Iran International political analyst
In recent weeks, the rising tensions between the Islamic Republic and Israel, along with the increasing likelihood of an Israeli military strike, have had negative impacts on Iran's economy.
The Islamic Republic's threats of igniting a regional war have caused significant turmoil in Iran's financial markets. On Saturday, the Tehran Stock Exchange index plunged by 24,000 points, falling to just above two million points. Meanwhile, the US dollar surged to near-record highs, and gold prices spiked, both serving as clear indicators of the escalating crisis.
Iran's economy has clearly felt the looming threat of war and responded swiftly. As the likelihood of an Israeli military strike increases, further spikes in the dollar rate and gold prices seem inevitable, heightening public anxiety about their financial survival.
The U.S. dollar has surged by nearly 10 percent since August, before Israel escalated its attacks on Hezbollah, prompting an Iranian missile barrage on October 1. While the IRGC missiles were ostensibly aimed at Israel, their true impact has been felt directly on Iran's economy, with ripple effects hitting domestic markets like daily economic bombs.
Iran’s economy hostage to foreign policy
In this situation, President Masoud Pezeshkian's government is similarly powerless to take effective action, as both war and sanctions are beyond its control. Economy Minister Abdolnasser Hemmati's calls for lifting sanctions to improve economic conditions are made with the full knowledge—shared by Hemmati himself—that this is impossible under current circumstances. Iran’s military and foreign policy decision are made by Supreme Leader Ali Khamenei.
Iran's economy has essentially become hostage to its foreign policy—a policy that is increasingly moving toward greater tension and conflict with the US and Israel. Not only is there no hope of lifting the sanctions, but new sanctions, such as those against Iran Air, have worsened the situation, leading to the complete suspension of Iran's flights to Europe.
Social discontent and public anger
Amid the ongoing economic crisis, protests from various sectors of society, including retirees and nurses, have grown, with people consistently voicing complaints about worsening economic conditions and their increasingly empty dinner tables. A central theme in these protests is the widespread anger toward the government’s neglect of domestic issues in favor of supporting groups like Hezbollah in Lebanon and Hamas. Many feel that, in the face of these crises and mounting economic pressures, the government has abandoned its own people, focusing on its regional proxies. This sentiment has further widened the gap between the public and the government, with anger and dissatisfaction clearly reflected in the protestors’ messages.
Failed attempt to assassinate Netanyahu intensifies tensions
Meanwhile, the IRGC and its proxy groups’ attempt to assassinate Israeli Prime Minister Benjamin Netanyahu has ended in failure. A drone attack on Netanyahu’s residence in Caesarea, between Haifa and Tel Aviv, was unsuccessful as neither he nor his wife were home at the time. This failure has intensified Israel’s anger, resulting in renewed threats against the Islamic Republic.
The incident raises a crucial question: Why have Israel and the US successfully targeted and assassinated numerous IRGC commanders and leaders of proxy groups, while the Islamic Republic and its proxies have not managed to eliminate even a single senior Israeli commander? The answer is the Islamic Republics technological inferiority.
In summary, as political and military tensions persist, Iran's economy is facing mounting pressure with no clear path to recovery. The Islamic Republic's foreign policy, focused on supporting regional proxy groups rather than national interests, has effectively held the economy and people's livelihoods hostage. Continuing with this foreign policy approach will not only fail to improve the situation but will further exacerbate the economic and social crisis.
The comments came during an interview with Turkey's NTV network on Friday, at a regional meeting in Istanbul.
Araghchi emphasized that any attack on Iran, particularly its nuclear facilities, would be seen as crossing a red line and would provoke a significant response.
"Any attack on Iran will be considered crossing a red line for us. Such an attack will not go unanswered. The necessary response will be given to any attack on Iran's nuclear facilities or any similar attack," Araghchi stated.
This latest rhetoric from Tehran comes amid escalating tensions between Israel and Hezbollah, Iran’s regional ally. On Saturday, a drone launched from Lebanon struck the seaside residence of Israeli Prime Minister Benjamin Netanyahu in Caesarea, an affluent town known for its luxury villas. Although Netanyahu and his wife were not present during the attack, the Israeli Defense Forces (IDF) confirmed that the drone, fired by Hezbollah, damaged a building in the area.
Netanyahu responded swiftly to the strike, accusing Iran and its proxies of being behind the attack and vowing retaliation.
"The attempt by Iran’s proxy Hezbollah to assassinate me and my wife today was a grave mistake," the Israeli leader wrote on social media platform X. "This will not deter me or the State of Israel from continuing our just war against our enemies."
In his remarks, Araghchi underscored Iran’s position on what it sees as Israeli and American aggression in the region. He pointed to the ongoing conflicts in Gaza and Lebanon, stating that Israel could not act in these areas without support from the United States.
"Israel cannot commit crimes in Gaza and Lebanon without the US. All the weapons used there are supplied by the US" Araghchi said during the interview.
The foreign minister added that Iran had not attacked Israeli civilian or economic targets, it had focused solely on military sites. He suggested that Tehran might not continue this approach if provoked. "We have not attacked the economic or civilian facilities... we have only targeted military facilities. Now we have identified all our targets there, and a similar attack on their targets will be carried out," Araghchi warned.
Israeli Prime Minister Netanyahu, meanwhile, has vowed that “anyone who tries to harm Israel’s citizens will pay a heavy price. We will continue to eliminate the terrorists and those who dispatch them,”
Iran’s Foreign Ministry Spokesman Esmail Baghaei denied Iran’s role in launching attack on Netanyahu’s residence accusing Israel of being built on lies.
“The Zionist regime has been formed on the basis of lies and distortion of facts. Spreading lies is the current and permanent practice of this regime and its criminal leaders”, the spokesman said.
Araghchi, participating in Friday's meeting of South Caucasus nations in Istanbul after a regional tour which took him to Jordan and Egypt, described the growing tensions in Lebanon as very worrying.
"The possibility of war in the region is always serious, and no one other than the Zionist regime wants that to happen. We want to reduce tensions, but we are ready for any scenario," he said.
These developments come at a time of heightened instability in the Middle East, with Israel facing threats from multiple fronts, including Hezbollah in Lebanon and Hamas in Gaza, both backed by Iran.
The drone, fired from Lebanon by Hezbollah, struck Netanyahu’s seaside residence, though the prime minister and his wife were not present. The Israeli Defense Forces (IDF) confirmed that a building was hit in Caesarea, an affluent town known for its luxury villas and ancient Roman ruins. Netanyahu’s office released a brief statement acknowledging the attack, followed by the prime minister’s vow of response.
"The attempt by Iran’s proxy Hezbollah to assassinate me and my wife today was a grave mistake," the Israeli premier wrote on X. "This will not deter me or the State of Israel from continuing our just war against our enemies in order to secure our future."
“Anyone who tries to harm Israel’s citizens will pay a heavy price. We will continue to eliminate the terrorists and those who dispatch them,” added Netanyahu.
Israel’s Foreign Minister Israel Katz echoed the prime minister's stance, stating that the attack "exposed Iran’s true face and the evil axis it leads." Katz added that Israel’s enemies "will pay a heavy price for any attempt to harm our citizens, soldiers, and leaders."
Houshang Hassan-Yari, a military expert, in an interview with Iran International, emphasized the gravity of the situation, noting that the IRGC (Islamic Revolutionary Guard Corps) has reached a point where it can launch such an attack. "The level of tension is rising," Hassan-Yari said, suggesting that this operation marks a shift in the IRGC's willingness to act directly. He indicated that the attack could lead to a broader conflict in the region.
It is not clear why Israel's sophisticated air defense system was not able to identify and shoot down a drone that flies relatively slowly.
“While this attack opens the path for a strike against Khamenei, the US can no longer prevent such actions to avoid escalation. Furthermore, no regional country would criticize such a strike. The involvement of the IRGC in Hezbollah’s activities has drawn attention to the possibility of a direct strike on Iranian officials,” added Hassan-Yari.
Mohsen Sazegara, a journalist and political analyst, also told Iran International that Saturday’s attack was carried out by the IRGC, which has assumed control of Hezbollah's operations following the assassination of its leader, Hassan Nasrallah. Sazegara suggested that the IRGC now has a direct intent to assassinate Netanyahu.
'Red lines crossed, Iran's regime closer to end'
Miki Zohar, Israeli Culture Minister, also said in a tweet in Farsi: "The Iranian attempt to assassinate the Israeli Prime Minister, even for a terrorist monster like Iran, whose hands are stained with the blood of thousands, is considered crossing a red line. The price Iran will pay will be deeply engraved in the history books. The end of Iran’s oppressive regime is closer than ever."
A spokesman for Iran’s mission at the United Nations in New York told the Wall Street Journal that the “action in question has been carried out by Hezbollah in Lebanon."
However, Middle East expert Menashe Amir believes that Iran may be trying to avoid further escalation. "Netanyahu’s remarks legitimize the targeting of Iranian officials," Amir told Iran International, adding that it remains unclear whether the focus would be on Supreme Leader Ali Khamenei, his son Mojtaba, or other key figures. Amir also noted that the attack on Netanyahu's villa could accelerate Israel's retaliatory plans, potentially leading to action before the upcoming US elections.
Amichai Stein, a correspondent for Israel’s public broadcasting corporation, reported that Israeli sources close to the prime minister have indicated a response is forthcoming, holding Iran responsible for orchestrating the attack through Hezbollah. Stein tweeted, "There will be a response to the drone attack against the Prime Minister's residence, and Iran, as the one behind Hezbollah, is also responsible."
This incident adds another layer of complexity to an already volatile regional situation, with Iran’s backing of Hezbollah now more clearly in the spotlight. As Israel prepares its response to Iran's October 1 missile barrage, the potential for further escalation remains high.
Musk, who has become a prominent supporter of Trump’s 2024 presidential campaign, has taken a more active role in US politics, particularly in matters involving the Middle East.
During the event, Musk delivered a speech that emphasized the threat he believes Iran poses to both Israel and the United States.
"You obviously can't have people who want to slaughter everyone in Israel. You’ve got to stop that. Those people either need to be killed or incarcerated, or they will simply try to kill more Israelis,” Musk said, addressing the crowd.
Musk linked the threat to the broader geopolitical rivalry between Iran and the West. “And they want to kill Americans too. Israel is referred to as the ‘little Satan’ and America, we are the ‘big Satan’, that's what the Ayatollah calls us,'" he added, reflecting concerns frequently expressed by US policymakers about Iran's rhetoric and regional ambitions.
The event comes as tensions remain high in the Middle East, particularly between Iran and Israel. Iran's ballistic missile attack on Israel on October 1 and Israel’s pledge to retaliate have drawn international concern.
Following Hamas's October 7 attack on Israel, Elon Musk urged Iran’s Supreme Leader Ali Khamenei to reconsider his anti-Israel stance. Musk posted on his social media platform, X, where Khamenei also has an account.
He stated, “Khamenei’s official position is clear that the eradication of Israel is the actual goal, not just supporting Palestinians,” adding, “That will never happen.”
Musk has not limited his involvement to speeches. His venture, Starlink, has played a role in providing internet access in countries experiencing conflict or state suppression. Musk first activated Starlink in Iran in late 2022 during widespread protests sparked by the death of Mahsa Amini, a young woman who died in custody after being arrested by the country’s morality police. The satellite internet service, according to Musk, was a tool to help Iranians bypass their government’s internet shutdowns and access global communication platforms during the protests.
However, the operation of Starlink in Iran remains fraught with challenges. While devices are smuggled into the country, it is potentially illegal given the government's policy of internet censorship, and those using it face risks. Musk compared the situation in Iran to Starlink’s deployment in Ukraine following Russia’s invasion, though the scale of operations remains much smaller in Iran.
Once seen as a tech innovator with libertarian-leaning ideals, Musk has now emerged as one of Trump’s most influential backers. His America PAC, largely funded by his own wealth, has poured millions into voter turnout efforts in swing states like Pennsylvania, Georgia, and Wisconsin. His financial contributions, coupled with personal appearances at rallies, are part of a broader strategy to mobilize conservative voters ahead of the November 2024 election.
As the 2024 US presidential election approaches, Musk’s words resonate not just in the political arena but also in international geopolitics, especially concerning the future of US-Iran relations and the security of Israel.