By Lina Irawan 
Pezeshkian, often perceived as a relative moderate within the Iranian political establishment, made these remarks in a revealing interview with state media, Tasnim News Agency, on Friday. His comments signal a growing concern among some Iranian officials about the sustainability of the current economic trajectory and the potential for widespread social unrest. While signaling defiance against external pressures and crediting national unity for Iran’s resilience, his words painted a grim picture of the domestic situation, directly contradicting hardline narratives that often downplay the impact of international sanctions.
“We have many problems,” Pezeshkian stated, according to a Google translation of the interview. “There’s inflation, economic issues, employment and many other problems, but the people are with us.” This acknowledgment is particularly significant coming from a head of state, highlighting the severity of the crisis. Inflation has indeed soared to alarming levels, reportedly above 80% nationally, with prices for critical food staples skyrocketing by as much as 100%. This translates into immense hardship for ordinary Iranians, eroding purchasing power and pushing many families deeper into poverty. The International Monetary Fund (IMF) echoed these concerns in April, projecting that Iran’s economy would shrink by a staggering 6.1% this year, marking the worst contraction in decades and illustrating the profound depth of the economic crisis. Furthermore, a labor ministry official estimated a loss of over 1 million jobs by late May, exacerbating unemployment woes, particularly among the youth.
The economic pressure stems largely from the U.S. "maximum pressure" campaign, initiated after the Trump administration withdrew from the Joint Comprehensive Plan of Action (JCPOA), or the Iran nuclear deal, in 2018. This campaign reimposed and expanded sanctions targeting Iran’s oil sales, banking sector, and other key industries, aiming to cut off the regime’s access to foreign currency revenues and force it to renegotiate a broader agreement on its nuclear and ballistic missile programs, as well as its regional activities. The current administration has largely maintained these sanctions, even as it has sought to engage in indirect diplomacy.
Pezeshkian’s interview also contained an apparent, thinly veiled critique of Iranian hardliners who often prioritize military strength and reject any form of negotiation with the U.S. “We may have many things; we may even have missiles and bombs, but they are of no use” if the economy is in tatters and the people are suffering, he asserted. This statement suggests an internal debate within Iran’s leadership regarding the efficacy of its "resistance economy" strategy and the true cost of its confrontational foreign policy. It implies that military might alone cannot solve the nation’s fundamental economic challenges and that a shift in approach might be necessary to alleviate the burdens on the populace.
A critical component of Iran’s economic distress is the severe impact on its trade, particularly its ability to export oil and import essential goods, including refined fuels. Pezeshkian noted that imports are not coming into the country, specifically mentioning gasoline. Despite being a major crude oil producer, Iran lacks sufficient refining capacity to meet its domestic demand for gasoline and other refined products. Consequently, the U.S. naval blockade, which rigorously enforces sanctions by interdicting vessels suspected of trading with Iran, has not only prevented Iran from exporting its crude oil but also critically hampered its ability to import refined fuels. This has led to widespread shortages, long lines at gas stations, and a burgeoning black market for fuel.
The situation is further complicated by Iran’s deep fuel subsidies, which encourage excess consumption and drain government coffers. Pezeshkian acknowledged efforts to curb fuel demand and hike prices, but he also hinted at the political and social risks involved in such measures. “We shouldn’t make someone whose life revolves around gasoline suffer,” he explained, acutely aware of the potential for public backlash. “We shouldn’t put more pressure on those who are already under pressure. People are on the edge now; if I put more pressure on them, they might fall off the edge. We have to be careful that no one falls off.” This sentiment reflects the profound fear within the regime of igniting widespread protests, similar to those seen in November 2019 following a sudden fuel price hike, which were met with a brutal crackdown.
The President estimated that Iranian trade has plunged by 25%-35%, with imports down significantly more than exports. This figure is corroborated by external analyses. Trade intelligence firm Kpler, for instance, reported that Iran’s August crude export loadings had collapsed by more than 80% compared to a year ago, illustrating the devastating effectiveness of the U.S. sanctions and naval operations.
The U.S. military’s strategy in the region has been two-pronged: simultaneously tightening the economic chokehold on Iran while also ensuring the free flow of international oil through the Strait of Hormuz, thereby diminishing Iran’s traditional leverage over the critical energy chokepoint. U.S. Central Command (CENTCOM) reported on Friday that since the naval blockade was reimposed (referring to the intensified enforcement of sanctions and interdiction efforts), U.S. forces have redirected 82 commercial vessels, disabled three, and boarded two to ensure compliance with sanctions. These actions involve stopping, inspecting, and, if necessary, seizing cargo from vessels suspected of violating sanctions, effectively isolating Iran from global trade networks.
The Strait of Hormuz is one of the world’s most vital maritime arteries, through which approximately 20% of the world’s total petroleum liquids and 20% of global liquefied natural gas (LNG) pass daily. For decades, Iran has used its strategic position along the strait to threaten to close it in response to perceived threats or sanctions, a move that would send shockwaves through global energy markets. However, recent weeks have seen Tehran lose significant leverage as traffic picks up, especially via a southern route along Oman’s coast, which the U.S. military is actively securing.
Last week, CENTCOM announced that U.S. forces had completed clearing sea mines from the strait’s international shipping routes, a critical step in ensuring safe passage. While estimates vary on the exact volume of oil "leaking" through the strait, the consensus is that substantial volumes are now flowing, albeit still well short of pre-sanction levels. Goldman Sachs reported that total exports of crude and oil products from the region have risen to 15 million-16 million barrels a day. Kpler further indicated that oil flows from the Persian Gulf have recovered to around 70% of pre-war levels.
Crucially, U.S. officials told Axios that about 10 million barrels of oil a day are being transported out of the strait through the Omani corridor that the U.S. military is defending. This success is attributed to aggressive U.S. military operations, including a two-week stretch of bombing last month that degraded Iran’s radar and maritime surveillance systems. This degradation has made it significantly easier for tankers to sail through undetected at night with their transponders turned off. This tactic has allowed vessels to make "shuttle runs" in and out, unloading oil to other tankers that then deliver the cargo to customers, circumventing Iran’s surveillance and interdiction capabilities.
Despite Iran’s continued attempts to disrupt shipping through occasional attacks, these actions have proven insufficient to halt the overall flow of traffic. The U.S. military continues to proactively weaken Iran’s ability to close the strait. On Sunday, U.S. forces struck Iranian rocket launchers that were preparing to deploy sea mines in the strait, demonstrating a clear intent to neutralize threats before they materialize.
Gregory Brew, an expert on Iran and oil at the Eurasia Group, commented on X (formerly Twitter) on Friday that Iran had "overplayed its hand in July" when it resumed attacks on shipping in the strait’s southern route. Brew’s analysis suggests that this aggressive posture backfired, leading to a more robust U.S. response. “The result: the MOU is dead, the blockade is back in place, and the US is succeeding (to a partial, but notable extent) at reopening the strait without another deal,” he wrote. While "MOU" in this context likely refers to a tacit or informal understanding for de-escalation that may have existed, its demise signals a return to heightened confrontation. “Perhaps the status quo swings back in Iran’s favor, but right now this looks like a miscalculation to me,” Brew concluded, underscoring the strategic dilemma Iran now faces.
Pezeshkian’s open acknowledgment of the severe economic problems, combined with the U.S. military’s successful efforts to mitigate Iran’s leverage over the Strait of Hormuz, paints a picture of a nation under immense pressure. The internal divisions hinted at by the president, between those advocating for continued confrontation and those recognizing the devastating economic costs, suggest a critical juncture for Iran. The coming months will likely test the regime’s resilience and its ability to navigate both the crippling economic sanctions and the diminishing effectiveness of its traditional strategic threats.
