US blockade could cost Iran $18 billion a year, business chief says
US maritime blockade could add about $18 billion annually to the Iran’s trade costs, the head of the Iran-China Chamber of Commerce said on Tuesday, warning against trying to adapt to it as Tehran did with sanctions.
Majidreza Hariri said transporting a container from China to Iran costs about $3,000 by sea, compared with an average of $12,000 over land. With around two million containers entering Iran’s southern ports annually, the additional $9,000 per container would impose about $18 billion in extra costs, he told KhabarOnline.
Hariri said the figure exceeded Iran’s annual spending of less than $15 billion on imports of essential goods and medicine.
“The worst thing that could happen today is for us to think we can circumvent the naval blockade and try to run the country despite it,: he said. “We did something similar with sanctions: instead of getting them lifted or finding a mechanism to neutralize them, we tried to circumvent them. The result was a weakened economy and widespread corruption.”
He also warned that moving Iran’s roughly $50 billion in annual non-oil exports over land would cost more than the profits they generated, making such trade economically unviable.
Workers across Iran’s mining, industrial and municipal sectors say they have gone months without full pay, while some employers have also cut staff, deepening pressure on households already struggling with rising living costs.
Messages sent to Iran International describe wage arrears ranging from several weeks to eight months at mining operations in different parts of the country. Iran International could not independently verify the accounts.
The wife of an employee at the Sanghan iron ore mine in Khaf, northeastern Iran, said her husband, who has worked there for 24 years, had not received a salary for three months despite receiving his work statement through late June.
Workers at the Chah Firouzeh copper mine in Kerman province were still waiting for their June wages, according to another message.
At Gol Gohar in Sirjan, also in Kerman, workers had gone eight months without pay and some employees had been dismissed without receiving wages owed to them, another message said.
Similar complaints have emerged from major industrial companies.
Employees at MAPNA Locomotive in Karaj, west of Tehran, have gone four months without full wages, according to information received by Iran International.
One employee said workers received just 20% of their salary last month and that the payment problems began during the 40-day war and have continued since. Staff are reluctant to protest because they fear layoffs and are already under severe financial pressure, the employee said.
Contract employees at Iran Air have also reported reduced and delayed pay since the war. One employee said salaries had not returned to previous levels even after the company’s revenues recovered, adding that workers who complained risked losing their jobs.
In Sari, a northern city near the Caspian Sea, another source told Iran International that municipal employees and workers had gone three months without pay.
“We really don’t know where to turn,” the source said.
Household pressure
The wage problems come amid broader economic strains acknowledged by senior Iranian officials.
Central Bank Governor Abdolnasser Hemmati said Friday there was “no doubt that Iran’s economy faces serious problems,” adding that war and economic pressure had worsened inflation and unemployment. He rejected, however, suggestions that the economy faced an “imminent collapse.”
Even for workers receiving their wages, earnings increasingly fall short of basic living costs.
The semi-official ILNA news agency reported that many households exhaust their salaries before the middle of the month, forcing them to rely on installment plans and credit for routine expenses.
Majid Rahmati, a member of Tehran’s Coordination Council of Islamic Labor Councils, said in May that the minimum monthly household living basket had risen to around 70 million tomans, while married workers were receiving roughly 24 million tomans a month.
Iran’s statutory base minimum wage is around 16.6 million tomans a month before benefits, according to a Labor Ministry wage directive reported by the Tasnim news agency.
For those waiting months to be paid, the problem is compounded by what workers describe as a lack of effective recourse.
Some employees told Iran International they feared layoffs if they protested over unpaid wages, while others said complaints to labor authorities had failed to produce results.
Masoud Pezeshkian may have a claim to being Iran’s unluckiest president, with his two years in office dominated by wars that have battered an already ailing economy to the point that keeping households above subsistence would count as an achievement.
Pezeshkian inherited years of accumulated economic problems, many created or left unresolved by previous administrations, before war deepened those structural weaknesses.
Two recent assessments of his record suggest the result is something larger than the difficulties of one presidency: the ambitions of government itself are contracting from development toward survival.
“Pezeshkian thinks the nation should thank him only because there is no famine in Iran yet,” said Nasrallah Pejmanfar, an ultraconservative cleric and lawmaker from Shiraz.
Pejmanfar intended the remark as an attack. But it echoed a more substantive criticism offered by sociologist Hamzeh Nozari in the moderate daily Shargh: that merely preventing extreme deprivation is increasingly becoming a measure of government success.
From development to survival
Nozari focused on the government’s emphasis on protecting “people’s livelihood” through subsidies, electronic coupons and efforts to secure basic goods.
Such policies may prevent extreme poverty, he argued, but they also reveal how far the ambitions of government have narrowed.
“Providing a minimal living and securing a hand-to-mouth existence is the ruling paradigm of the government, while concepts like welfare, progress and development are sidelined,” Nozari wrote.
He contrasted the current approach with previous periods when Iranian governments, however successfully, pursued broader ambitions: economic expansion in the late 1980s, greater political openness in the 1990s and redistribution in the following decade.
The question, he argued, is whether this “livelihood paradigm” is a temporary response to war and economic emergency or a more permanent retreat from development.
The economics of scarcity
Economist Teymour Rahmani, writing in Donya-ye Eghtesad, approached the same crisis from a different direction.
For Rahmani, the central problem is inflation, driven above all by a severe fiscal imbalance as government revenues decline while large and inefficient expenditures continue.
He rejected the common explanation that the falling rial is itself responsible for accelerating inflation. Currency depreciation and rising prices, he argued, are symptoms of the same underlying fiscal problem.
“The fact that inflationary force manifests first through the exchange-rate channel and that exchange-rate increases precede inflation spikes does not mean currency depreciation is the root cause,” he wrote.
The consequences are increasingly visible across the country. Rahmani pointed to point-to-point inflation of 112.4 percent in the western province of Ilam, with other poorer provinces including Lorestan, Kurdistan and Hormozgan also experiencing triple-digit inflation.
He argued that Iran has entered an inflationary environment unlike any in its modern history, while crediting experienced civil servants and residual public confidence in the monetary system with helping prevent a slide into full hyperinflation.
“We must understand that inflation is the primary issue of the Iranian economy,” Rahmani wrote, warning that the underlying fiscal imbalance must be addressed.
Administering scarcity
The two analyses approach Pezeshkian’s predicament from different directions but arrive at closely related conclusions.
Nozari describes the consequence: a government whose conception of success increasingly revolves around maintaining minimum living standards. Rahmani describes the economic machinery pushing it there: fiscal imbalance, declining revenues and inflation severe enough to overwhelm household purchasing power.
Neither problem began with Pezeshkian. He inherited years of accumulated economic weakness, while war and sanctions have sharply worsened the conditions under which his government operates.
But two years into his presidency, the distinction between emergency measures and a longer-term transformation is becoming harder to make.
A government occupied with keeping food affordable, financing subsidies and preventing inflation from becoming still more destructive has increasingly little room to pursue the growth, welfare and development promised in its economic plans.
Iranian officials and analysts are publicly playing down the threat posed by a new defense pact between Saudi Arabia, Pakistan and Turkey, even as some commentators warn Tehran against underestimating an emerging regional alignment.
Foreign Ministry spokesman Esmail Baghaei said Monday that Iran had no reason to fear that the so-called Mecca Pact was directed against it, portraying the agreement instead as a response to Israeli ambitions and declining regional confidence in US security guarantees.
Seyed Abdollah Motavalian, a hardline commentator writing in the IRGC-affiliated Javan newspaper, similarly described the pact as having “considerable propaganda potential” but facing serious obstacles to becoming a strategic alliance.
He warned Tehran against making hasty decisions, particularly in negotiations with Washington, “based on fear of an alliance that has not yet taken shape amid propaganda hype.”
“Tehran’s strategic skill would be not to allow a political document, before it is tested against reality, to become an imaginary power in the calculations of decision-makers,” Motavalian wrote. “The first defeat in this arena may come not on the battlefield, but in the mind.”
Other Iranian commentary has emphasized the differing interests of the three countries and questioned whether Pakistan or Turkey would be willing to become directly involved in Saudi Arabia’s conflicts.
Their commitments, one analysis in Javan argued, may ultimately be limited to advisory support, weapons sales and joint exercises.
A retreat from Washington?
Iranian officials and state-affiliated media have also sought to interpret the agreement as evidence of Saudi Arabia’s frustration with Washington, particularly over what they describe as inadequate US protection against recent missile and drone attacks.
Tasnim, which is affiliated with the IRGC, argued that repeated attacks and Washington’s inability to contain the threat had pushed Riyadh to diversify its security relationships and reduce its reliance on the United States.
From Tehran’s perspective, that could carry potential benefits. A security architecture less dependent on Washington could weaken the United States’ traditionally dominant role in the region while creating additional complications for Israel.
The pact could also give Riyadh greater leverage in seeking stronger security guarantees from Washington, Iranian analysts said.
Pakistan or Turkey?
The involvement of Pakistan and Turkey nevertheless raises more complicated questions for Tehran.
Pakistan is a nuclear-armed power on Iran’s eastern border and has played an important role mediating between Tehran and Washington during the recent conflict.
Iranian commentators seeking to minimize the threat point out that Islamabad did not act against Iran during the 40-day Iran-US war despite its existing defense relationship with Saudi Arabia, instead helping mediate between the two sides.
Motavalian described Pakistan’s participation as part of “a multilayered deal and an increase in bargaining power,” rather than evidence of “the formation of a coherent war front.”
Turkey may present a different challenge.
Kamran Karami, a Persian Gulf security analyst writing for Donya-e Eqtesad, argued that Ankara’s participation could ultimately prove more consequential for Iran than Pakistan’s.
“For Iran, this development sends a clear message: Turkey is becoming one of the main poles of the Middle East’s new security architecture,” he wrote. Competition between Tehran and Ankara, he added, could gradually expand beyond economics and politics to “the design of the regional order.”
Others see Pakistan as the greater concern precisely because of its recent role as an intermediary with Washington. Tohid Javadi, a Middle East researcher, argued that turning a mediator into a rival security actor could complicate that relationship.
The possibility that other countries, including Egypt, could eventually join the arrangement has added to speculation that it might develop into a broader regional bloc.
Risks of underestimating pact
Not all Iranian commentary accepts the reassuring interpretation.
Asr-e Iran warned that dismissing the agreement as political theater could prove a mistake if it gradually develops military and security mechanisms capable of changing the regional balance.
Saudi Arabia brings financial resources, Pakistan military strength and nuclear capability, and Turkey one of the region’s most powerful armed forces, alongside considerable military experience and geopolitical reach.
Together, Asr-e Iran argued, they could eventually create a deterrent capable of limiting the room for maneuver of other regional powers, including Iran.
Fararu offered a similar warning, arguing that the significance of the pact is greater because it comes after a major Iran-US war whose underlying disputes remain unresolved.
The immediate purpose of such an alliance, it argued, need not be fighting a war. Its significance lies in changing the calculation before one begins.
“If Tehran, or any other actor, knows that an attack on Saudi Arabia could trigger a response from Turkey and Pakistan as well, the cost-benefit calculation of an attack changes,” the analysis said.
“In simple terms, the pact seeks to create a new equation: an attack on Saudi Arabia is no longer just an attack on Saudi Arabia.”
Iranian lawmakers are advancing a sweeping bill aimed at asserting greater control over the Strait of Hormuz, including restrictions on US and Israeli assets in a waterway through which about one-fifth of global oil and LNG supplies passed before the war.
The latest move came Monday, when parliament’s Internal Affairs and Councils Committee approved a provision banning the transit of assets and equipment owned by the United States, Israel and other countries Tehran “hostile,” committee spokesperson Valiollah Bayati said, according to parliament’s official news agency ICANA.
The restriction was among the first five articles approved as lawmakers began a detailed review of the proposed “Strategic Action to Ensure the Sustainable Security of the Strait of Hormuz and the Persian Gulf.”
Representatives from Iran’s Foreign Ministry, armed forces and parliament’s Research Center attended the meeting.
Bayati said the measure was adopted because the countries concerned had used the strait to carry out what he described as hostile actions and attacks against Iran. The remaining articles will be considered at future meetings.
Other provisions under consideration include tighter rules for vessels linked to countries Tehran regards as hostile and charges for maritime services provided to ships using the strait, lawmaker Sodeif Badri said Sunday.
Revenue would be directed toward security, monitoring and development infrastructure.
Badri said parliament was seeking a long-term legal framework for Iran’s management of Hormuz rather than relying on temporary policies, adding that the strait would not return to its pre-war conditions.
The legislation has not yet become law, and the provisions being considered by committees would still require parliamentary approval.
Parliament’s National Security and Foreign Policy Committee, which is leading the review, approved the bill’s general outlines Sunday without opposition among members present, spokesperson Hassan Ghashghavi said.
The Construction Committee has also backed the outlines, while the Internal Affairs and Councils Committee is reviewing parts of the legislation.
The parliamentary effort has gathered momentum since the war, with lawmakers increasingly presenting control of the strait as a strategic lever in Iran’s confrontation with the United States.
The legislation was formally submitted to parliament on July 13. A day later, Ebrahim Azizi, chairman of the National Security and Foreign Policy Committee, said lawmakers were standing firmly by their “red lines,” particularly over management of Hormuz.
“This is the first step,” Azizi wrote on social media, adding that further measures would “take sleep from the eyes of our enemies.”
By late July, 12 proposals had been referred to Azizi’s committee for consolidation into a single bill, according to parliament’s presiding-board spokesperson Abbas Goudarzi. Nine dealt directly with Hormuz and three proposed changes to Iran’s maritime zones law.
The proposals cover restrictions on navigation, penalties for violations and potential revenues from Iran’s management of the strait, suggesting lawmakers are seeking to turn wartime control of Hormuz into a more permanent legal framework.
Supreme Leader Mojtaba Khamenei appointed veteran intelligence official Hossein Taeb to lead the Basij, giving the former protest crackdown figure a mandate to expand the paramilitary force’s grassroots intelligence network and use of new technologies.
In his decree, Khamenei instructed Taeb to “strengthen the popular intelligence network,” improve training and skills and make greater use of new technologies for what he described as a “people-based” response to enemy threats.
The directive places intelligence gathering prominently among Taeb’s responsibilities at the Basij, whose branches extend through neighborhoods, universities, workplaces and other parts of Iranian society.
With Taeb’s appointment, Khamenei is returning a figure closely associated with the suppression of dissent and protests to a leading role in one of the Islamic Republic’s main domestic security and mobilization organizations.
Taeb previously commanded the Basij during the unrest surrounding the disputed 2009 presidential election, when the force played a major role in suppressing demonstrations.
Taeb’s career has been centered on Iran’s security and intelligence establishment for more than four decades.
Born in Tehran in 1963, the cleric joined the Revolutionary Guards in 1982 and served in IRGC units in Tehran, Qom and Khorasan before moving into the Intelligence Ministry, where he rose to a senior management position.
He also served in counterintelligence at the ministry and later headed the IRGC’s own intelligence protection apparatus.
Return to Basij
His Monday appointment brings him back to an organization he previously led.
Taeb, a longtime ally of Mojtaba Khamenei, was appointed commander of the Basij Resistance Force in 2008, before becoming head of the newly established IRGC Intelligence Organization in October 2009, shortly after the mass protests that followed that year’s presidential election.
He went on to lead IRGC Intelligence for more than a decade, making him one of the most influential figures in the Islamic Republic’s internal security apparatus. The organization grew during his tenure into a powerful intelligence body operating alongside the Intelligence Ministry and became heavily involved in cases concerning political activists, journalists, dual nationals and alleged espionage.
Khamenei’s decree also ordered Taeb to broaden the Basij’s reach under the slogan “Every Iranian, a Basiji,” expand neighborhood and sector-based units, deepen cooperation with state institutions and develop social-service networks centered on mosques. He was also tasked with promoting the Basij model of “popular resistance” abroad.
Taeb replaces Gholamreza Soleimani, who was killed in the US-Israeli war earlier this year.