A report by the Statistical Center of Iran reveals that the provinces of Kermanshah and Isfahan are facing the most economic challenges, topping the nation’s Misery Index. after five years of high inflation.
The index, which combines inflation and unemployment rates, is widely used to assess economic distress.
In Kermanshah, the Misery Index reached around 51%, while in Isfahan, it exceeded 49%, according to the report.
The high Misery Index figures show that Kermanshah and Isfahan had the highest combined rates during the summer, with inflation and unemployment more severe there than in other provinces. Isfahan’s situation is puzzling, given its status as an industrial hub.
While the exact reasons behind its high index ranking remain unclear, experts point to summer power shortages and an escalating water crisis as potential factors. These issues may have contributed to job losses in industrial and agricultural sectors, worsening the overall economic situation.
Reza Gheibi, an economic journalist, told Iran International that the economic hardship in Isfahan, an industrial hub, "rings an alarm for the entire Iranian economy".
He said: "The lack of foreign investment has led to decreased production and higher unemployment in the province."
U.S. sanctions imposed since 2018 have not only slashed Iran's oil export revenues and foreign trade but also undermined confidence needed for foreign investment.
The economic struggles are also evident in the inadequate minimum wage for the current year, which is set at around 109 million rials (over $170). This amount covers only 29.62% of the estimated cost of living for a typical household, calculated recently at about 368 million rials ($584) based on the official data.
The rising costs of essentials such as food, housing, healthcare, and education have made it increasingly difficult for workers to make ends meet.
Labor sociologist Pedram Ebadi describes the situation as a shift from poverty to absolute poverty for many workers. In his interview with Taadol website, he highlighted that most workers now live below the absolute poverty line, facing not only economic hardship but also job and income insecurity.
Ebadi argues that the government has failed to take meaningful action to address the growing poverty and has instead continued policies that do little to alleviate workers' struggles.
“Neglecting workers' livelihoods can lead to many other crises in society, including higher divorce rates, an increase in petty crimes, loss of work motivation—which could inflict irreparable damage on the country's growth and development—and countless other issues that cannot all be listed here,” he added.
Sanctions have played a significant role in elevating Iran's Misery Index. International sanctions, particularly targeting the oil sector, banking, and trade, have restricted Iran's access to global markets. It has resulted in reduced revenues and foreign currency shortages, sparking a weakening of the national currency, skyrocketing prices for essential goods, and increased inflation.
The sanctions, approved during a meeting of EU foreign ministers in Luxembourg on Monday, target seven individuals and seven entities involved in the transfer of military technology to Russia.
“Today’s designation includes individuals and entities responsible for the development and transfer of unmanned aerial vehicles (UAVs), missiles and related technology to Russia in support of its war of aggression against Ukraine, and to armed groups and entities undermining peace and security in the Middle East and the Red Sea region,” reads a statement by the European Council.
The EU's decision follows earlier warnings in March 2024, when the European Council indicated that any transfer of ballistic missiles by Iran to Russia would be met with punitive actions. The latest sanctions impose asset freezes, travel bans, and restrictions on financial transactions involving the designated individuals and entities.
The sanctioned parties include high-ranking officials and major organizations in Iran's defense sector, such as the Deputy Defense Minister Seyed Hamzeh Ghalandari and commanders from the Islamic Revolutionary Guard Corps (IRGC). Additionally, three Iranian airlines—Saha Airlines, Mahan Air, and Iran Air—were listed for transporting military supplies through transnational networks. Companies involved in the production of rocket propellants and other missile components were also targeted.
The EU has accused Iran of playing a destabilizing role beyond Ukraine, pointing to Tehran’s military support for armed groups in the Middle East. In May 2024, the EU had already expanded its sanctions framework to cover Iran’s missile and drone programs, targeting support for regional armed groups as well as Russia.
On September 13, 2024, the EU issued a strong condemnation of Iran's recent transfer of ballistic missiles to Russia. The states labeled it a direct threat to European security and an escalation beyond the earlier provision of Iranian UAVs and ammunition used in Russia's aggression against Ukraine.
The High Representative announced that the EU would act promptly and in collaboration with international partners, implementing new and substantial restrictive measures against Iran.
The UK also on Monday announced new sanctions targeting senior Iranian military leaders and organizations linked to destabilizing activities in the Middle East, following Iran's missile attack on Israel earlier this month.
The sanctions include asset freezes and travel bans on high-ranking figures from the Iranian Army, Air Force, and the IRGC Intelligence Organization, as well as restrictions on entities such as the Farzanegan Propulsion Systems Design Bureau and the Iranian Space Agency, both involved in missile-related technology.
Foreign Secretary David Lammy emphasized, "Despite repeated warnings, the dangerous actions of Iran and its proxies are driving further escalation in the Middle East. Following its ballistic missile attack on Israel, we are holding Iran to account and exposing those who facilitated these acts."
The new measures are part of a broader effort to isolate Iran economically and diplomatically. Last month, the United States, backed by intelligence shared with its allies, said that Russia received ballistic missiles from Iran for its ongoing conflict in Ukraine. In response, Washington imposed sanctions on the ships and companies implicated in the weapons transfers.
In light of the US accusations, Iranian President Masoud Pezeshkian asserted that his government has not transferred any weapons to Russia since taking office in August. However, a high-ranking EU official revealed that Iranian Foreign Minister Abbas Araqchi informed Borrell that Iran had supplied "short-range rockets" to Russia, capable of traveling up to 250 kilometers.
The Iranian minister clarified that the rockets were not classified as ballistic and did not specify when the transfer occurred, according to the EU official, who spoke on the condition of anonymity.
Meanwhile, discussions among EU nations are ongoing regarding the potential designation of Iran's Revolutionary Guards as a terrorist organization. A recent decision by a German court has provided a legal basis for such a classification, but EU members are still weighing whether it would be politically prudent to proceed with this designation.
Iran is also sanctioned by the EU in addition to nations globally for its nuclear program and human rights abuses at home, heightened after the Women, Life, Freedom protests in 2022.
According to Israeli intelligence analyst, Ronen Solomon, of the Intellitimes blog, the fire “consumed two metal factories that were engaged in the production of chips for parts of centrifuges and valves that can be used by Iran's nuclear industry”.
It is cited as Block D, the fires across two manufacturing plants for valve parts, compressors and pipes used in the gas industry, but which can also support uranium conversion and enrichment plants, Solomon assessed.
Iran's government-controlled media extensively reported the incident, but made no reference to any sensitive work being done in the "iron market" district.
The analysis came from satellite imagery and details on the companies operating in the complex.
Solomon cited the companies that operated in the complex as “Claniz”, a company that provides engineering design and engraving services for the production of centrifugal compressors and valves, and the "Easy Pipe" company for the production of valves and pipes for the gas industry.
Jason Brodsky, head of policy at United Against Nuclear Iran, said “there is a history of sabotage operations against AEOI workshops in the Shadabad area”.
Andrea Stricker, deputy director and research fellow at the Foundation for the Defense of Democracy’s Nonproliferation & Biodefense Program, noted that it comes amid the growing fears that Israel will attack Iran’s nuclear facilities.
US President Joe Biden has said he will not support such an attack, even in retaliation for the 181 ballistic missiles rained down on Israel earlier this month, but the latest findings suggest the Jewish state may have found a way round the issue.
"Israel reportedly not targeting Iranian nuclear sites in [an] upcoming counter-strike may simply mean no aerial bombing. Supply chain facilities mysteriously catching fire, exploding, sudden unexplained damage, might be a different story,” she wrote on X.
Stricker pointed to a powerful explosion that destroyed an advanced centrifuge assembly plant in Iran in July 2020, an event which was believed to be the result of Israeli sabotage.
“An attack by Jerusalem on one of Tehran’s key nuclear assets could foreshadow a covert action campaign designed to set back Iran’s nuclear program. The timing for such a campaign is opportune, since Tehran may hesitate to respond with force, lest it provoke the final collapse of the 2015 nuclear deal,” she wrote at the time.
The July 2020 attack destroyed the Iran Centrifuge Assembly Center (ICAC), located within the Natanz nuclear complex. The ICAC produces advanced centrifuges capable of enriching uranium at much faster rates than Iran’s older centrifuge design models. Today, this is being produced in increasing numbers, against the limits established by the 2015 nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA).
In 2021, according to a report by London’s The Jewish Chronicle, Israel used an Iranian network of agents to conduct sabotage operations against Iran’s nuclear facilities.
A large explosion in April that year inflicted major damage to the Natanz uranium enrichment site and was conducted by recruiting several Iranian scientists working in the complex, the report said. They had smuggled explosives into the highly secure facility and at the chosen moment the explosion was triggered remotely.
According to the report, 90 percent of the centrifuge machines enriching uranium were destroyed and the facility was put out of action for nine months.
In September that year, a weekly publication in Iran reported another fire incident in a military research center, calling it an “attack” by Israel to exert pressure on Iran.
The little-known Sobh Sadegh publication of the Islamic Revolutionary Guard Corps (IRGC) mentioned that a “self-reliance research center” west of Tehran was targeted by Israel in an operation similar to other attacks since July 2020, including the two explosions in the Natanz uranium enrichment facility.
The IRGC reported that a fire damaged one of its research facilities and three personnel were injured. Hours later, the announcement was deleted from its website and another version appeared saying that the fire was in the depot of the facility. Later, the IRGC said that two of its personnel died in the incident.
Israel has a history of totally destroying enemy nuclear capabilities, succeeding in both Iraq and Syria. But now, the Iran issue remains elusive in the face of a reluctant US battling to calm a hawkish Israel.
Mehdi Kharatian, who leads the Institute for Policy Revival, has led the criticism surrounding the weaknesses in Iran's security and intelligence infrastructure, highlighting what he described as a lack of serious response to Israeli activities, citing the killing of Seyed Razi Mousavi in Syria last December as a prime example.
Mousavi, linked to the Revolutionary Guards, was killed in a strike widely attributed to Israel. Kharatian criticized the response from Iranian intelligence agencies. “The day after the assassination, everyone was home by 2 p.m.” he said, implying that security forces did not treat the incident as a critical alert. "They just say Netanyahu wanted to fabricate achievements. But they should analyze why Israel decided to act at this moment."
The criticisms come as Iran faces a series of high-profile allegations involving intelligence officials accused of collaborating with Israeli agencies. Among the most recent cases is Esmail Qaani, commander of the elite Quds Force of the Revolutionary Guards, who was reportedly placed under guard and questioned as part of an investigation into significant security breaches.
Iran has officially denied the claims. Multiple sources told Middle East Eye that while Qaani remains alive and unhurt, his status reflects the growing concern over internal vulnerabilities.
Kharatian said Iran consistently underestimates Israel’s capabilities in information and cyber warfare. "Israel's upper hand in the information war casts a shadow over all our achievements," he stated.
Kharatian further accused Iranian intelligence of misallocating resources away from essential functions. He referenced a conversation with a deputy in the intelligence service, noting, "I pointed out the mistakes of the head of the intelligence agency… strategic mistakes were made." According to Kharatian, this included diverting funds to less critical areas, weakening the country’s capacity to respond to external threats.
The Iranian intelligence apparatus is also faulted for prioritizing internal surveillance over external threats like Israel.
Kharatian suggested that efforts have been focused on monitoring domestic dissidents, including high-profile figures such as Faezeh Hashemi, the daughter of a former Iranian president, or the vocal political commentator Sadegh Zibakalam, rather than countering Israeli operations.
"Either drop the 'Death to Israel' slogan or stop making it a hundredth priority in intelligence departments," he said.
The criticisms extend beyond intelligence agencies. Iran’s diplomatic stance is also under fire, with Kharatian pointing out the lack of an “Israel desk” in the Ministry of Foreign Affairs, something even countries like Pakistan maintain.
"We don’t even have an Israel desk," he said, emphasizing that the absence of a specialized diplomatic effort further highlights gaps in Iran’s approach to the Israeli threat.
Meanwhile, questions about intelligence competence have grown in the wake of recent incidents.
In July, an alleged Israeli airstrike saw the political leader of Iran-backed Hamas, Ismail Haniyeh, assassinated in the heart of Iran's security apparatus at an IRGC compound in Tehran.
Former Iranian parliament member Morteza Motahari publicly criticized security services for failing to protect the location. "The Zionists have always relied on terror, but how did they know his residence?" he wrote on social media.
Earlier this month, in an interview with CNN Turk, former president Mahmoud Ahmadinejad accused the head of a counter-intelligence unit assigned to identify Israeli operatives as himself a Mossad agent.
Ahmadinejad added that the official, along with others, leaked sensitive intelligence, including documents about Iran’s nuclear program, to Israel. These leaks, he suggested, influenced the Trump administration’s decision to withdraw from the 2015 nuclear deal.
Ahmadinejad alleged that an additional 20 agents within the Iranian intelligence team, assigned to monitor Israeli espionage activities, had also defected and were working against Tehran.
After the high-profile killing of Hezbollah leader Hassan Nasrallah, Iran's most powerful proxy, by an alleged Israeli airstrike in Beirut, the threats to Tehran's key circle have become ever more real, highlighting a series of intelligence shortcomings, including in the heart of Tehran.
Data obtained by Iran International from tanker tracking firms indicates that Iran loaded only 600,000 barrels of oil per day in the first 10 days of October, much less than the 1.5 million barrels shipments volume average in recent months.
Tanker tracking data shows a relative increase in the number of tankers at Iran's Kharg oil terminal after October 10. Armen Azizian, a senior oil risk analyst at Vortexa, told Iran International that while loadings have resumed, they are progressing much slower than usual. Recent estimates suggest that volumes have slightly increased to 800,000 barrels per day since mid-week.
The Kharg oil terminal, located in the western Persian Gulf, handles 90% of Iran’s oil loadings, particularly for Very Large Crude Carriers (VLCC) with a capacity of 2 million barrels. Observers have identified the terminal as a potential target for Israeli strikes.
According to a report, published by Vortexa, a slowdown at Kharg is already visible, with only two VLCCs loaded between October 1-10, compared to an average of 1.1 VLCCs per day in the first nine months of the year. Most of Iran’s oil, shipped despite US sanctions, are purchased by small Chinese refineries.
Iran had around 40 million barrels of floating oil storage, out of Persian Gulf in early October, enough to continue exports to China for only one month. Azizian said that during October 1-10, the floating storage has been declining as tankers, which held stored oil, are departing Iran.
It is still unclear whether the Kharg oil terminal is among Israel's targets. However, an attack on this terminal could cripple Iran's economy. Reports suggest that after Iran’s large-scale missile attack on Israel on October 1st, Tehran immediately withdrew its tankers from the Kharg Island to prevent them from being targeted by Israeli retaliatory strikes.
Informed sources have told some Western media that Iran has also made numerous confidential contacts with the regional Arab neighbors over the past week, asking them to urge the US to prevent Israel from attacking Iran’s oil facilities.
Soon after Iran's missile attack on Israel, the Iranian president traveled to Qatar, followed by a rare visit to Saudi Arabia by Iran's foreign minister.
Oil exports make up 65% of Iran’s government budget and 8% of its GDP. However, a recent report by Iran's Court of Audit revealed that in the first five months of the current fiscal year (March 21 to August 22), the government fell short of realizing a quarter of its projected oil revenues.
Additionally, tanker tracking data indicates that in August and September, Iran's daily oil exports dropped by about 300,000 to 400,000 barrels compared to previous months, falling to 1.4 million barrels per day. This suggests a deepening of Iran's oil budget deficit in coming months.
The reason behind this drop was the decline in oil demand from China, a country that purchases over 95% of Iran’s exported oil.
Iran has repeatedly threated regional and western states to blockade Persian Gulf’s Strait of Hormuz, where 20% of oil traded worldwide passes through.
Vortexa reports that with China now accounting for over 95% of Iran’s oil exports as its top trade partner, a blockade of the Strait of Hormuz is unlikely. “Such a move would trigger severe economic instability and jeopardize Iran’s vital relationship with China,” the firm stated.
From January to September, China imported 4.2 mb/d of crude via the Strait of Hormuz, accounting for 43% of its seaborne crude. This included n increased volume of Iranian oil as more Chinese refiners turned to Tehran’s discounted feedstocks to improve refining margins.