Iran faces increasing economic pressure due to the repercussions of the war and US sanctions. This was rapidly reflected in a significant decline in the value of the riyal, an increase in the cost of imports, and an aggravation of the high-cost of living crisis.
These developments come as the government struggles to maintain the flow of revenues, amid restrictions on oil exports, and the tightening of the naval blockade on Iranian ports. The crisis has also affected vital sectors, with increasing complaints about weak salaries and delayed pensioners’ entitlements.
In an indication of the difficulty of the situation, Iranian officials acknowledged the deterioration of economic conditions. Both the Secretary of the Supreme National Security Council, Mohsen Rezaei, and the President of the Republic, Masoud Pezeshkian, warned that the rapidly deteriorating economy had pushed the country into one of the most difficult periods in its history.
This rare acknowledgment came during a high-level government meeting to discuss ways to achieve economic stability, after more than 7 months of war, according to what was reported by the New York Times.
Meanwhile, United Nations Secretary-General António Guterres is visiting Islamabad for 4 days, for the purpose of supporting Pakistani mediation efforts between Washington and Tehran.
Iranian President Masoud Pezeshkian said on Monday that negotiating with the United States is “useless,” as the war in the Middle East continues for the eighth month without any horizon for a settlement, despite diplomatic efforts made by several parties.
Pezeshkian said: “Our problem with the United States is that every time we come to the negotiating table, war is immediately imposed on us. So far, they have attacked us three times after the discussions, and this shows that they are not seeking dialogue. On the contrary, their goal is to overthrow the Islamic Republic of Iran.”
He added during his meeting with Armenian Foreign Minister Ararat Mirzoyan, according to what was reported by the official “IRNA” agency: “With an enemy that resorts every day to assassination, sanctions, pressure and threats, and reneges on its promises, negotiations become useless, and our nation will not accept this approach.”
The war in the Middle East broke out with a US-Israeli attack on Iran in February, while Tehran and Washington were conducting negotiations regarding the Iranian nuclear program.
The two parties concluded a memorandum of understanding in June, mediated by Pakistan, before it collapsed in July with the resumption of Iranian attacks on ships in the Strait of Hormuz, and the United States responded with military strikes on the Islamic Republic.
Since then, the negotiations have become deadlocked, and discussions between the two parties and the mediators on the sidelines of the United Nations General Assembly meetings in September did not lead to a breakthrough.
The United States has not launched any strike on Iran since September 1, but it has intensified its economic pressure and tightened the sanctions imposed on Tehran.
Iranian Foreign Minister Abbas Araqchi said on Sunday that “there is no military solution, and there is no solution based on new sanctions.”
The Strait of Hormuz has become the most prominent sticking point between Iran and the United States. Tehran has practically closed it since the outbreak of the war, which contributed to the rise in global oil prices. It adheres to supervising navigation traffic in the future, while the United States and several parties refuse to do so.
In return, the United States imposes a blockade on Iranian ports, and prevents Tehran from exporting oil, which constitutes a major source of its revenues.
A tanker was attacked while trying to cross the corridor, on Sunday, while another tanker turned back on Monday after receiving a warning from Iranian forces, according to what the British Maritime Trade Operations Authority (UKMTO) reported.
