Iran acknowledges war damage as trade slumps and leaders signal diplomacy and defiance
Iran's leaders have publicly acknowledged the economic strain caused by six months of war with the United States, saying foreign trade has fallen sharply and that the government must now focus on inflation, jobs and prices. The comments came on Saturday as Tehran also said it would continue to defend its interests and maintain control over the Strait of Hormuz. The statements amount to a rare admission of the scale of the damage while reinforcing a message that Iran does not intend to yield to pressure.
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President Masoud Pezeshkian said sanctions and a US naval blockade had caused exports and imports to slump by nearly 35 percent. He said Iran had still managed to sell about 90 million barrels of oil during a short-lived memorandum of understanding signed with Washington in June, when oil sales were briefly permitted. The government said reducing dependence on the dollar was also part of its response to the economic shock.
Supreme Leader Ayatollah Mojtaba Khamenei, who has not been seen publicly since the war began, called on the government to address what he described as a chain of economic and livelihood problems. In a written statement, he referred to inflation, unemployment and the management of prices and goods and services. Annual inflation reached 66 percent last month, according to the figures cited in the report, adding to pressure on households and businesses.
The remarks matter because they link battlefield developments directly to Iran's domestic economy and its wider regional posture. The Strait of Hormuz is one of the world's most sensitive shipping routes, and any disruption there can affect energy markets well beyond Iran. By pairing diplomacy with defence, Tehran is signalling that it wants room to negotiate while still asserting leverage over a strategic waterway.
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The war was launched on February 28, when the United States and Israel attacked, according to the report. Since then, the government has faced rising costs, weaker trade and growing public concern over daily living conditions. Residents in Tehran described a sharp deterioration in everyday life, with one woman saying she had been forced to find work to support her household and a food business owner saying trade had dried up as rents rose.
What remains unclear is how long the trade slump will last and whether the June understanding with Washington can be revived or expanded. It is also not clear how much room Tehran has to ease inflation and unemployment while sanctions and the blockade remain in place. For now, the government is presenting diplomacy and defence as parallel tracks, while warning that the economic fallout has become a central national issue.
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