Despite U.S. sanctions and a maritime blockade putting pressure on its economy, Iran's leadership is shifting to a 'survival mode' to prepare for a prolonged struggle. The strategy focuses on maintaining essential goods and state functions rather than economic recovery, aiming to withstand U.S. pressure for as long as possible.
According to the Wall Street Journal (WSJ) on August 11, Iran is rationing scarce supplies and reducing foreign currency use and investment while maintaining imports of essential goods. Much of the burden of the economic crisis is falling on households.
The U.S. maritime blockade has dealt a severe blow to Iran's primary revenue source: oil exports. According to the British economic analysis firm Capital Economics, Iran's oil export revenue plummeted from $4.5 billion in June to virtually 'zero' in July.
Living conditions are rapidly deteriorating. The annual inflation rate has surpassed 80%, with chicken prices soaring by 190% and milk by 150% compared to a year ago. There are projections that the war's impact could lead to the loss of 2 to 3 million jobs.
Iran is prioritizing limited foreign currency for securing essential goods. It is providing $3.5 billion needed for imports of wheat, medicine, and powdered milk at a lower exchange rate than the market. Factories facing production disruptions due to power shortages are being allowed to operate even on holidays.
Support for low-income households has also increased. Measures include allowing essential goods to be purchased on credit and raising food purchase subsidies to prevent public discontent from worsening due to economic hardship.
The Trump administration believes that the economic difficulties will eventually bring Iran to the negotiating table. President Donald Trump recently cited high inflation and financial difficulties, asserting that 'the economic pressure on Iran is working.'
However, the WSJ noted that 'intensifying economic hardship may not immediately lead to concessions from the leadership.' The influence of hardliners has grown, and Iran has built an economic control system over decades of sanctions.
Hardy Kaulzadeh, a researcher at the Quincy Institute, stated, 'U.S. pressure is transforming the Iranian economy into a 'survival mode' that maintains only minimal functionality.' He added that even as economic pain increases, it is unlikely to exert enough pressure to change the leadership's security policies.
* This article has been translated by AI.
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