The immediate consequences of the Israeli American war against Iran have altered not only the leadership structure of the Islamic Republic but also how the country and its international standing are perceived—both within Iranian society and among its extensive diaspora. The manner in which the bombings on Iranian territory were announced, carried out, and justified has had the predictable effect of pushing a significant segment of Iranian society toward nationalist positions, reawakening a spirit that has historically permeated the nation.

This was evident, in part, during the funeral of former Supreme Leader Ali Khamenei—an event attended by millions—as well as among the many Iranians who left the country at various points in their lives and subsequently joined the ranks of the opposition abroad.

However, while there is no question regarding the nationalism and unity of the country in the face of a Western threat, Iran’s economic situation continues to deteriorate, causing deep concern for families. Due to the U.S. naval blockade in the Strait of Hormuz and the sanctions imposed on the regime, the local currency—the rial—has lost roughly half its value since the war began seven months ago. With prices continuing to climb, wages and pensions are no longer sufficient to cover even basic living expenses.

The naval blockade and sanctions are dealing a severe blow to an already fragile Iranian economy; prior to the war, in January, inflation and the rising cost of living had fueled massive protests, which the regime suppressed with unprecedented violence.

During a meeting last month, National Security Advisor Mohsen Rezaei stated that economic conditions are worsening rapidly, noting that this is one of the most difficult periods the Islamic Republic has ever had to face. This is an unusual admission for the regime, which has, until now, largely denied the negative consequences of a war in which it claims to be the victor.

Information emerging from Iran is partial and controlled by the regime; however, in recent weeks, there have been reports of protests—currently limited in scale—by individuals who have not received full salary or pension payments from the state, as well as by students criticizing the conditions in university canteens. On social media, some employees—such as teachers and nurses—have stated that they have quit their jobs because their wages are no longer sufficient to live on; it has become more practical to pursue informal work or engage in small-scale entrepreneurial ventures.

Inflation remains very high, and the rial continues to lose value. It now takes over 2.5 million rials to buy one US dollar—compared to less than 1.5 million before the war, and approximately 800,000 in April 2025.

Blockades and sanctions are also affecting the pharmaceutical sector. Medicines in Iran have become significantly more expensive and, in some cases, impossible to find—though hospitals remain stocked for the time being. While Iran produces more than 80 percent of its required medicines domestically, it relies on foreign imports for a large portion of the necessary ingredients. Maritime shipments have become increasingly complex or even impossible, and the reduction in commercial flights—mandated by the United States—has cut off an alternative supply route.

Although medicines are not explicitly included in the list of products subject to US trade bans, importing them into Iran remains difficult; banks and financial institutions often refuse to process international payments, and transport companies frequently deem deliveries to Iran too dangerous. The deterioration of economic conditions is also accompanied by a diminished capacity on the part of the regime to block the transit of ships and oil tankers through the Strait of Hormuz: in September, oil exports returned to near pre-war levels, even though the price of oil remains significantly higher. Negotiations for a diplomatic solution have been at a standstill for months.

Furthermore, there is the latest threat from Trump: “No, I don’t think we are negotiating with Iran. Something will happen very soon.” According to The New York Times and Axios, the United States and Israel are, in fact, preparing plans for a new military offensive against the Islamic Republic—to take place following the midterm elections scheduled for November 3—all this after months of a negotiating stalemate.

Given these circumstances, Iran faces difficult times ahead from an economic perspective. One can only hope that, should such difficulties arise, they remain strictly economic in nature rather than humanitarian.

By Domenico Greco