Iran International
Iran could face an economic contraction comparable in scale to the Great Depression in the United States, economists say, as the loss of oil revenue and wartime disruption threaten to drive an ailing economy into a deeper crisis.
Their assessments follow a prediction by US Treasury Secretary Scott Bessent, who told Iran International that Iran's economy would shrink by more than 25% between March 2026 and March 2027.
Iranian-American economist Ali Dadpay told Iran International that he found Bessent's forecast plausible, particularly as Tehran attempts to finance wartime spending by expanding the money supply.
That risks accelerating inflation and weakening the rial further, he said, creating a cycle of rising prices, falling purchasing power and declining economic activity.
Mohamad Machine-Chian, an Iran International economist, offered a stark comparison.
"The United States lost about 26% of its output in the Great Depression, over four years, from 1929 to 1933. Secretary Bessent is describing a loss of Great Depression size in twelve months," Machine-Chian said.
Iran's economy contracted by 21.6% in 1980, the first year of the Iran-Iraq War, World Bank data shows.
How much worse could it get?
Even the severe sanctions of 2018 and 2019 produced a smaller cumulative contraction of approximately 12%, despite oil exports plunging from about 2.7 million barrels per day to roughly 650,000.
Economic output was already approximately 10% lower in spring 2026 than a year earlier, according to figures from Iran's Statistical Center.
For the economy to contract by more than 25% over the full year, the decline would have to accelerate considerably.
Machine-Chian estimated that even with an 8% contraction over the summer, output would have to fall far more sharply during autumn and winter for the annual decline to approach Bessent's forecast.
The disruption of oil exports is central to that outlook. Energy intelligence firm Kpler reported no new Iranian crude loadings since late August, while revenue from earlier shipments is running out.
But the damage extends beyond the oil industry. Factories depend on imported materials, transportation companies require replacement parts, and businesses need financing to sustain operations.
As supplies and revenue dwindle, manufacturing, construction and other industries face further disruption.
The cost for ordinary Iranians
The economic deterioration is already visible in the price of everyday necessities.
Food prices in September were more than double their level a year earlier, according to Iran's Statistical Center. Eggs cost three and a half times as much, rice nearly twice as much, and official bread prices in Tehran have doubled.
“The minimum wage increased 60% this year while inflation approached 90%,” Machine-Chian said. “In dollar terms, a minimum-wage worker now earns approximately $61 a month, compared with $96 a year earlier.”
He also warned about savings being eroded. With the dollar costing two and a half times as much as a year ago, money held in rials has lost approximately 60% of its value against the US currency.
Further disruption to imports could bring shortages of medicines, industrial materials and vehicle parts, potentially forcing factories to reduce production or close and putting more jobs at risk.
Dadpay described a possible future resembling aspects of the economic crises in Venezuela and Zimbabwe, where severe currency depreciation and inflation pushed people toward dollars, gold, secondhand markets and barter.
As production declines and essential goods become harder to obtain, even those who remain employed could struggle to afford basic necessities.
Sanctions policy analyst Max Meizlish expects pension payments and civilian services to come under pressure as revenues decline, while military and security personnel could continue receiving salaries.
That could allow the Islamic Republic to preserve institutions central to its political survival even as living standards deteriorate.
Political consequences
Economic devastation does not necessarily translate into political collapse, particularly if Tehran can preserve its security institutions and access to financial channels abroad.
Washington has not fully targeted the Chinese financial institutions facilitating Iranian transactions, partly because of concerns about wider economic consequences, Meizlish said.
"It's just not clear that this level of economic constraint on its own will be enough to produce some sort of measurable political change," he said.
Dadpay argued that years of economic mismanagement and decisions prioritizing the survival of the political system had left Iran particularly vulnerable to the current crisis.
"As long as Islamic Republic is in place with this mindset, with this dynamic of decision-making, this is what's going to happen," he said.
For ordinary Iranians, the consequences are already evident in collapsing purchasing power, dwindling savings and rising prices.
Whether Bessent's forecast proves accurate or not, the economic damage could outlast the confrontation that has accelerated it.
Iranian authorities have arrested a female fitness blogger after videos showing women exercising without hijab at a Tehran sports exhibition sparked criticism from hardline media.
The judiciary's Mizan news agency said the woman was arrested on charges including propaganda against the state and offending public sentiment by publishing photographs and videos from the Fitex exhibition.
An arrest warrant was also issued for another person involved in planning the exhibition, Mizan said, without identifying either individual or specifying which images or videos prompted the action.
The fifth edition of Fitex, a fitness and sports equipment exhibition, was held from October 21 to 23 at Goftogoo Park in western Tehran.
Photographs and videos circulated on social media showed female athletes performing fitness routines and acrobatic movements, some without headscarves and others exercising to music.
Under Iran's mandatory hijab laws, women are required to cover their hair in public, including at sporting and cultural events.
The footage prompted criticism from hardline media outlets and supporters of the Islamic Republic, some of whom demanded judicial action against the organizers.
Hardline media demand action
The IRGC-affiliated Tasnim news agency criticized what it called "widespread violations of social norms" at the exhibition on October 25 and urged sports authorities and other institutions to intervene.
The Student News Network, affiliated with the student branch of the Basij militia, quoted one of its reporters as saying anyone viewing the images would experience "secondhand embarrassment."
As criticism intensified, Iran's Sports Ministry issued a statement on October 25 distancing itself from the event, saying neither the ministry nor Tehran's provincial sports authorities had organized the exhibition or granted it a permit.
Tehran prosecutors subsequently opened a criminal case against the organizers and others involved, citing alleged violations of legal and Islamic regulations, and summoned them for questioning.
Mizan said online pages associated with Fitex had been blocked as part of the proceedings and that investigations were continuing.
Restrictions extend to art exhibitions
The action against Fitex comes amid wider pressure on cultural activities and women's public appearance in Iran.
On October 26, Tehran prosecutors initiated legal proceedings against the organizers of Art Fair Tehran, also citing alleged failures to comply with legal and Islamic regulations.
Organizers were summoned to the prosecutor's office, while the exhibition's ticketing website and the organizer's social media account were blocked.
Earlier this month, the US-based Center for Human Rights in Iran said authorities were intensifying their crackdown on artists, writers, musicians and other cultural figures as part of a broader campaign to silence dissent and intimidate communities.
The rights group cited a source in Iran who linked the arrests of cultural activists to authorities' fears of renewed protests, particularly in economically disadvantaged areas amid worsening living conditions.
Iranian lawmakers are reviewing a new internet regulation bill that could expand authorities' powers to restrict online access, raising concerns over further controls after months of nationwide internet shutdowns.
The proposed Cyberspace Regulation Bill is being examined by a parliamentary committee, but its official text remains unpublished, Iranian news outlet Jamaran reported.
Parliament received the proposal on August 3, but lawmakers reviewing it have declined to disclose its provisions.
"A decision has been made not to publicize the details of the Cyberspace Regulation Bill for the time being," Rouhollah Abbaspour, spokesman for the parliamentary committee, said.
An unofficial 12-article draft circulating online resembles the controversial Internet Protection Bill, known as the Sianat plan, which stalled in the previous parliament. However, a committee member told local media that the version under review differs from the circulating text.
Lawmakers divided over restrictions
The proposal has drawn criticism within parliament, with some lawmakers questioning the need for additional controls when international internet access is already heavily restricted.
Mostafa Pourdehghan, a member of parliament's Industries and Mines Committee, criticized repeated attempts to restrict international connectivity and expand domestic alternatives, citing existing filtering, poor internet quality and rising costs.
Pourdehghan warned that further restrictions during wartime could increase public anxiety, particularly among young people, and predicted the bill would meet the same fate as the earlier so-called Protection Plan.
Lawyer warns of sweeping powers
Lawyer Kambiz Norouzi warned that the proposed legislation could give the Supreme Council of Cyberspace extensive authority while weakening government oversight.
In an editorial published by Shargh newspaper, Norouzi criticized Article 1 of the circulating draft, which designates the council as the highest authority for internet policymaking.
Article 6 would also allow internet access to be suspended or restricted on orders from judicial authorities or other competent bodies, without clearly identifying those additional authorities.
"This provision amounts to creating unlimited and unregulated power to violate fundamental freedoms and is certainly unconstitutional and illegitimate," Norouzi wrote.
Norouzi also argued that the bill would concentrate decision-making in an institution whose proceedings are largely closed to public scrutiny.
The official parliamentary text has not been published, leaving uncertainty over whether these provisions appear in the version under review.
Months of shutdowns and previous restrictions
The proposal follows months of internet disruption affecting millions of Iranians.
Authorities imposed a nationwide blackout on January 8, 2026, during anti-government protests. Connectivity was only partially restored before another near-total shutdown began on February 28 following the outbreak of war involving Iran, Israel and the United States.
The second blackout lasted 88 days, with international connectivity beginning to return on May 26.
Restrictions disrupted businesses, education and communications. Iran's Chamber of Commerce estimated direct economic losses at $30 million to $40 million daily, with indirect losses potentially doubling that figure.
The legislation follows years of attempts to expand state control over online communications.
The earlier so-called Protection Plan sought greater oversight of foreign platforms but stalled following public opposition.
In July 2025, President Masoud Pezeshkian's administration also withdrew a separate cyber censorship bill following criticism over its potential impact on free expression.
Authorities have continued developing the National Information Network, which allows selected domestic services to operate independently of international connectivity.
The Supreme Council of Cyberspace, established by former Supreme Leader Ali Khamenei in 2012, already plays a central role in internet policymaking.
For now, lawmakers remain divided over the proposal's prospects, while the refusal to release its official text has left its scope, legal implications and potential impact on internet access unclear.
Iran's acting oil minister Hamid Bovard is facing questions over his role in recovering billions of dollars in oil revenues and allegations of his brother's involvement in senior appointments, news outlet Rouydad24 reported on Wednesday.
The report follows the resignation of Oil Minister Mohsen Paknejad on October 4 and Bovard's appointment as caretaker minister, despite his previous responsibility for overseeing oil operations as managing director of the National Iranian Oil Company (NIOC).
The controversy has intensified following a debate hosted by the Revolutionary Guard-affiliated Fars news agency over billions of dollars in outstanding oil revenues, the performance of Persian Gulf Petrochemical Industries Company and the circumstances surrounding Paknejad's departure.
The debate raised questions about Bovard's appointment as acting oil minister, given his previous responsibility for overseeing oil sales as head of the National Iranian Oil Company, and whether he should also be held accountable for the failure to recover export revenues.
The criticism centres on the failure of intermediaries, commonly known in Iran as trustees, to transfer proceeds from oil exports back to the country.
Reports have put the outstanding revenues at several billion dollars, including an estimated $4.7 billion associated with sales during Paknejad's tenure.
Questions over family influence
Rouydad24 also raised questions about the possible involvement of Bovard's brother, Javad Bovard, in recent management appointments across the oil sector.
The outlet cited unverified reports and rumours suggesting that Javad Bovard may have influenced personnel decisions.
The National Iranian Oil Company has previously denied allegations that family connections were being used to secure business advantages, saying certain contracts dated back to the previous administration.
Among the appointments highlighted was Mohammad Salehi Dolabi's selection as managing director of Oil Exploration Operations Company (OEOC), an upstream oil services company.
Rouydad24 questioned the limited publicly available information about his technical qualifications and previous experience in exploration and drilling, saying the lack of transparency had contributed to concerns over the selection process.
Uncertainty over permanent minister
Bovard's appointment as caretaker minister does not guarantee that he will become the permanent head of the ministry.
Under Article 135 of Iran's constitution, President Masoud Pezeshkian has three months to nominate a replacement minister for parliamentary approval.
Rouydad24 identified several potential candidates, including former economy minister Masoud Karbasian, former minister Mohammad Shariatmadari and former Social Security Organization chief Mostafa Salari.
The report suggested Bovard could face competition from candidates with greater ministerial or managerial experience.
The unresolved oil revenues and questions surrounding senior appointments have placed the ministry's leadership under renewed scrutiny, with the government yet to announce its nominee for the permanent post.
A senior Iranian official said on Wednesday that Qatar had presented Tehran with ideas that were unacceptable rather than a new peace proposal, casting doubt on diplomatic efforts to end the US-Israeli war on Iran as Washington weighs further military action.
The unnamed official told Reuters that Tehran would show no flexibility on the nuclear issue, a key point of dispute in efforts to reach an agreement.
The remarks came hours after Reuters cited another unnamed official briefed on the negotiations as saying that Qatari mediators had presented Iran with a new draft agreement in Tehran on Sunday, with a response expected by the end of the week.
Qatar pushes seven-day agreement
According to the official briefed on the negotiations, the draft sets out a seven-day timeline to address concerns on both sides, requiring each side to take daily confidence-building steps.
The process could begin early next week, while several countries would act as guarantors of the agreement. The official also said there had been concerns ahead of Sunday's meeting in Tehran that Israeli Prime Minister Benjamin Netanyahu could resume attacks on Iran this week.
Trump leaves military options open
US President Donald Trump on Wednesday declined to rule out further strikes on Iran after the November 3 US midterm elections, saying "anything is possible."
"I can't tell you that," Trump told reporters at Joint Base Andrews in Maryland when asked whether he planned to attack Iran after the elections. "But anything is possible."
Trump said Iran wanted an agreement and might be waiting until after the elections, but warned that delaying a deal "is not going to help."
"We've decimated their military. We've decimated the finances. They have no money. They have inflation the highest in the world, 300 percent. The government is gone. But we'll see what happens," Trump said.
His remarks came as the Wall Street Journal reported that Washington had warned several Arab states in the Persian Gulf to prepare for a possible short, intense military campaign against Iran after the elections.
US and Israel prepare for possible strikes
The United States has sent warnings through diplomatic and military channels as Washington and Israel prepare for a possible new round of attacks aimed at weakening Tehran and pushing it toward negotiations, the Journal reported, citing people briefed on the discussions.
The US military is moving a Patriot missile defense system from Texas to strengthen regional defenses and has relocated troops from vulnerable bases in preparation for a possible escalation, according to the report.
US forces have also been replenishing munitions, while bombers and fighter jets are being prepared for potential operations.
An additional aircraft carrier strike group and a Marine expeditionary unit are expected to join roughly 20 US warships in the Middle East next month, although some vessels could rotate out, the Journal reported.
Trump has not made a final decision but is leaning toward a large-scale attack after the elections that could target Iranian infrastructure and nuclear facilities, the newspaper said, citing people familiar with his thinking.
Israel has also prepared plans and identified targets for possible strikes, while Netanyahu has pushed for renewed military action against Iran, according to the report.
The White House declined to comment on "sensitive military plans that may or may not exist," but said Trump "keeps all options on the table to ensure that Iran can never have a nuclear weapon."
Iran’s budget planners are considering oil at $130 per barrel for the next Iranian year even as the conflict driving global prices higher has severely restricted Tehran’s ability to export crude.
The scenario, reported by the IRGC-linked Fars News Agency, would put the assumed price at more than twice the $55 used in the previous budget and highlights an increasingly difficult calculation for Tehran.
Plan and Budget Organization chief Hamid Pourmohammadi said Sunday that Iran’s Economic Council had approved the directive for drafting the budget for the year 1406, which begins in March 2027, and that the bill would be submitted to parliament within a month.
He did not disclose the baseline oil price the government intends to use. Fars reported separately that the PBO was considering a scenario based on oil reaching $130 per barrel.
An agreement with Washington could ease restrictions on Iranian exports but push global oil prices lower. Continued conflict could keep prices elevated while making Iranian oil even harder to sell.
A $130 scenario
Global oil prices have risen sharply since the war involving Iran, the United States and Israel and the regional conflicts that followed, climbing from around $70 to roughly $117 per barrel.
Some Iranian oil-market commentators say prices could reach $130 if the conflict continues and Tehran and Washington fail to reach an agreement.
But Iranian budgets have traditionally used more conservative oil-price assumptions to reduce the risk of revenues falling short.
Tehran’s Haft-e Sobh newspaper described the $130 figure as a “shock,” while the economic news website Faraz Energy also reported that it was under consideration.
Iran’s ability to sell crude has been severely constrained by the US naval blockade and sanctions. The higher global price therefore does not necessarily translate into higher revenues for Tehran.
Disputed export figures
Iranian officials insist that oil continues to leave the country despite US efforts to stop exports.
Mohsen Zanganeh, a member of parliament’s Planning and Budget Committee, said Iran earned more than $11.5 billion from oil during the first four months of the year and achieved 85% of its projected oil revenue.
He also claimed that Iran continued to export at least 600,000 barrels of crude per day despite the blockade and sanctions.
The US military’s Central Command presents a sharply different picture, saying its blockade of Iranian ports has prevented at least $25 billion in crude exports and that no goods other than humanitarian supplies have moved by sea.
The competing claims from parties to the conflict have not been independently verified.
Iran’s oil infrastructure has also suffered serious damage during the war, while the government has resorted to rationing and other austerity measures to curb domestic energy consumption.
Risk of a shortfall
Hossein Selahvarzi, a former head of Iran’s Chamber of Commerce, warned in comments published by the economic daily Donya-ye Eghtesad that the greatest danger would be to prepare the 1406 budget as though Iran were facing a normal year.
Such an approach, he argued, could combine optimistic revenue forecasts with existing spending commitments, producing a deficit that would fuel inflation and discourage investment.
The uncertainty surrounding both prices and export volumes makes the eventual assumptions particularly important.
If $130 becomes the government’s baseline rather than merely one scenario, and either prices or export volumes fall short, Tehran would have to find other ways to close the revenue gap.
Those could include borrowing from the National Development Fund, selling government bonds or relying indirectly on financing from the Central Bank—measures that could add to inflationary pressure and further weaken the rial.
The government has yet to disclose which oil price or export volume it will ultimately use. But the $130 scenario illustrates the unusual calculation facing Tehran: the conflict that has made oil more valuable has also made Iran’s considerably harder to sell.
