Iran sets seven terms for renewed US talks, says ready for escalation

The judiciary's news agency, Mizan, identified him as Hossein Pedaran and said he had been convicted of espionage and intelligence cooperation with Israel and sentenced to death, with the sentence upheld by the Supreme Court. He had been arrested in Isfahan on charges related to the war.

Mizan published a long account of what it described as Pedaran's confessions. According to that account, he first messaged the CIA offering to cooperate and received no reply, then contacted Mossad and was answered days later by an officer who introduced himself as "Ben" using a Dutch WhatsApp number.

The agency said he sent encrypted reports on military facilities and on staff who worked at them, including personal details and their spouses' phone numbers, used numerous SIM cards registered to others, and was given a remote-control device capable of taking hidden photographs.

It said he was paid in euros collected from a magnetic box behind a guardrail near a Tehran bridge and, on another occasion, from a coffee shop bathroom, and that a notebook on missile subjects marked "highly confidential" was found at his home.

Mizan said Pedaran had cut contact before the war and tried to reach Mossad again by Telegram once it began, and was arrested. It said he had a lawyer, that a forensic examination found no impairment of his judgment, and that the court held his information had contributed to strikes in which personnel were killed or wounded.

None of these claims can be independently verified, and Mizan did not provide any evidence for the allegations.

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  Iran executes student on charges of spying for Israel

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  Iran family says executed nuclear scientist confessed after threats to mother

Iran's espionage cases are heard by Revolutionary Courts, which operate without public scrutiny of the evidence, and the state routinely broadcasts and publishes confessions that defendants and their families have later said were obtained through torture, prolonged solitary confinement and threats against relatives.

Rights organizations have documented the pattern for years, and have recorded cases in which people detained during protests were subsequently charged with working for Israel.

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  Iran sentences two more protesters to death as executions surge

Iran has executed at least a dozen people on espionage or Mossad-collaboration charges since the June 2025 war with Israel, according to human rights groups, and the pace has increased since the recent war began in February.

Those executed this year include Ali Ardestani in January, Mehdi Farid, a former employee of the atomic energy organization, in April, and Omid Behzad and Pouria Safvat in August. Iran Human Rights recorded at least 1,639 executions in the country in 2025, the highest annual total since 1989.

Democratic lawmakers have increasingly portrayed the war not simply as a foreign-policy dispute but as a contributor to the cost-of-living pressures weighing on American households.

“There’s no plan. No strategy,” Representative Jason Crow of Colorado said. “The President started a war with Iran that he doesn’t know how to win or get us out of. Americans are paying the price every day.”

The argument comes as disruptions to oil supplies and shipping through the Strait of Hormuz have pushed energy prices sharply higher, making gasoline an increasingly prominent political issue ahead of the November elections.

Representative Rosa DeLauro of Connecticut sought to connect those costs directly to the war, saying commuters were paying nearly $1 million more a day for gasoline than in July.

“This is a crisis that is only beginning,” she said. “We are about to enter a winter where millions of Americans will experience the disastrous effects of Trump’s illegal war in Iran.”

Public opinion suggests widespread concern over both the war and energy costs.

A Marquette Law School national poll conducted September 2-9 found that 80% of adults said gasoline prices had risen over the previous six months, including 55% who said they had risen “a lot.”

Only 20% approved of Trump’s handling of gasoline prices, while 80% disapproved. On Iran, 26% approved of his handling of the conflict and 73% disapproved, while 79% said the war had not been worth its cost.

Trump has continued to defend his approach while suggesting an end to the conflict may be approaching. He said this week that Iran wanted an agreement and that “hopefully we're toward the end of the war,” though negotiations remain stalled.

Vice President JD Vance has argued that ending US involvement could itself carry severe economic consequences, saying this week that leaving the region while Iran continued attacking shipping would risk a worldwide energy crisis.

Democrats, however, are increasingly trying to make the economic consequences of the war part of their argument to voters.

Representative Ro Khanna of California on Friday introduced what he called the Illegal War Refund Act, proposing $1,700 payments to taxpayers funded from the Defense Department budget.

“Trump’s illegal war in Iran has cost Americans in food and gas prices an estimated $230 billion,” Khanna said. “Today, I introduced the Illegal War Refund Act to put that money back in the pockets of Americans.”

The conflict continues more than six months after US and Israeli strikes on Iran began on February 28. The US naval blockade has sharply restricted Iranian oil exports, while attacks on shipping and disruption around the Strait of Hormuz have added pressure to global energy markets.

For Democrats, the prolonged war abroad and higher prices at home are increasingly becoming a single argument as the midterms approach.

“We are ashamed that the public’s income does not cover their expenses, especially for wage earners,” First Vice President Mohammad Reza Aref said Thursday. “You cannot increase salaries by 20% when inflation is running above 60–70%.”

Government spokeswoman Fatemeh Mohajerani has disclosed a roughly 310-trillion-toman shortfall in expected tax revenues during the first half of the current year, while the head of the Food and Drug Administration says medicine prices have risen roughly 103% this year.

President Masoud Pezeshkian has offered an equally stark assessment of the public mood, invoking the 2019 fuel-price protests as a warning against imposing further economic pressure.

“People are now on the edge; if I impose another pressure, they may fall off,” he said.

The warning has not prevented the government from doubling the gasoline price for high-volume consumers, highlighting the difficult choices facing Tehran as it tries to contain household pressure while confronting the economic costs of war.

The household squeeze

The free-market dollar has traded at around 2.30–2.33 million rials this week, with the Iranian currency losing roughly 44% of its value against the dollar over the past six months.

Food and beverage inflation has officially exceeded 127% year on year, contributing to a sharp contraction in consumption of protein, dairy products and legumes among urban working-class households.

State-run ILNA has published unusually blunt reports on the cost of living, including unofficial bread-price increases in Tehran, families cutting meat from their diets and rents doubling.

The financial daily Donya-ye Eghtesad has warned of signs of a “new inflationary regime” in which persistent price rises are shaping contracts, expectations and everyday economic decisions, making confidence in the rial increasingly difficult to restore.

The approaching academic year provides another measure of the squeeze.

According to Donya-ye Eghtesad, equipping a single primary or secondary-school student with basic uniforms, a schoolbag, shoes and stationery now costs between 150 million and 200 million rials.

A basic pack of notebooks that cost around 3.5 million rials last year now costs approximately 15 million, forcing some lower-income families to reuse old school supplies.

War adds to the strain

Iranian oil exports have reportedly fallen from around 2 million barrels per day before the war to approximately 220,000–255,000 barrels per day in August, sharply reducing one of Tehran’s principal sources of foreign currency.

The Economy Ministry has established an “Economic War Headquarters” as officials increasingly frame the economic crisis as part of the broader confrontation with Washington. But falling oil revenues leave the government with fewer resources to cushion households against rising prices and a weakening currency.

Oil-industry workers have staged weekly Monday protests over pay and taxes at offshore platforms and in Assaluyeh, while nurses demonstrated in Kermanshah on September 8 over unpaid wages.

Accounts in Iranian media offer a more immediate picture of the pressure behind such discontent: street vendors struggling with higher rents, households going months without eating meat and parents weighing school expenses against basic food costs.

The combination of high inflation, declining purchasing power and sharply reduced oil revenues leaves Tehran with increasingly limited room to ask households to absorb further economic costs from the war.

Iranian officials say attacks have knocked out about 230 million cubic metres a day of gas-production capacity, compared with pre-war output of roughly 650 million cubic metres a day. That is just over a third of pre-war production.

Tehran has begun trying to claw some of that capacity back. Officials have said roughly 100 million cubic metres a day could be restored in the coming months, still less than half the capacity reported lost.

But restoring production is only part of the problem. Rystad Energy estimated in April that repairing damage to Iran’s energy infrastructure could cost as much as $19 billion, affecting gas processing, refining and export facilities.

That figure covers physical repairs rather than the wider economic consequences of lost production, disrupted exports and industrial shutdowns. Rystad has also identified shortages of critical equipment and workers as major obstacles to recovery.

Winter could provide the first major test of whether Iran can repair enough of its energy system quickly enough to prevent wartime damage from developing into a broader economic crisis.

A system already under pressure

Iran entered the war with an energy system already struggling to match supply with demand.

The US Energy Information Administration has said sanctions slowed development of the country’s natural-gas infrastructure and that limited storage capacity left Iran poorly equipped to manage seasonal swings in consumption.

In 2022, residential and commercial consumers accounted for 33% of Iran’s gas consumption, industry including petrochemicals for 27%, and electricity generation for another 28%, according to the EIA.

Household and commercial gas consumption rises during winter, while demand from the electricity sector is highest during summer.

The loss of production capacity therefore leaves Tehran having to allocate a reduced supply among households, power stations, petrochemical plants and other industrial users.

The problem is not simply how much gas Iran has underground. Gas reserves alone do not guarantee reliable supply: the country also needs functioning processing plants, pipelines and storage facilities, as well as electricity, maintenance, equipment and skilled workers to keep the system operating.

Damage beyond gas

Reduced gas supplies to power plants could constrain electricity generation, while restrictions on industrial users could hit petrochemicals and energy-intensive sectors such as steel, aluminium and cement.

That means the eventual cost of the damage cannot be measured solely by the reconstruction bill. Lower production can also translate into weaker industrial output and exports at a time when Tehran needs resources to finance repairs.

Iran's broader energy sector is already under severe financial pressure. The war and US naval blockade have sharply curtailed Iranian oil exports, leaving tens of millions of barrels stranded in storage and depriving Tehran of crude export revenue.

The combination creates the risk of a cycle in which energy shortages constrain economic activity while reduced revenues make restoring the energy system more difficult.

A longer-term problem

The war has also magnified structural weaknesses that predate the conflict.

South Pars, which Iran shares with Qatar, is the country's largest non-associated natural-gas field and the centre of its gas industry. But the EIA had already warned before the war that without additional investment Iran could struggle to satisfy domestic demand while meeting its export commitments.

Sanctions have restricted access to foreign investment, technology and specialised equipment, leaving Tehran with an existing infrastructure challenge before US and Israeli attacks added an urgent reconstruction burden.

Rystad said delays in procuring critical equipment were likely to determine how quickly damaged energy infrastructure could be restored, while shortages of workers were another major obstacle.

The winter test

For Tehran, the immediate question is how much of the reported 230 million cubic metres a day of lost gas capacity can be restored before colder weather drives household demand higher. How severe the remaining deficit becomes will depend on demand, further repairs and whether additional infrastructure is damaged.

Tehran may have to balance household heating against industrial production and electricity generation while trying to rebuild infrastructure under sanctions.

Rystad's $19 billion estimate gives a sense of the potential physical repair bill. The larger test is whether Iran can restore enough of the system to prevent damaged gas infrastructure from feeding through into electricity shortages, industrial disruption and further economic pressure.

The coming winter should provide the clearest indication yet.

Trump told Axios he was approaching a major decision on whether to resume broad attacks on Iran, after saying a day earlier that he hoped the war was nearing its end.

“I have a big decision coming up. Do I want to go in and annihilate them [the Iranian regime] or do I not? It's a big decision. Anything could happen with me,” Trump said in an interview published Thursday.

He is expected to meet leaders from Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman on the sidelines of the UN General Assembly next week before deciding on the next phase of the war. Axios reported that Trump wants to hear from regional allies before making his decision.

The consultations come as Washington’s partners and rivals push in different directions over whether the war should be contained or intensified.

China intensifies diplomatic push

China expanded its diplomatic engagement over the conflict Thursday, when Foreign Minister Wang Yi spoke with US Secretary of State Marco Rubio, one day after holding talks with Iranian Foreign Minister Abbas Araghchi in Beijing.

China’s Foreign Ministry said Wang and Rubio discussed preparations for the next stage of high-level exchanges between the two countries and exchanged views on the Middle East.

During Wednesday’s talks with Araghchi, Wang urged Iran and the United States to exercise restraint and resume substantive consultations, while also calling for the Strait of Hormuz to reopen.

Beijing’s diplomacy comes as the conflict threatens shipping routes at both ends of the Arabian Peninsula, increasing the risk of wider disruption to regional energy flows.

China has also privately asked Iran to use its influence to rein in Yemen’s Houthis after Saudi Arabia appealed to China for help, Reuters reported Thursday, citing three Iranian sources familiar with the matter.

The sources said Saudi Arabia sought Beijing’s intervention as Houthi advances around Bab el-Mandeb increased risks to oil exports and commercial shipping. China asked Tehran to help prevent the fighting from spreading further across energy routes important to Beijing.

The intensified diplomacy has not narrowed broader differences between Beijing and Washington over Iran.

Russia and China on Thursday vetoed a US-drafted Security Council resolution extending the mandate of the UN panel monitoring sanctions on Tehran, underscoring the continuing divide over the international sanctions framework.

Israel signals campaign is not over

While China pressed for restraint, Israel signaled that it was not ready for the military campaign to end.

Prime Minister Benjamin Netanyahu said Israel still had work to complete against Iran and its regional allies and said Israel intended to bring down Iran’s regime.

“We have done most of the work, but there is still work to complete, and we will complete it,” Netanyahu said in remarks published Thursday by his official account.

Defense Minister Israel Katz separately said Israel still had “important goals” to achieve against Iran and in other arenas, adding that the broader military campaign was not over.

“We will act with military force and political wisdom to achieve them,” Katz said.

Shipping pressure persists from Hormuz to Aden

The stakes surrounding Trump’s decision were also visible at sea, where commercial traffic remained severely depressed and new security incidents were reported along key regional shipping routes.

Only three commodity vessels transited the Strait of Hormuz Wednesday, down from 12 a day earlier and well below the 10-day average of about 17, Reuters reported Thursday, citing preliminary ship-tracking data.

The figures exclude vessels that may have crossed with their Automatic Identification System transponders switched off.

Fresh maritime security reports added to concerns over the region’s main shipping routes.

UK Maritime Trade Operations said it received a report of a security event in the Strait of Hormuz about 16 nautical miles northeast of Khasab, Oman. The crew was reported safe and no environmental impact had been confirmed while authorities investigated.

Farther west, a westbound tanker in the Gulf of Aden reported being pursued by a skiff that attempted to intercept it about 75 nautical miles east of Aden, according to UKMTO.

Trump has not said when he will decide whether to resume large-scale strikes. His meeting with six Persian Gulf leaders next Tuesday will bring him face to face with governments exposed to the economic and security costs of a wider conflict, as Washington weighs whether to intensify the campaign or pursue another diplomatic opening.