Iran International
The Islamic Republic is in a "slow meltdown" that may not bring it down soon but is narrowing its options as the economy sinks, repression deepens and divisions open up among its own hardliners, analysts told Iran International's Eye for Iran podcast.
"I just don't see a pathway to rehabilitation," said Kamran Bokhari, a strategic forecaster and senior resident fellow at the Middle East Policy Council.
“This regime cannot go back to what it was.”
The pressure is coming from every direction. The rial fell past 2.5 million to the dollar this week, a record low; at that rate the minimum monthly wage of 166 million rials is worth about $66.
On Wednesday, Washington extended sanctions to Iran's auto and rail industries, on top of a naval blockade of Iranian ports and a campaign against sanctions evasion that have already cut deep into oil revenue and access to foreign currency.
At home, two people detained after January's nationwide protests were executed this week, and four others arrested during the unrest have recently been sentenced to death.
An appeals court upheld sentences of 74 lashes against the singer Parastoo Ahmadi and seven musicians and organizers over a concert she performed without a headscarf, filmed and posted online.
Human Rights Watch and the Abdorrahman Boroumand Center documented 29 executions between March and the end of August of people arrested in connection with the protests. Five were carried out in public.
'They want to show they're in charge'
Alberto Fernandez, a former US diplomat and vice president of the Middle East Media Research Institute, said the repression should be read alongside the economic pressure.
"They want to show they're in charge," he said. Extreme violence, he said, is one way of demonstrating to Iranians and to the world that the state can still impose its will. The more it relies on that, the more it shows both the power it has left and the pressure it is trying to hold down.
"The challenge of the regime is not the war," Bokhari said. "The challenge is governance and economic statecraft."
Three senior Iranian sources told Reuters last month that the US campaign against oil exports and sanctions evasion was becoming increasingly hard to withstand. The average monthly wage now covers less than a third of a household's basic costs, Reuters reported.
Even if Tehran wins some sanctions relief, Bokhari said, he sees little prospect of it recovering what it had.
"Regimes take a long time to undergo a meltdown," he said. "That meltdown was happening even before this war."
The price of eggs
David Patrikarakos, a special correspondent for the Daily Mail and an author, said he watches one basic indicator.
"I have become a keen watcher of the price of Iranian eggs," he said.
When he spoke with people inside Iran during the war, he said, the conversation kept returning to the cost of necessities.
"When the basics become too expensive, no government can deal with that," he said. "You can only terrorize people back into their homes for so many things. If they're starving, they can't afford food, there's nothing you can do."
The authorities appear to know it. More than 6,000 people have been arrested since the war began, Reuters reported this week, as officials worry about renewed protests.
But repression has limits. Bokhari called it a "precision instrument" that can backfire when used too broadly.
"You can oppress people, but if you start to do it at scale, then it can backfire," he said. "At some point, your own security forces will say, 'Where is this going?'"
'The butter part is going out'
If the Islamic Republic survives, Fernandez said, one model is what he called the "North Koreanization" or "Houthization" of Iran: a poorer, more predatory state that can still repress at home and project force abroad while its economy and institutions are hollowed out.
That was never the plan. The Islamic Republic wanted revolutionary and military power abroad and a functioning society and middle class at home, Fernandez said, the old combination of guns and butter.
"Well, the butter part is going out," he said.
Without a reversal, he said, Iran could become "a more ramshackle predatory state." "It still can bite, but it becomes much more fragile, much more fractious."
That trajectory would run against Iran's own sense of itself and the aspirations of its educated population, Patrikarakos said. "The Iranian self-image is wanting to take part in the world."
Even the Islamic Republic, for all its decades of confrontation with the West, never sought North Korea's isolation, he said.
"They don't want to go down the North Korea path," Bokhari said. "The question is, can they avoid it?"
As the options narrow, he said, survival is overriding everything else. "Regime survival is now more than ever before the primary imperative."
What to watch
Bokhari said he is watching for infighting that can no longer be contained. "I'm also watching for signs of infighting, where different elements of the regime start to disagree to a point where the disagreement isn't behind closed doors," he said.
Fernandez said the visible divisions are no longer mainly between moderates and conservatives, the old frame for Iranian politics, but among hardline factions themselves.
He is also watching the currency, and how long Tehran can hold out without real relief. Iran's leaders may be looking to the US midterm elections and the next Congress in the hope that politics in Washington will ease the pressure, he said. If that hope fails, they face a long period of no war and no peace while the squeeze continues.
The Islamic Republic has survived periods when it looked weaker, more isolated and less popular than before. Survival and recovery are not the same thing. The price of food, the value of the rial, unrest in the streets, fractures at the top and the loyalty of the security forces will show how far the meltdown has gone.
"This situation is untenable," Bokhari said.
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Haalvsh, which covers developments in Sistan-Baluchestan, said five members of the IRGC-Quds’s Fatemiyoun militia were killed in the Rudmahi area near Zahedan after an explosive device detonated beside their vehicle and gunmen opened fire.
Iran's Revolutionary Guards gave a different account, confirming a roadside bombing in the province but saying one fighter was killed. The IRGC Ground Force said what it described as "terrorists" had planted a bomb along a road in Sistan-Baluchestan and carried out an indiscriminate attack.
The Guards did not identify the person killed, mention Fatemiyoun or give a precise location for the incident.
Conflicting accounts of Zahedan attack
Haalvsh said the attack took place at about 6:30 a.m. as the men were patrolling the Kaleh-Pedeh route in the Rudmahi area in a Land Cruiser equipped with a DShK heavy machine gun.
Citing eyewitnesses, the outlet said an explosive device was detonated as the vehicle passed and that gunmen opened fire after the blast destroyed the vehicle.
The identities of those reported killed have not been released.
Haalvsh said local sources continued to put the death toll at five and identified all of those killed as Fatemiyoun members, but said it had not been able to independently verify the precise number of deaths.
Fatemiyoun is a militia linked to the IRGC's Quds Force and made up largely of Afghan Shiites. It was formed with Iranian support and fought alongside forces loyal to Bashar al-Assad during Syria's civil war. The United States sanctioned the group in 2019.
Haalvsh said Friday's incident was the second deadly attack on forces it identified as Fatemiyoun in Rudmahi in less than a month. It reported in September that four members deployed in the area by the IRGC were killed when gunmen attacked them during a patrol.
The outlet has also reported the deployment of hundreds of Fatemiyoun members to several parts of Sistan-Baluchestan, including areas around Zahedan, Mirjaveh, Rask, Saravan, Zabol, Chabahar, Konarak and Iranshahr.
Hours of fighting in Rask
The violence on Friday was not limited to Zahedan.
Haalvsh said Iranian military and security forces moved in Rask county at about 5:30 a.m., triggering fighting with armed men that lasted more than six hours.
Heavy gunfire and explosions were heard during the confrontation, according to the outlet, which said reinforcements and additional military equipment were sent to the area.
Armored vehicles, pickup trucks and civilian cars with private license plates were seen at the scene, while a vehicle carrying a heavy weapon was also deployed, Haalvsh reported.
Local sources cited by the outlet said reconnaissance quadcopters and explosive drones were used during the operation.
Haalvsh said the identity and affiliation of the gunmen remained unknown and that no reliable information had emerged about casualties or damage.
IRGC-linked Fars news agency, citing an unnamed source, said security forces had begun an operation against armed groups in Rask on Friday morning and that "a number" of gunmen had been killed. Fars said the operation was continuing.
Intelligence facility targeted
An intelligence ministry facility in Nokabad, the administrative center of Taftan county, was also attacked by gunmen early Friday, according to the Baloch Human Rights Documentation Network.
The group said the attackers fired at the building. Local sources also reported an explosion and said a grenade may have been used.
No casualties or damage were immediately reported, and no individual or group had taken responsibility for the attack.
Fighting follows deadly clash a day earlier
Friday's incidents came a day after another hours-long confrontation near Zahedan.
On Thursday, the IRGC said six gunmen were killed during fighting with security forces in the Manzelab area. The Guards' Quds regional headquarters said its forces had identified and "destroyed" what it described as an armed "terrorist-Takfiri" cell that had been preparing an attack.
Haalvsh said that clash began at about 6 a.m. and continued for several hours, with heavy gunfire and rocket-propelled grenade fire heard in the area.
The IRGC said explosive devices were recovered but did not identify the armed group or name those killed.
A police officer, Alireza Sanchouli, was also killed in a separate armed attack on a checkpoint at the entrance to Rask, according to Iranian reports.
At least one person was killed earlier in the week during another confrontation with security forces in Iranshahr.
Last month, a roughly nine-hour battle in the Bakhshan area of Saravan killed three IRGC members and four gunmen. Reports at the time linked the armed side to the People's Fighters Front, an alliance formed in late 2025 that includes several Baluch armed groups, among them Jaish al-Adl.
Iranian authorities regularly describe armed groups operating in Sistan-Baluchestan as terrorist organizations. The southeastern province has seen repeated armed attacks, insurgent activity and clashes between security forces and gunmen in recent weeks.
The Amir Kabir industrial area in Isfahan is home to mechanics, machinists, body shops, battery specialists and parts dealers serving trucks, construction equipment and mining machinery. Labor news agency ILNA said activity across the district had fallen sharply as transport demand weakened and the cost of keeping vehicles on the road climbed.
“When freight activity slows and less cargo is being moved, drivers face serious problems,” a person working in the district told ILNA. “Most drivers bought their vehicles on installment, so besides making loan payments, they also have to cover the high cost of supporting their families.”
Inflation eats into household budgets
The slowdown comes as Iranian households face some of the steepest price increases in years. Official data for September showed consumer prices were 89.8% higher than a year earlier, while average inflation over the preceding 12 months reached 73.6%. Food and drink prices had already risen 127.5% year on year in August.
Reuters reported in September that food prices had more than doubled while the wider economy was being squeezed by sanctions, restrictions on oil exports and the costs of the seven-month conflict with the United States.
Iran’s currency has added another layer of pressure. The rial fell beyond 2.5 million to the US dollar on the free market earlier this week, a record low, compared with roughly 1.1 million a year earlier.
For businesses dependent on imported equipment, that fall feeds quickly into prices.
“Parts dealers buy according to the day’s dollar rate,” an Amir Kabir business operator said, adding that prices often fail to come back down even when the rial temporarily strengthens.
“The consumer and the worker end up carrying the greatest burden,” he said.
Fewer loads hit an entire chain of jobs
The industrial district illustrates how weakness in one part of Iran’s economy spreads quickly into others.
A single truck can generate work for engine mechanics, gearbox specialists, machinists, painters, welders, upholsterers and parts sellers before it gets back on the road. When freight volumes fall, drivers delay repairs and workshops lose business.
“There’s a deep slowdown across the industrial area,” the tradesperson said. “It’s not that the vehicles don’t need work. Purchasing power and liquidity have fallen sharply.”
Some vehicles are repaired but then sit idle because there is no cargo to move, he said. Even when transport work is available, delayed payments from cargo owners leave drivers and workshops short of cash.
That weakness is also reflected in accounts shared with Iran International, with Iranians describing cuts to spending on food, housing and medicine as savings run down and private-sector job losses spread.
Cheap parts bring expensive problems
Workshop owners are also grappling with replacement parts that they say are either prohibitively expensive or of poorer quality.
A local tradesperson told ILNA that original components for older European and American heavy vehicles had become difficult to obtain, leaving operators increasingly dependent on Chinese-made replacements.
“In the past, if you rebuilt a Volvo or Mack with original parts, it could run for years without another major repair,” he said. “Now poor-quality parts mean repeated breakdowns.”
Original parts can still sometimes be found, he added, but at prices that often make them uneconomical for truck owners already dealing with loans, insurance and weaker freight income.
The result is a cycle in which operators choose cheaper parts, suffer more frequent failures and return to workshops while having less money available to pay for the repairs.
Skilled jobs come under pressure
The downturn is beginning to affect hiring and job security.
A machining workshop may employ 10 to 12 people repairing engine blocks, crankshafts and other heavy components. With business down and insurance, municipal charges and other expenses still rising, workshop owners may stop taking on workers or begin cutting staff, according to ILNA.
“A workshop with 10 or 12 workers may no longer want to expand its workforce and may even reduce the number of employees because its income cannot cover its costs,” a local business owner said.
The impact could outlast the immediate downturn. Training an experienced technician can take about a decade, he said, but workshops have less incentive to bring in apprentices when they are unsure whether they can retain existing staff.
Pressure reaches beyond Isfahan
The problems in Amir Kabir mirror a broader contraction in everyday economic activity as the government struggles with reduced oil revenues, sanctions and restrictions on trade.
US pressure has sharply reduced Iran’s access to foreign currency from oil exports, while sanctions evasion has become more costly. That has made imported equipment and raw materials harder to finance just as the rial’s fall raises their local-currency price.
For the workers and drivers in Isfahan, however, the crisis comes down to a simpler calculation: there is less work, while virtually everything needed to do that work costs more.
“If prices are going to remain high, then at the very least the volume of work has to increase,” a local tradesperson told ILNA. “Businesses need enough cash flow to keep operating.”
