Six-month war deepens Iran’s economic crisis

**Six‑Month Conflict with the United States Exacerbates Iran’s Economic Crisis**

*Dubai/Cairo, 31 August 2026* – Iranian officials have warned that the ongoing six‑month war with the United States is deepening the country’s economic crisis, citing high inflation, a sharp decline in trade and intensified U.S. sanctions.

Supreme Leader Mojtaba Khamenei, who has not appeared publicly since an attack on 28 February that injured him and killed his father, former Supreme Leader Ali Khamenei, issued a written statement urging the government to take decisive action to address “inflation, unemployment, price management and the market for goods and services.”

President Masoud Pezeshkian said that Iran’s foreign trade had fallen by roughly 35 percent, a decline he attributed to U.S. sanctions and a naval blockade of Iranian ports. He noted that the country had sold about 90 million barrels of oil in a short period in June, following a temporary memorandum with the United States that allowed limited oil exports.

The war has reached its six‑month mark, while negotiations between Tehran and Washington remain stalled. The U.S. Treasury has intensified financial pressure, describing the measures as an “economic D‑Day.” Washington has warned that countries continuing to trade with Iran could face secondary sanctions, although it has refrained from imposing penalties on major Iranian trading partners such as China and India to avoid broader economic harm.

Recent Treasury actions include sanctions on Egypt’s Banque Misr for its dealings with Iran and restrictions that could limit the bank’s UAE branches from conducting U.S. dollar transactions. The Treasury also announced sanctions against a Hong Kong‑based entity and an individual linked to Iran’s Bank Melli.

Iran’s annual inflation rate reached 66 percent in July, further straining households. The country’s navy maintains that it controls the Strait of Hormuz, a vital waterway for global oil and energy supplies. U.S. military commanders have cleared sea mines placed by Iran’s Revolutionary Guard, while the Guard’s navy insists that ships require Iranian permission to pass.

Shipping data showed that only seven commodity vessels crossed the strait on 27 August, down from 17 the previous day and below the 10‑day average of 15.

Diplomatic efforts to end the conflict have involved Qatar and Pakistan, which brokered a brief ceasefire in June. Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani visited Tehran on 27 August to emphasize the need to restore normal shipping through the strait. Iranian Foreign Minister Abbas Araqchi described the talks as “creative,” though disagreements over the strait ultimately led to the ceasefire’s collapse.

The war’s economic toll continues to mount as Iran faces a combination of domestic inflation, reduced trade volumes, and escalating U.S. sanctions.

Article and image source: iranherald.com