Iranian economist blames US for plunging rial under 'economic war'

In the reports, people highlight the increasing pressure on their livelihoods, complaining about the lack of response to their protests and the absence of effective measures to control prices.

One viewer, sharing a video, said that they had purchased only a few kilograms of potatoes, onions, and tomatoes, and the cost of these three items had reached 7,000,000 rials, approximately one-seventeenth of the average monthly Iranian salary.

The simultaneous surge in prices and worsening economic hardship, along with leaked reports of the Islamic Republic's financial aid to its supporters in Lebanon, has drawn significant attention from Iranian citizens.

One Iran International viewer, referring to the high food prices, said in a video: "The Iranian government gives money to the Lebanese, but does not care about its own people."

On Tuesday, Ali Khamenei, the Supreme Leader of the Islamic Republic, met in Tehran with leaders of Palestinian Islamic Jihad, who visited Tehran seeking financial assistance. Meanwhile, Hezbollah in Lebanon has been opening new branches of interest-free loan funds to distribute financial aid from the Islamic Republic.

Tehran has recently allocated more than $10,000 to each war-affected family in Lebanon to help cover rent and household expenses. This aid is distributed among Shiite Lebanese who are supporters of Hezbollah.

Naim Qassem, the newly appointed Secretary-General of Hezbollah, described the funds as a "gift from the Islamic Republic."

Inflation in Iran has reached an uncontrollable level, with the Iranian Statistics Center announcing that the country’s annual inflation rate for the 12 months leading up to February 2025 stands at 32%.

The Iranian currency, rial, has depreciated by more than 50% since September fueling annual inflation, which has hovered around 40% in the past five years.

Citizens hold the Islamic Republic and its policies responsible for their economic hardship and the rising cost of food and medicine.

Even Islamic Republic officials have acknowledged their inability to resolve the current crises.

President Masoud Pezeshkian referring to shortages in various sectors—including energy, which the government labels as imbalances—said:

"Do you think I have a magic box? No. Six months ago, I was walking in Parliament, and now I am the President."

Speaking at a meeting with officials in western Tehran on Thursday, Pezeshkian added:

"Everywhere we look, there is an imbalance—in water, electricity, gas, money, land, schools, and hospital beds. Demand is unlimited, and our capacity is limited."

Meanwhile, on Friday, Mohammad Jamalian, a member of Parliament’s Health Committee, said:

"Currently, 350 to 400 types of medicine are in short supply, and in the best-case scenario, such shortages will worsen within the next one to two months."

Iran’s Deputy Foreign Minister Kazem Gharibabadi announced on X that Mahdi Kiasati, who was jailed in the Netherlands at the US's request over alleged sanctions violations, will be returning to Iran within hours following the Dutch decision to reject his extradition. No further details were given.

At the same time, Dutch Foreign Minister Caspar Veldkamp held a phone conversation with Iranian Foreign Minister Abbas Araghchi, covering Tehran’s nuclear program and the ongoing territorial dispute over Abu Musa, Greater Tunb, and Lesser Tunb islands between Iran and United Arab Emirates.

"Spoke with Iranian Foreign Minister Araghchi about developments in the Middle East. Also highlighted Iran’s nuclear program and the window of opportunity for a new nuclear deal," Veldkamp wrote on X.

He also said that the Netherlands supports a peaceful resolution of the islands dispute through bilateral engagement based on international law.

The status of the islands has been a longstanding source of tension between Iran and the UAE. The islands have been under Iranian control since 1971, when Tehran took possession following the withdrawal of British forces from the Persian Gulf.

Iran insists the islands have always been an integral part of its territory, while the UAE claims that they were historically under the jurisdiction of the Qasimi sheikhs and that their claim transferred to the UAE upon its formation in 1971.

The conversation also addressed Iran’s nuclear program, with Veldkamp stressing the “window of opportunity” for a new nuclear deal. The Netherlands, alongside other European nations, has supported efforts to revive negotiations after the Trump administration’s 2018 withdrawal from the Joint Comprehensive Plan of Action (JCPOA) and its “maximum pressure” campaign of sanctions against Iran.

Since the US exit, Iran has gradually scaled back its compliance with the JCPOA, enriching uranium beyond agreed limits and restricting international inspections.

The call between Veldkamp and Araghchi comes as European nations continue to emphasize diplomacy amid growing tensions over Iran’s nuclear program.

Earlier this month, a German Foreign Office spokesperson reaffirmed that Germany, France, and the UK had held preliminary talks with Iran on its nuclear activities and regional issues. While Washington escalates its "maximum pressure" campaign, European allies remain committed to diplomatic engagement—keeping communication channels open despite Tehran’s hardened stance against negotiations with the US.

Republican congressman Mike Lawler (R-NY) and congresswoman Sheila Cherfilus-McCormick (D-FL) sponsored the Enhanced Iran Sanctions Act, which seeks to close loopholes in existing measures and further cut off Iran’s key revenue sources.

The proposed sanctions would cover banks, financial institutions, insurance providers, ship registries and pipeline operators connected to Iranian petrochemical exports.

Citing data from energy consultancy Kpler, Bloomberg reported this week that Iranian daily oil export flows to top customer China had strongly rebounded this month, President Donald Trump's first full month in office.

The unexpected rise comes after traders worked around logistical hurdles thrown up by previous US-led sanctions on the exports, the news agency reported.

Trump reimposed the "maximum pressure" campaign of sanctions on Iran from his first term which aims to bring Iran's oil sales down to zero.

The proposed bill would ban anyone engaging in significant transactions with sanctioned entities could face US prosecution under the SHIP Act, which targets Tehran's oil exports in defiance of US sanctions.

“Our regional partners and allies in the Middle East are counting on us to stop Iran before it’s too late,” Lawler said in a statement. “The new sanctions imposed in the Iran Enhanced Sanctions Act will give us a broader ability to quash Iran’s illicit oil trade for good.”

The bill also mandates the establishment of an interagency working group under the State Department to coordinate sanctions enforcement and an international contact group to improve multilateral efforts. It further introduces a rewards program for whistleblowers who report sanctions evasion.

The bill follows previous Iran oil sanctions legislation sponsored by Lawler, which became law last year.

With Lawler and Cherfilus-McCormick holding key positions on the House Foreign Affairs Committee’s Middle East and North Africa subcommittee, the bill is expected to gain bipartisan support.

Trump this month reinstated the so-called "maximum pressure" campaign on Iran from his first term, with the stated aim of driving its oil sales to zero.

Iraq’s oil minister announced on Monday that exports from the Kurdistan region would resume next week.

Sources cited by Reuters said Trump’s administration was a key driver behind the announcement.

Reuters cited two US administration officials confirming that the US had asked the Iraqi government to resume Kurdish exports. One of them said the move would help dampen upward pressure on oil prices, the report added.

"It's not only important for regional security that our Kurdish partners be allowed to export their own oil but also help keep the price of gas low," Reuters cited a White House official as saying.

Iran has been a major recipient of cut-price Kurdish oil. Last July, a Reuters report detailed how the closure of the pipeline transporting Kurdish crude to Turkey in 2023 led to an increase in oil smuggling to Iran, with an estimated 200,000 barrels per day being transported by truck.

In December 2024, Reuters also reported on a fuel oil smuggling network generating at least $1 billion annually for Iran and its proxies, which had flourished in Iraq since Prime Minister Mohammed Shia al-Sudani took office in 2022.

The US aims to cut this supply route as part of Trump's maximum pressure campaign, the report said.

"Washington is pressuring Baghdad to ensure Kurdish crude is exported to global markets through Turkey rather than being sold cheaply to Iran," Reuters cited an Iraqi oil official with knowledge of the crude trucking shipments crossing to Iran as saying.

Turkey’s Energy Minister Alparslan Bayraktar told Reuters that Turkey has not yet received any official notification from Iraq regarding the resumption of oil flows.

"We want to make ourselves available, providing technically sound alternatives to eliminate the possibility that Iran develops a nuclear weapon, to prevent Iran, or to help Iran prove that they don't want to develop a nuclear weapon," Rafael Grossi told reporters at Japan’s National Press Club.

"We hear the government say that. But as somebody said, we trust everybody, but we need to verify. So until we can have a very, very comprehensive watertight system of verification, we will not be satisfied."

Iran denies seeking a nuclear weapon but the United States assesses that it seeks such a capability and Israel sees its arch-foe wanting a bomb to destroy it.

The Atomic Energy Organization of Iran issued a statement shortly after condemning Grossi's remarks as biased and inaccurate, saying "the burden of proof is on the claimant.”

"The IAEA director general, as a senior official of an important international organization, is expected to speak and act impartially, professionally, and without political bias," it said.

"At a time when the United States and certain Western countries are attempting to misuse the IAEA to exert unjust pressure on Iran, such politically motivated and unprofessional statements could serve as a pretext for their illegitimate ambitions.”

Time may be running out for a peaceful resolution to the nuclear standoff.

The Wall Street Journal and The Washington Post reported last week citing US intelligence findings from last month that Israel saw an opening for an attack on Iranian nuclear sites as early as the first half of this year.

Iran is involved in ongoing negotiations with the so-called E3 European countries - Britain, France and Germany - who were signatories of a now largely defunct 2015 international deal over Iran's nuclear program.

Supreme Leader Ali Khamenei said on Monday that Iran could fend off an attack by its enemies, after rejecting an overture from Trump for a deal over Iran's nuclear program, which Tehran says is peaceful but Israel insists aims at building a bomb.

JCPOA

Despite calling his recent visit to Iran constructive, Grossi said, “Iran is not still cooperating as we would like them to do.”

Grossi described a 2015 nuclear agreement, or Joint Comprehensive Plan of Action, as outdated and in need of a replacement albeit with a similar philosophy of Western economic incentives exchanged for Iranian curbing of enrichment.

"I discussed this with the foreign minister of Iran, Mr. (Abbas) Araghchi, maybe what you can have is the same philosophy of JCPOA, which is tit for tat. Which is, I restrain my activities in exchange for incentives - financial, economical or otherwise. But beyond this, I think it is no longer applicable," Grossi said.

"The JCPOA is an empty shell," Grossi added. "The JCPOA talked about one type of centrifuges but they have much more. They are enriching at 60% or almost weapon level, so it is a completely different nuclear program.”

The 2015 nuclear deal, signed by the Islamic Republic and six world powers, was aimed to limit Iran’s nuclear ambitions in return for sanctions relief. However, during his first term, US President Donald Trump withdrew from the agreement in 2018, reinstating sanctions.

In response, Tehran reduced its commitments, and in 2020, its parliament passed a law restricting IAEA inspections beyond the Nuclear Non-Proliferation Treaty.