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Ending Iran war could expose regime to its greatest threat yet, experts say

Negar Mojtahedi
Negar Mojtahedi

Iran International

Aug 7, 2026, 22:08 GMT+1
Iran's President Masoud Pezeshkian (left), Parliament Speaker M.B. Ghalibaf, and Judiciary Chief Mohseni-Ejei attend a funeral ceremony for slain Supreme Leader Ali Khamenei in July 2026.
Iran's President Masoud Pezeshkian (left), Parliament Speaker M.B. Ghalibaf, and Judiciary Chief Mohseni-Ejei attend a funeral ceremony for slain Supreme Leader Ali Khamenei in July 2026.

Ending the Iran war could expose the Islamic Republic to one of its greatest vulnerabilities, experts say, as Tehran confronts a battered post-war economy that may strain its ability to finance the institutions underpinning its rule.

From a strictly economic perspective, former US Treasury official and sanctions strategist Miad Maleki says the greater danger to the regime may emerge once the fighting stops and it must govern a country burdened by soaring inflation, reconstruction costs and years of economic decline.

"If the conflict ends today, then you're going to see the economic effect of the war doing its work," Maleki told Eye for Iran.

"That would be very scary if I was an Iranian regime official, having to face the reality of a post-war economy."

Maleki argues Iran is already inside what he describes as a "tipping zone," where years of inflation, currency depreciation and economic mismanagement have steadily eroded purchasing power.

The question, he says, is no longer simply whether the government can continue paying salaries, but whether those salaries still buy enough to sustain loyalty.

"The salary might keep coming," he said. "You just won't be able to afford very basic needs."

The scale of that pressure is reflected in official consumer-price data.

In June, food and non-alcoholic beverage prices were nearly 134% higher than a year earlier, while prices for oils and fats rose about 278% and meat about 172%, according to data from the Statistical Center of Iran.

Those increases squeeze not only ordinary households, counterterrorism and security specialist Roger Macmillan argues, but also lower-ranking members of the Basij, IRGC conscripts and their families—people drawn from the same society on which the state relies to maintain internal security and suppress dissent.

"The real question isn't how much damage a bomb can do," he said. "It's what happens when the money stops moving."

Iran's financial center of gravity

Military pressure has dominated discussion of Iran for months, with much of the debate centered on missile stockpiles, drone production and how long it might take Tehran to rebuild its military capabilities.

Macmillan argues that focus overlooks something more fundamental.

"They are built to absorb military pressure," he said. "But are they able to absorb payroll pressure?"

His argument is not that economic pressure alone will weaken the regime. Rather, he says policymakers should focus on disrupting the broader financial ecosystem that allows the Islamic Republic to function, from government payrolls to military-linked economic networks.

"We need to be looking at the financial center of gravity, which is not just the payroll but also the military bonyads," he said.

Bonyads are powerful quasi-official foundations that expanded after the 1979 Islamic Revolution, with some of the largest developing extensive holdings in sectors including banking, construction, manufacturing, agriculture and energy.

Major foundations enjoy significant economic privileges and limited public oversight, and several are overseen by or closely connected to institutions under the Supreme Leader.

Some have also served as important patronage networks and maintained extensive economic links with Iran's political and security establishment.

For Macmillan, the question is not simply how much revenue those networks generate. It is whether they can continue supporting rank-and-file security forces if inflation keeps eroding wages while the government takes on the additional burden of rebuilding a post-war economy.

"What we need to look at is how we can remove the will, shatter the cohesion and the will of the foot soldiers from the Basij and from the IRGC, and separate them from the state," he said.

The argument represents a different way of thinking about pressure on Iran.

Rather than asking only how much military capability can be destroyed, Macmillan and Maleki argue policymakers should also consider how much financial strain the Islamic Republic can absorb before maintaining the institutions that enforce its rule becomes increasingly difficult.

Peace itself could reduce some war-related economic pressures, particularly if it improves trade conditions or is accompanied by sanctions relief. But Maleki argues it would also force Tehran to confront accumulated economic problems while meeting the costs of reconstruction.

For him, that may be precisely where the regime is most vulnerable.

"The most punishing thing they can do to this regime is send it back to govern Iran in a state of peace and face the reality they had to kill their way out of," Maleki said.

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US imposes new Iran sanctions as officials say Hormuz deal is near

Aug 7, 2026, 21:49 GMT+1
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The Wasp-class amphibious assault ship USS Kearsarge (LHD 3) transits the Strait of Hormuz.

The United States imposed fresh sanctions targeting Iran’s financial networks Friday even as US officials said progress had been made toward a deal with Tehran over the Strait of Hormuz and it could be clinched as early as the weekend.

The US Treasury targeted currency exchange houses, shell companies and financial facilitators that Washington said helped Iran move hundreds of millions of dollars through the international financial system.

The State Department said the measures targeted networks Iran used to access oil revenue, evade sanctions and move funds through front companies.

It added that the new sanctions were intended “to cut the financial lifelines that sustain Iran’s ruling elite.”

The statement said Washington would continue targeting banks, exchange houses and other facilitators it says Iran uses to move funds and evade sanctions.

Despite the new sanctions, US officials insist that progress has been made in talks over the Strait of Hormuz.

There has been progress between Oman and Iran over the strait and a deal is expected soon, Reuters reported Friday, citing a US official.

The official said the US would lift its blockade of Iranian ports once an agreement was announced to restore commercial shipping through the strait without impediments.

Bessent says ceasefire could come soon

US Treasury Secretary Scott Bessent separately said a 30- to 60-day ceasefire agreement with Iran could come “shortly, maybe even today, tomorrow,” adding that a deal could reopen the Strait of Hormuz and bring energy prices down.

Bessent also said the strait would “never” return to the way it was, saying Iran had used or tried to use it as a choke point.

“What we are going to see over the next two years, the strait is going to become irrelevant. It is going to become just another body of water,” Bessent said.

He added that “more than 50 or 70%” of the energy currently moving through the strait would instead go through underground pipelines.

Earlier Oman proposal

The latest progress follows weeks of talks between Iran and Oman over a new arrangement for commercial shipping through the Strait of Hormuz.

Iran had earlier rejected an Omani proposal for a 50-50 arrangement dividing the inbound and outbound routes between the two sides, saying it did not sufficiently address Tehran’s security concerns.

Tehran instead proposed that one shipping lane run entirely through Iranian territorial waters and part of the other also pass through Iranian waters, allowing Iran to maintain oversight over traffic in both directions.

US actions would remain performance-based and tied to Iran’s implementation of its commitments, the US official told Reuters.

US miscalculated Iran’s resilience and hurt deal prospects, expert says

Aug 7, 2026, 20:25 GMT+1
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Kambiz Tavana
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Paul J. Saunders, President and CEO, Center for the National Interest

Washington likely underestimated Iran’s ability to withstand the initial US-Israeli strikes, making a negotiated settlement harder to achieve and deepening mistrust, foreign-policy expert Paul Saunders told Iran International.

The United States appeared to believe that military force would quickly weaken the Iranian government and compel Tehran to accept an agreement closer to US terms, Paul Saunders, president and CEO of the Center for the National Interest, said in an interview in Washington DC.

“I think the administration probably … overestimated how easy it would be to use force to bring about a successful agreement,” Saunders said.

Washington and Tehran remain divided over efforts to end the conflict, with the Strait of Hormuz at the center of competing military and diplomatic calculations. Recent reports have offered conflicting accounts of whether an agreement to reopen the waterway is imminent.

Strikes complicated diplomacy

“Targeting Iran’s leadership did more than escalate the military campaign,” Saunders said. “It also posed a direct threat to the survival of the Islamic Republic, making it harder for Washington to persuade Tehran to compromise.”

“I think that, from my point of view, it would have been better not to execute the strike on the Iranian leadership,” Saunders said, adding that the decision increased mistrust and left Washington in a weaker position to negotiate after the initial military action.

The US-Iran Memorandum of Understanding, signed in June, was a 14-point interim framework to end hostilities, restore commercial passage through the Strait of Hormuz, remove the US naval blockade and negotiate a final agreement within 60 days.

In July, Iran suspended implementation of its commitments under the MoU, accusing Washington of effectively abandoning its own obligations.

“In order to get a deal, we needed to have a government to negotiate with,” Saunders said. “When that government is really damaged and destabilized … will that new regime be sufficiently powerful that it will be able to make concessions to the United States?”

Trump has described Iran as being under a “third regime,” arguing that successive layers of the country’s leadership were killed in US and Israeli strikes and that the officials now in charge were different and more reasonable than their predecessors.

Iran’s internal response

Saunders said the political effects of the war extended beyond negotiations to Iran’s domestic response. He said it was predictable that Iranian society would rally behind the state when facing an external attack, even if many people remained unhappy with their government.

“Regardless of how angry or frustrated people might be with their own government, the only thing that they actually want less than their own government interfering in their lives … is someone else’s government doing it,” Saunders said.

“The Iranian government is responding to a threat to its survival, while Iranian society is reacting to an external attack. At the same time, the US president and the American public are weighing how much risk and cost the conflict justifies,” he added.

The conflict is important to Washington but not existential for the United States, Saunders said. He added that the administration had shown sensitivity to growing public concern over the costs of continuing the campaign.

Hormuz remains central

The Strait of Hormuz remains central to Iran’s leverage and to efforts to end the conflict. Commercial traffic through the waterway has fallen sharply, while Iran is also bearing substantial economic costs from the disruption.

Saunders said traders had so far expected the strait to reopen, limiting the immediate impact on global oil prices. But he warned that the economic consequences could become far more serious if the disruption persisted and refiners were forced to adapt to reduced supplies.

What the Pentagon learned from the Iran war

Aug 7, 2026, 19:45 GMT+1
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Mehdi Beigi
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An F/A-18F Super Hornet, assigned to Strike Fighter Squadron (VFA) 41, prepares to make an arrested landing on the flight deck of the US Navy Nimitz-class aircraft carrier USS Abraham Lincoln in the Pacific.

President Donald Trump's latest order to investigate leaks about US munitions stockpiles may look like another dispute between the White House and the American media. In Tehran, it is being read as vindication.

Iran's military and state media have spent months portraying the depletion of American interceptors and precision weapons as evidence of a newfound way to impose costs on a vastly more powerful military.

The United States has not run out of weapons, and the Pentagon does not disclose exact inventories. But beneath the propaganda is a real strategic argument.

Iran does not need to match the United States missile for missile. It needs to make the United States expend expensive, slow-to-replace weapons at a rate that becomes difficult to sustain.

Washington increasingly appears to be treating that challenge as an industrial problem, not simply a battlefield one.

Tehran is not hiding the calculation

The clearest evidence comes from the IRGC itself. In a July 23 statement announcing an attack on a US base in Kuwait, the Revolutionary Guards said they would not allow Washington to use what they called "deceptive ceasefires" to replenish its oil and munitions stockpiles before resuming attacks.

The IRGC was not simply claiming to have damaged American forces. It was identifying the time required to replenish US stocks as a factor in how Iran viewed ceasefires and the continuation of the war.

On March 10, IRGC spokesman Ali Mohammad Naeini told American officials that Iran knew their ammunition stocks were being depleted. In April, Aerospace Force commander Majid Mousavi claimed Iran was replenishing its missile and drone capacity faster than the United States could replace weapons sent to the region.

Those statements cannot establish the actual condition of either country's arsenal. They do, however, show that Iranian commanders are treating ammunition consumption as part of the strategic contest.

On July 26, the hardline daily Kayhan ran a report referring to the "running dry" of Pentagon weapons stocks, using American media reports to challenge Washington's claims of overwhelming military power. Tasnim has similarly highlighted estimates of depleted Patriot, THAAD, Tomahawk and other missile inventories.

The claims are propagandistic, but they take aim at a genuine vulnerability.

Iran's advantage

Iran's military model was shaped partly by necessity. A May 13 analysis by the Carnegie Endowment traced Tehran's emphasis on ballistic missiles and drones to decades of sanctions and restricted access to Western military technology.

Rather than attempting to recreate an American-style force built around advanced aircraft and expensive precision systems, Iran invested heavily in weapons it could manufacture domestically and deploy in large numbers.

Carnegie cited estimates putting the cost of a Shahed-136 drone at roughly $20,000 to $50,000. Iranian ballistic missiles are substantially more expensive—roughly $1 million to $2 million by some estimates—but can still cost far less than the defensive systems used against them.

That does not mean a $30,000 drone automatically forces the launch of a multimillion-dollar Patriot interceptor. Air defense is layered. Fighters, guns, electronic warfare and cheaper interceptors can also be used.

Iran can also threaten an array of military and energy targets across the region with weapons flying at different speeds and altitudes. The defender must keep radars active, aircraft airborne and sufficient interceptors available for the threats that matter most.

Iran therefore does not have to win every exchange. It can fail to penetrate most defenses and still impose costs through volume, persistence and geography. That is the part of Iran's approach that an inventory count alone misses.

Politically sensitive numbers

Reuters reported on August 4, citing three people familiar with US military data, that the Army had consumed much of its stock of long-range ground-launched precision missiles during five months of war. Two sources said "virtually all" available ATACMS and Precision Strike Missiles had been used.

The Pentagon has not confirmed those numbers.

Three days later, The Wall Street Journal reported that Trump had ordered investigations into leaks about US munitions stockpiles. According to the report, the administration is seeking $52.9 billion for munitions and another $21 billion specifically to replace stocks depleted during the Iran war.

Trump publicly insists the United States retains "massive" quantities of ammunition. The two positions are not necessarily contradictory. The US military can have enough ammunition to continue current operations while simultaneously concluding that its inventories and production rates are inadequate for another major war.

That matters because Iran is not the Pentagon's only concern, and a potential conflict with China would place vastly greater demands on US stocks.

Future problems

The United States has spent years preparing for the possibility of conflict in the Indo-Pacific while simultaneously supplying Ukraine and maintaining commitments in Europe and the Middle East.

Every Patriot interceptor, Tomahawk or long-range precision missile used against Iran is therefore part of a larger calculation: What remains available if another crisis begins before the first one ends?

That is why the most revealing evidence is not the disputed number of missiles left in storage. It is what Washington is doing to its factories.

On January 6, the Pentagon announced a seven-year agreement aimed at increasing the annual production capacity of the PAC-3 MSE Patriot interceptor from roughly 600 to as many as 2,000.

On July 27, L3Harris announced agreements designed to nearly triple production of propulsion components for PAC-3 and quadruple propulsion production for THAAD. The Pentagon has also brought new suppliers into missile production and launched a program for lower-cost, air-launched cruise missiles that can be manufactured at greater scale.

These are not signs that American military power has collapsed. They are signs that the Pentagon believes industrial capacity itself has become a weapon.

The bigger picture

Iranian state media have turned the US stockpile debate into evidence that Washington has been defeated. That conclusion goes beyond what the public evidence supports.

The United States retains enormous military advantages in intelligence, air power, logistics, precision strike and global deployment. Iran has also suffered severe military, economic and human losses during the war.

But Tehran does appear to have demonstrated something narrower and strategically significant. A weaker state does not necessarily have to compete with America's most advanced technology. It can attack the economics and tempo behind that technology.

Michael Duffey, the Pentagon official responsible for acquisition and sustainment, recently described the shift in American thinking in unusually direct terms. For decades, he said, the United States benefited from its ability to engineer the world's most sophisticated weapons.

"We're no longer in that global environment," Duffey said, arguing that the Pentagon needs not only superior technology but speed and volume.

The argument over whether America's missile stocks are "running out" will continue, particularly while the actual numbers remain classified. The more consequential change is already visible.

Iran spent decades building a military around the assumption that it could not compete with the United States in sophistication. Washington is now spending billions to ensure that its technological superiority does not leave it vulnerable on quantity.

The next arms race is no longer only about who can build the better missile. It is also about who can build the next one fast enough.

Dozens of Iran protest detainees held without hearings - rights group

Aug 7, 2026, 11:29 GMT+1
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Dozens of people detained over Iran's January protests remain in a security ward in the country's northwest, with more than half still awaiting hearings or serving prison sentences of up to five years, the US-based Human Rights Activists News Agency (HRANA) reported on Friday.

HRANA said 54 detainees were being held in Ardabil prison, near Iran's border with Azerbaijan. Of those, 25 have been sentenced to between six months and five years and three months in prison, while 29 remain in custody without having had a hearing in their cases.

Among those convicted, Ahmad Seifi received the longest sentence of five years and three months, while Milad Ashkani was sentenced to four years. Three others received sentences of three years and six months, according to HRANA.

Prosecutors seek harsher sentences

An informed source told HRANA that Ardabil prosecutor Jalal Afaghi considered the sentences handed to 10 of those convicted too lenient and had asked Iran's Supreme Court to increase their punishments.

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HRANA said full details of the charges, proceedings and courts responsible for the sentences had not been made public.

Some of the detainees have also been denied telephone calls and family visits, while relatives have faced restrictions in seeking information about their cases or requesting temporary release, the rights group said.

Hundreds detained in northwestern province

Around 800 people were arrested in Ardabil province during the January protests, according to HRANA. The group said about 500 were released during the first 10 days and roughly another 250 were later freed after posting bail or other forms of security.

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The cases form part of a much broader judicial crackdown following the protests. Rights groups have estimated that more than 60,000 people were detained across Iran, while some independent sources have put the number summoned, detained or interrogated at more than 100,000.

Iranian judiciary spokesman Asghar Jahangir said in February that authorities had issued more than 10,000 orders sending cases for prosecution and around 9,000 indictments against people detained during the unrest.

The report comes amid mounting international concern over prosecutions and executions connected to the protests.

UN human rights chief Volker Türk said this week that Iran had executed at least 56 people on national security-related charges since March 19, including 27 in protest-related cases. He urged Iranian authorities to halt executions and move towards abolishing the death penalty.

Hunger at the checkout: Food thefts stir debate over Iran's economic decline

Aug 6, 2026, 10:33 GMT+1
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Hooman Abedi
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A shopper looks over dairy products in an Iranian supermarket. Retail workers say thefts of basic food items have become more common as economic pressures intensify.

Petty thefts of basic food items are becoming a symbol of Iran's economic hardship, according to a newspaper investigation published on Wednesday that linked supermarket shoplifting to inflation and shrinking purchasing power.

Unlike the corruption scandals that have long dominated headlines in Iran, the report by Jahan-e Sanat focuses on thefts measured not in billions of rials but in loaves of bread, packages of cheese and cuts of meat.

It argues that cases involving everyday groceries are increasingly reflecting economic distress rather than simple criminality.

"There are no billions of tomans, no gold, no luxury villas," the newspaper wrote. "Sometimes it is only a can of cheese, a loaf of bread or a few simple food items."

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    Iran managing the inflation statistic, not the inflation

Days before Jahan-e Sanat published its report, CCTV footage from outside a minimarket at night in the northern city of Babolsar spread widely across Persian-language social media.

The footage appears to show a woman wearing a black chador approaching a display of boxed goods outside the shop. After pausing beside the display and glancing around, she appears to pick up one of the boxes before walking away.

Exactly what prompted the woman's actions remains unknown. But for many Iranians, the clip became less about one apparent shoplifting than about the growing struggle to afford everyday necessities.

"May God never let anyone feel ashamed in front of their family," one user wrote.

"This is what happens when prices keep rising. We live in a country rich in oil and gold, yet the government cannot provide for 87 million people," another commented.

"People simply cannot afford to buy things anymore because prices have become so expensive," another wrote.

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Others pleaded with whoever shared the footage not to expose the woman's identity.

"Who would steal a few groceries unless driven by poverty and hunger? God help them," one commenter wrote.

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AI-generated image shows a security camera monitoring supermarket shelves in Iran, where reports of petty thefts involving everyday groceries have sparked debate over poverty and the country's worsening cost-of-living crisis.

"Maybe she had no money to buy food for her children. The shopkeeper should have protected her dignity instead of exposing her," another said.

Some comments contrasted the apparent theft with what they described as large-scale corruption, arguing authorities should focus on powerful figures accused of enriching themselves rather than people taking everyday necessities.

The sympathy expressed online echoed account gathered by Jahan-e Sanat from a supermarket employee who described an apparent increase in customers taking inexpensive food items.

Behind the supermarket shelves

Amirhossein, an employee at a large supermarket chain, told the newspaper he had witnessed several such incidents during the past 10 months.

He recalled seeing a woman place two tubs of cheese into her handbag during a busy period before leaving without paying. In another case, he said, security camera footage later showed a man leaving with butter, cakes and pastries concealed beneath his coat.

Staff also stopped a customer who had eaten packaged cakes inside the store and hidden the empty wrappers before trying to leave, according to the employee.

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    Iran faces region’s harshest mix of wartime contraction and inflation

Perhaps most surprising, Amirhossein said, was a regular customer who was caught taking a package of meat.

"I think poverty is the main reason," he told Jahan-e Sanat. "You cannot judge everyone the same way, but when someone steals a simple item, they are probably under enormous pressure. Sometimes, if what was taken has little financial value, we don't pursue it because we think the person's circumstances may have brought them to this point."

'A crisis of livelihoods'

Sociologist Mostafa Abroshan said reports of thefts involving bread, dairy products and other essentials should be viewed in the context of Iran's prolonged economic difficulties.

"Thefts of basic goods, especially food and other necessities, reflect disruptions in economic structures and the declining ability of households to meet their basic needs," he told the newspaper.

"This does not justify theft, but it shows that people's behavior must be understood within its social context."

Abroshan said inflation, declining purchasing power and job insecurity had left many households struggling to afford essential goods.

"A society in which stealing bread, milk or rice becomes more common is facing a crisis of livelihoods and social justice more than a security crisis," he said.

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A shopper carries groceries in Iran. Rising prices and declining purchasing power have pushed basic food items to the center of the country's widening cost-of-living crisis.

Prolonged economic hardship, he warned, could also erode social trust, leaving retailers more suspicious of customers, increasing security costs and weakening confidence in public institutions.

While enforcing the law remains necessary, Abroshan said that reducing poverty, controlling inflation, creating jobs and strengthening social support would do more to curb petty theft than harsher punishment alone.

Without addressing the economic pressures facing low-income households, he said, the theft of everyday groceries risks becoming an increasingly visible measure of Iran's widening cost-of-living crisis.