary buffer has come from floating storage. Iran alone holds around 150 million barrels of crude at sea, while Washington's two-month waiver allowing Iranian oil exports has also helped ease market tensions.
Those inventories are helping cushion the supply shock, but they cannot replace the region's lost production capacity.
Meanwhile, production of crude oil and other petroleum liquids across the Persian Gulf region remains roughly 45 percent below February levels. Even Saudi Arabia—which can bypass the Strait of Hormuz through its East-West pipeline to the Red Sea—is producing well below pre-war levels, underscoring the scale of the disruption.
In total, the loss of roughly 1.3 billion barrels of production has only been partially offset by the release of more than 300 million barrels from the strategic reserves of industrialized countries.
Even under the most optimistic scenario, repairing the damage inflicted on global oil markets by the Strait of Hormuz crisis is unlikely before the middle of next year.
Geopolitical risks also remain elevated. Thursday's attack on a commercial vessel near Oman underscored how fragile maritime security remains despite the ceasefire. Shipping costs in waters south of Iran have risen to roughly 5.5 times their pre-war levels, while tanker charter rates have surged to nearly nine times their pre-war levels.
The disruption extends well beyond crude oil. Exports of petrochemicals, metals, fertilizers, helium and other raw materials from the Arab Gulf continue to face severe constraints, with implications for global industry, agriculture, supply chains and international trade.
Oil prices returning to the $72–74 range should therefore not be interpreted as evidence that the crisis has passed. They instead reflect a market being sustained by emergency inventories and demand destruction rather than recovering supply.
Until shipping through the Strait of Hormuz returns to normal and Persian Gulf production fully recovers, the global economy will remain vulnerable to renewed energy shocks and heightened market volatility.
Internet access in Iran was cut off for months, first amid the January protests and then during the March war, before being partially restored after an 88-day nationwide blackout.
International connectivity has returned for many fixed-line and home broadband users, but the network remains degraded, unstable and heavily censored.
More than 100 days after the broader shutdown began, the pattern of restoration has been limited, selective and tightly controlled.
From conditional access tied to identity verification and the migration of businesses to domestic platforms to the creation of internet-access whitelists, the Islamic Republic appears intent on preserving its multi-layered system of censorship, surveillance and communications control.
The National Information Network, centralized gateways to the global internet, controlled mobile-network settings, identity-verification systems and device-registration mechanisms are all tools that allow the state to restrict or cut off public access to the global internet while keeping stable communication channels open for selected groups.
That is why direct-to-cell, or D2C, has attracted growing attention among Iranians. Many see the promise of direct phone-to-satellite connectivity — without a dish, terminal, domestic operator or government gateway — as a possible way out of the Islamic Republic’s digital prison.
The idea has gained enough attention that the Pentagon held talks with SpaceX about activating direct-to-cell service for Iranian citizens. According to Reuters, SpaceX requested up to $500 million to launch the service and $100 million per month to operate it.
The central question, however, is whether current versions of direct-to-cell technology can meet such expectations on the scale of Iran. For now, the answer is no: today’s systems remain limited in capacity, vulnerable to radio interference and risky for users who could be identified through Iran’s device-registration and mobile-network systems.
The central questions, however, remain: Can current versions of Direct-to-Cell technology truly meet such expectations on the scale of Iran? Is the technology still only an emergency and limited communication channel, or can it become a scalable escape route for millions of Iranian users? And if future generations of the technology operate without relying on domestic towers and operators, will Iran’s digital wall be broken?
Dependency on mobile operators and the foreign eSIM scenario
In ordinary Starlink service, the satellite connects to a dedicated ground terminal — the same dish that users must obtain, install, maintain and hide from the Islamic Republic. The phone connects to the Starlink modem through Wi-Fi.
But Direct-to-Cell is based on a different idea: an ordinary phone itself becomes the receiver and transmitter for satellite communication.
Current versions of Direct-to-Cell are mostly not independent satellite internet systems. Rather, they complement the existing coverage of mobile operators in each area, effectively turning the satellite into a space-based cell tower whose real function is to cover mobile-network dead zones.
The use of independent S-Band frequencies and the deployment of satellites in very low Earth orbit, or VLEO, closer to the Earth’s surface, are among the paths that could make D2C more relevant to Iran’s problem.
Under this scenario, foreign Starlink partner operators such as T-Mobile, Kyivstar or One NZ in New Zealand would declare Iranian territory a zone without terrestrial coverage and include it under their own service.
Politically and technically, this model comes closer to what Iranian citizens expect from the technology. In that case, a phone using a SIM card or eSIM from one of these operators could establish a D2C connection from inside Iran to SpaceX’s new-generation satellites. Reports say about 700 satellites of this type are already in orbit.
But making this scenario a reality is not limited to SpaceX’s will or decision. It requires an entire chain: frequency spectrum, regulatory licenses, compatible phones, modems, antennas, transmission power and chipsets that support new satellite bands.
Companies such as Qualcomm, MediaTek, Apple, Samsung and Google play a decisive role in this process. If phone hardware is not ready, even an advanced satellite constellation will not become a practical connection for users inside Iran.
Even under this optimistic scenario for Iran, three major obstacles remain: limited capacity, the possibility of radio interference, and the risk of users being identified through device registration and the Hamta system.
1. Capacity limits in densely populated areas
The first serious obstacle to widespread D2C deployment in Iran is capacity. This connection is not designed to replace urban internet. It is designed to deliver minimal connectivity to areas with no terrestrial coverage or weak coverage. But in Iran, the issue is not simply connecting a few users on a road or in a mountain area.
The issue is a communications blackout in cities where hundreds of thousands of people may simultaneously need messaging apps, voice and video calls, news, maps, email, financial services, and the ability to send photos and videos.
In some early tests, recorded bandwidth for a single connection reached about 14 Mbps. But this number should not be confused with the experience of urban internet speeds. In the real world, that limited bandwidth must be shared among all users across the wide area covered by each satellite.
To better understand the scale, in a city such as Tehran, if only 1% of residents simultaneously wanted a very basic 1 Mbps connection, the network would need capacity equivalent to 99 Gbps. Compared with the current capacity of each active D2C beam, which ranges from 4 to 17 Mbps, and even compared with an optimistic 150 Mbps outlook for future generations, this reveals a gap hundreds of times larger than current capabilities.
2. Radio interference from ground signals
Even if D2C can reduce the problems of capacity and dependence on domestic operators, it still faces an obstacle rooted in the physics of radio waves. To connect, a phone must receive a very weak signal from a satellite moving hundreds of kilometers above the Earth, while operating in an environment filled with nearby mobile towers, ground transmitters and local signals that are far stronger.
In this context, the ratio between the desired signal and surrounding interference determines whether the receiver can detect the satellite signal at all amid noise and terrestrial interference.
A nearby ground tower operated by MCI or Irancell could emit a signal so much stronger than the satellite signal that the phone’s receiver effectively fails to see the weaker signal or cannot build a stable connection on it.
In such a situation, the government does not need to target the satellite. It only needs to use towers, transmitters and control over mobile-network power levels to make the radio environment around the user unfavorable for satellite connectivity.
For the Islamic Republic, this type of interference could be fast, local and low-cost. So even if the satellite is beyond the government’s reach, the user’s phone remains on the ground, inside a radio environment that can be manipulated. Future versions with dedicated spectrum, better modems and more resilient protocols may reduce part of this vulnerability, but they will not eliminate it entirely.
3. Device registration and user identification
The more serious security question is how identifiable a user inside Iran would be when using D2C. In Iran, a phone is not merely a communication device. The SIM card, subscriber identity, device identity and the user’s real identity are linked together across several layers.
Every phone has a unique hardware identifier, or IMEI, which serves as the device’s identity on mobile networks. The Hamta system can link this identifier to the SIM card, activation history, ownership and, in many cases, the user’s real identity.
In such an environment, using a foreign SIM card or eSIM for satellite connectivity does not necessarily make the user anonymous. If a phone with a known IMEI suddenly tries to connect through an unauthorized satellite route using a foreign operator identifier, that behavior could become an unusual and flaggable pattern.
The combination of device registration, operator data, SIM-card databases and local monitoring tools could turn such a connection into a security risk. The key question, therefore, is how this can be done without exposing the user’s identity, location and behavioral pattern.
A strategic opportunity, not an immediate solution
Direct-to-Cell should be taken seriously, but it should not be exaggerated. For Iran, the appeal of this technology is clear: if one day an ordinary phone can connect to a satellite without a dish, separate terminal, domestic operator or Islamic Republic gateway, one of the foundations of Iran’s internet-control architecture will be challenged. But that day has not yet arrived. Current versions under development are mainly designed to cover dead zones, not to replace urban internet for tens of millions of users.
Limited capacity, the possibility of interference, and the risk of exposing and identifying users mean this technology is not currently a public and scalable escape route from Iran’s internet shutdown. Its present value is mostly as an emergency tool: sending messages, sharing locations, issuing alerts or maintaining brief communication during a crisis.
The future could be different if the next generation of satellites brings together higher capacity, independent spectrum, compatible phones, user security and global protective rules. Until then, Direct-to-Cell remains an important opening for the future — not today’s solution to the digital prison.
The agreement could eventually unlock tens of billions of dollars in oil revenue and frozen assets while paving the way for a proposed $300 billion reconstruction program.
Much of that money would depend on further negotiations during a 60-day window, but analysts say the direction of US policy has already changed.
"If the MOU is acted upon based on what we've seen in the text... I fear that we are at risk of moving from maximum pressure to maximum appeasement," he told Eye for Iran.
Economist Mohamad Machine-Chian sees the same policy shift, though he describes it differently.
"To my understanding, it seems like the US administration has concluded it is moving toward a different paradigm," he said.
"Before that they were relying on sanctions and maximum pressure. Now they're trying to provide incentives and basically direct and control using incentives."
The economic package outlined in the MOU has three main components: expanded oil revenue, access to frozen Iranian assets and a proposed reconstruction and economic development plan worth at least $300 billion. Each would operate differently.
According to Meizlish, the biggest immediate change is Treasury's General License X.
The significance of the license, he says, goes far beyond allowing Iran to export oil. It authorizes much of the commercial activity surrounding those exports, including associated financial transactions.
That means Iran is not simply allowed to sell oil. It is allowed to receive and use the proceeds.
"We're talking about potentially tens of billions of dollars in a relatively short period of time," Meizlish said. "It's unconditioned, unrestricted sanctions relief that's going to provide billions of dollars to the regime."
According to Meizlish, the license appears to contain no escrow mechanism or reporting requirements, distinguishing it from previous arrangements in which unfrozen Iranian assets were held in restricted accounts and designated for humanitarian purposes.
Frozen assets
Separate from oil revenue are Iran's frozen assets.
The MOU states that those funds would be made available under procedures to be negotiated during the 60-day talks.
The Trump administration has suggested released assets could be used to purchase humanitarian goods, including American agricultural products.
But Machine-Chian says there is no practical way to guarantee those goods ultimately benefit ordinary Iranians.
"I don't think there's any way to make sure it actually reaches ordinary Iranians," he said.
Even if wheat, medicine or other humanitarian supplies are purchased, he said, Washington has little control over how they are distributed once inside Iran.
The reconstruction fund
The agreement also proposes developing a reconstruction and economic development plan worth at least $300 billion with regional partners.
Exactly how the fund would operate remains unclear. President Donald Trump has repeatedly said US taxpayers would not finance reconstruction, while administration officials have suggested Persian Gulf partners and private investment could provide much of the funding if a final agreement is reached.
Unlike oil revenue, however, the reconstruction plan remains largely conceptual and would require further agreements before any large-scale investment materializes.
Have sanctions really disappeared?
Not entirely.
Machine-Chian cautioned that sanctions relief alone would not fully reconnect Iran to the global economy.
Iranian banks remain largely cut off from the international financial system, and restoring normal banking ties would likely require Tehran to comply with standards set by the Financial Action Task Force (FATF), a politically contentious step that hardline factions have long resisted.
As a result, sanctions relief alone is unlikely to normalize Iran's banking sector.
Who benefits?
The central debate surrounding the agreement is not simply how much money Iran could receive but who ultimately controls it.
Machine-Chian argues Iran's Central Bank is under severe pressure from inflation, a weakening rial and dwindling foreign exchange reserves. Fresh access to foreign currency, he says, could help stabilize the economy and prevent a deeper financial crisis.
"In that regard, these funds are going to help the Islamic Republic immensely," he said.
Whether that ultimately improves life for ordinary Iranians, however, remains uncertain.
Meizlish warns that fresh revenue could help rebuild military infrastructure damaged during the war while flowing into sectors such as oil, construction and petrochemicals, which he argues are deeply connected to the Islamic Revolutionary Guard Corps (IRGC).
"So what has Iran actually done?" Meizlish asked, arguing that reopening the Strait of Hormuz and agreeing to continue negotiations fall well short of the scale of economic relief now being offered.
Whether the strategy succeeds will depend less on the size of the promised economic package than on whether Washington can convert financial incentives into lasting nuclear concessions.
For now, the agreement represents a clear break from the sanctions-first approach that has defined US policy toward Iran for much of the past decade.
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