A senior Iranian official has acknowledged that the nation’s economy is facing severe challenges, largely due to the ongoing war and the impact of U.S. sanctions. Mohsen Rezaei, secretary of the Supreme National Security Council and a former commander of the Islamic Revolutionary Guard Corps, made this statement during a government meeting focused on economic stabilization.
Rezaei described the current economic conditions as among the most difficult Iran has ever faced. His comments were reported by Iran’s IRNA state news agency. The meeting also included Iranian President Masoud Pezeshkian and other high-ranking officials. Following the acknowledgment of the economic plight, Rezaei indicated that the security council would offer any necessary support to address the issues.
This admission carries weight, as Rezaei is considered one of the hardliners within Iran’s leadership. He is seen as influential in decision-making, especially amid the uncertainties surrounding Iranian Supreme Leader Ayatollah Mojtaba Khamenei.
Prior to the war, Iran’s economy was already struggling, marked by deteriorating living conditions that sparked the largest protests in the country’s history. The situation worsened significantly with the commencement of the war, particularly after the launch of Operation Outcast in mid-August, an initiative described by former President Donald Trump as a pivotal point for the Iranian economy. Sanctions, a crackdown on illegal financial activities, and a persistent U.S. naval blockade have contributed to a catastrophic downturn.
The Iranian rial experienced an alarming depreciation, dropping significantly in value since mid-August. Currency trackers noted that the rial closed at 2.548 million rials per U.S. dollar recently, compared to 1.111 million a year ago, equating to a loss of nearly 59% in value over the past year.
The U.S. blockade has critically hindered Iran’s oil export revenues, which are vital to the economy. After a brief lifting of some sanctions in June, U.S. measures were reinstated in July. As of early September, reports indicated that Iran had not sent new oil shipments to its primary customer, China, for almost three months. Treasury Secretary Scott Bessent confirmed via social media that no crude oil was loaded onto tankers in September, emphasizing the blockade’s effectiveness on Iran’s economy.
In response to these economic challenges, Oil Minister Mohsen Paknejad, who had promised to navigate around the U.S. restrictions, tendered his resignation.
Despite efforts to maintain stability, the Iranian economy showed a decline of 10.1% in the first quarter of the Persian calendar year. The oil and gas sector was particularly affected, contracting by 26.4%. Meanwhile, inflation remained high, with the central bank reporting a year-on-year rate of 83.8% as of September.
The economic distress has led some government and private-sector employees to resign or protest due to inadequate salaries, and there have been demonstrations from retired government workers over unpaid pensions.
