Drug prices were already climbing before the latest currency movement. In an August 28 interview, Hadi Ahmadi, spokesperson for the Iranian Pharmacists Association, estimated that prices had increased by an average of about 80 percent since the Iranian year began in March, with some products registering increases of 300 percent. These figures represent the association’s assessment rather than a published national price index. They do not establish an equivalent increase in every patient’s payment, which depends on insurance coverage, but indicate the burden confronting institutions expected to protect patients.

The connection between the dollar and the pharmacy bill is significant but uneven. Iran maintains multiple exchange rates, including subsidized currency for eligible pharmaceutical imports. An April announcement retained a rate of 28,500 tomans per dollar for qualifying pharmaceutical and medical imports, with the central bank supplying currency from government revenues associated with oil and gas exports. The free-market rate therefore cannot simply be used to calculate the cost of every imported medicine.

The crucial question is whether companies receive their allocations and can transfer payment to suppliers. A September 1 report by Mehr emphasized the distinction between approved foreign currency and usable funds. Domestic manufacturers also need imported ingredients, equipment and other inputs. Producing a medicine inside Iran does not eliminate exposure to currency shortages or international supply disruptions.

The widening gap between subsidized and other exchange rates makes access to preferential allocations increasingly consequential. A manufacturer forced to purchase inputs through a more expensive channel needs additional financing before producing its next batch. September’s dollar jump adds pressure to a system already struggling to absorb earlier increases, even where regulated prices do not change immediately.

The blockade creates a separate logistical constraint. Pharmaceutical ingredients and equipment must reach Iran through functioning transport routes, and replacing disrupted routes can require more time and money. Ahmadi warned that prolonged maritime restrictions would make alternative arrangements costlier and could eventually produce shortages. His warning concerned the sustainability of supply rather than demonstrating that all medicines were already scarce.

Health officials say alternative routes and emergency shipments have helped sustain supplies. Health Ministry spokesperson Hossein Kermanpour recently described measures combining strategic reserves, alternative suppliers, domestic manufacturing and the prioritization of essential products. Some reserves had been released to meet immediate needs, while emergency air shipments had entered when regular arrangements proved inadequate. These measures show that supplies are still reaching Iran, although they do not establish that substitute routes can deliver the same volumes at the same cost indefinitely.

Kermanpour also acknowledged that vulnerabilities predated the war. Delays in foreign-currency transfers, funding allocations and price adjustments had already strained pharmaceutical companies. Wartime transport restrictions, damage to factories and disruptions to raw-material supplies then added further difficulties. Companies waiting for funding have less flexibility to finance expensive alternative shipments, while longer delivery schedules complicate production planning.

Health Minister Mohammad-Reza Zafarghandi has similarly attributed rising costs to transportation, pharmaceutical inputs and packaging materials. In remarks reported earlier this month, he argued that restrictions on shipping and flights affect medicine supplies even when medicines themselves are described as exempt from sanctions. He maintained that shortages had not worsened relative to the period before the war, yet availability is also distinct from cost.

Patient advocates have described the consequences more directly. In an interview published by Iran Unfiltered on August 24, Amin Afshar, chairman of the Iranian Hemophilia Society’s board, told interviewer Maryam Shirinsokhan that severe shortages affected around 4,000 patients, including people with Factor XIII deficiency and severe von Willebrand disease. He described obstacles involving banking, shipment insurance, transportation, export approvals and companies’ fears of secondary sanctions.

Afshar cited an attempted donation by the World Federation of Hemophilia that, he said, never reached Iran because the necessary approvals were not granted—even though no commercial payment was involved. He also acknowledged domestic problems, including delayed currency allocations, insurance difficulties and bureaucracy. His account underscores how external restrictions and domestic failures can reinforce each other, with patients bearing the consequences.

Other patient representatives had raised similar concerns earlier this year. At an April 27 gathering, Ahmad Ghavidel, a former director of the Iranian Hemophilia Society, criticized the contradiction between declaring medicines exempt and restricting the shipping and payment channels needed to obtain them. Masoumeh Sadeghzadeh Boroujeni, the society’s managing director, likewise said banking and freight-insurance restrictions obstructed imports and access to newer treatments.

That discussion also demonstrated differences between patient groups. Younes Arab, head of the Iranian Thalassemia Association, criticized barriers to newer medicines and wartime transport disruptions, but said expanded insurance coverage had prevented increases in copayments for foreign thalassemia medicines at that time. Effective coverage can therefore protect patients even when underlying prices rise.

For people requiring repeat prescriptions, affordability remains a continuing concern. An increase can become a recurring household expense. Maintaining supplies through costlier routes may prevent shortages while leaving the financial burden unresolved. The response depends on how additional costs are distributed among suppliers, insurers, public subsidies and families.

The September 9 insurance announcement addresses part of that chain. Maryam Azadi, the Health Insurance Organization’s director for specialized and subspecialized services, confirmed that several rounds of medicine price increases had occurred since March. The latest revisions had been incorporated following notification from the Supreme Health Insurance Council. Her statement did not provide a breakdown of patients’ payments or explain whether those who had already paid higher charges would receive reimbursement.

Hossein-Ali Haji-Deligani, deputy chair of parliament’s Article 90 oversight commission, said revised prices for medicines including mercaptopurine and amphotericin B were reaching pharmacies before corresponding insurance coverage became operational. Patients were being required to pay the difference, potentially facing elevated expenses for as much as a month. He proposed updating insurance systems before pharmacies applied new prices. Patients needing continuing treatment cannot necessarily wait for those adjustments.

The issue becomes more consequential as officials debate pharmaceutical subsidies. Economy Minister Ali Madanizadeh has called for a support arrangement that would permit the removal of preferential exchange rates, with assistance reaching consumers through insurance under the Daruyar framework. Food and Drug Administration officials have cautioned against interpreting changes affecting certain production inputs as an immediate withdrawal of subsidized currency throughout the sector. The practical question is whether insurers can reliably deliver the protection reform requires.

Pensioners’ representatives are already questioning that reliability. Ali-Akbar Eivazi, secretary of Tehran province’s Social Security pensioners’ association, has described medicine prices and access as major difficulties for insured families. His criticism concerns Social Security, a separate insurer from the Health Insurance Organization. An adjustment in one system does not establish equivalent protection in another.

Pharmacies face another difficulty even after coverage is approved: collecting payment. In a September 5 statement, the Iranian Pharmacists Association said Health Insurance’s debts to private pharmacies stretched back ten months and urged the government to prioritize pharmaceutical funding. Pharmacies awaiting reimbursement must continue financing replacement stock. Rising prices make that gap harder to sustain.

The evidence points to a cumulative squeeze: currency instability raises financing pressures, the blockade complicates supply, and domestic payment delays undermine patient protection. Alternative routes need dependable funding, while expanded coverage requires timely reimbursement. Iranian authorities remain responsible for coordinating price changes and paying obligations. For families, the measure of success as external restrictions continue is whether the next prescription is both available and affordable.

Mojabi’s death has prompted remembrances of him as an unusually versatile cultural figure. Readers knew him through poetry, fiction and satire; artists encountered him as a critic and chronicler of modern Iranian art. His working life also extended through newspaper offices and literary magazines. His published work includes more than 70 books, spanning poetry collections, novels, short stories, plays, children’s literature and critical studies.

Born in Qazvin in 1939, Mojabi grew up in a family whose traditions included storytelling, religious oratory and journalism. In his autobiographical recollections, he described encountering newspapers from across Iran at his uncle’s home. He traced part of his enduring appetite for reading and writing to those early experiences, and connected his humor to a family culture of joking and verbal invention.

He later studied at the University of Tehran and worked in government before becoming a prominent cultural journalist. From 1968 to 1979, he served as cultural editor of Ettela’at, one of Iran’s major newspapers. He also contributed to literary publications including Ferdowsi, Jahan-e Now, Khusheh, Adineh and Donyaye Sokhan, where he also served as editor. His career crossed the 1979 revolution and continued through decades of change in Iran’s literary life.

For Mojabi, satire was a way of questioning power, including the authority exercised by society itself. In a 2011 interview, he explained that satire was dangerous because it challenged power, but stressed that power extended beyond government to public opinion, rituals and customs. Social habits and accepted beliefs, in his view, were also subjects for critical scrutiny.

His intellectual development was similarly grounded in the freedom to reconsider inherited ideas. In a 2017 interview, Mojabi described moving to Tehran for university as a period of personal transformation. Exposure to existentialist thought encouraged him to consider how he could choose his own life and values. He identified freedom, justice and the rejection of racial and gender discrimination as principles central to his outlook. He said he had initially studied law hoping to advance justice as a judge, though he ultimately did not pursue that profession.

Alongside his writing, Mojabi helped preserve the history of modern Iranian visual art. His two-volume Ninety Years of Innovation in Iranian Visual Art drew on years of research into the development of modern painting and sculpture. The work documented artistic experimentation across generations, providing a lasting resource for understanding the people and ideas that shaped Iran’s modern art.

Mojabi continued creating during his final illness. Drawings and paintings made during his hospitalization at Iranmehr Hospital were presented under the title The White Nights of the Hospital and Me. Those works add a personal dimension to the extensive record he leaves behind: even during treatment, he continued finding material for art in his immediate surroundings.

The National Iranian American Council (NIAC) extends its deepest condolences to Javad Mojabi’s family, friends and all those mourning his passing. We honor his more than six decades of contributions to Iranian literature and the arts, his dedication to preserving Iran’s cultural heritage, and the generosity with which he encouraged younger writers and artists. His poetry, stories, humor and scholarship leave an enduring legacy for readers and creative communities in Iran and around the world.

The latest exchange expanded the American campaign against Iran’s tanker fleet. U.S. Central Command said Saturday that it struck three Iranian oil tankers after the Islamic Revolutionary Guard Corps fired ballistic missiles at two American naval vessels. Admiral Brad Cooper, CENTCOM’s commander, explicitly linked the response to economic damage, signaling that firing at American warships would bring greater losses to Iran’s commercial fleet. Defense Secretary Pete Hegseth reinforced the threat, saying further Iranian attacks on U.S. vessels would be answered by destroying Iranian tankers.

That formulation broadens the retaliatory policy Washington had already begun implementing. Earlier attacks were described as a response to Iranian strikes on commercial shipping. The latest announcement also makes Iran’s oil carriers potential targets following attacks on American military vessels.

Iranian reporting placed one attack near Kharg Island, a major center of the country’s oil exports. Reports from the area described a tanker struck near the island’s anchorage, while Iranian state broadcasting said crews from two attacked tankers reached shore in lifeboats. One was reportedly empty and the other was carrying oil. The accounts provide a reminder that attacks intended to impose economic losses also expose civilian crews to the fighting.

Iran responded with additional attacks and warnings, although the results of its operations remain unverified. The IRGC said it targeted three tankers traveling through unauthorized routes in the Strait of Hormuz along with three other U.S.-linked vessels. It separately announced an attack on an American unmanned surface vessel attempting to enter what it described as a protected area. Iranian officials also claimed that attacks involving new anti-ship weapons forced American warships to withdraw. CENTCOM said a U.S. aircraft carrier and guided-missile destroyer successfully evaded multiple Iranian attacks and that no American personnel were harmed.

The capture of an advanced underwater drone Tuesday, announced by the Islamic Revolutionary Guard Corps-Navy, is a notable win for Iran that could allow the country to learn from the American technology and better counter certain U.S. military operations. The drone has been identified as an Anduril Industries Dive-LD, capable of performing operations over ten days and to a depth of 6,000 meters, with advertised capabilities including intelligence, surveillance and reconnaissance and mine warfare. The U.S. had not yet confirmed the loss of the AUV at the time of publication.

The U.S. lost an advanced RQ-170 Sentinel spy drone over Iran in 2011, with Iran claiming to have hacked the drone’s navigation system and guiding it down for a smooth landing. Iran went on to reproduce versions of the drone years later, and drones now form a critical component of Iran’s force projection. Like that capture, the Anduril AUV appears to be undamaged and intact, potentially allowing for significant intelligence and engineering advances.

Supreme National Security Council Secretary Mohsen Rezaei has now outlined the maritime component of the revised strategy he previously promised. In a televised interview Sunday, he announced plans for an exclusion zone extending from the area of the American blockade toward the Persian Gulf. Ships moving without Iranian authorization, he said, could be placed on a blacklist and face restrictions on subsequent passage. He also threatened insurance consequences, although how Tehran would enforce those consequences remains unclear.

The IRGC navy added a more specific geographical warning Monday. Its political deputy, Ali Mohammadi, identified the vicinity of Oman’s Khasab port as the point beyond which ships disregarding Iranian arrangements could face attack. For vessels loading at Persian Gulf ports and then approaching Hormuz, Khasab is being presented as a threshold for onward passage through the strait. Mohammadi also challenged the safety of the southern route promoted by Washington, particularly at night, and instructed vessels to use Iran’s designated corridor.

Iranian lawmakers are pursuing restrictions through a parallel legislative process. Parliament’s National Security and Foreign Policy Commission approved a provision Sunday that would prohibit passage by vessels or cargoes linked to countries, companies and individuals imposing unilateral sanctions or taking hostile action against Iran. Commission spokesperson Hassan Ghashghavi said the armed forces’ General Staff would identify hostile actions, while the Supreme National Security Council would identify sanctioning parties. The provision remains a committee decision, not an enacted law.

Shipping data continues to show severe disruption through the Strait of Hormuz. Kpler figures reported Monday put the ten-day average at ten commodity vessels daily, the lowest since May, down from more than fifteen on Friday. Initial counts recorded two crossings Saturday and six Sunday; a subsequent update revised Sunday to eight and recorded seven Monday. Tracking can miss ships operating without transponders, but the available figures still indicate exceptionally limited traffic. They also demonstrate why announcements of either complete closure from Tehran or secure passage from Washington require scrutiny.

Tehran is simultaneously presenting maritime arrangements as a possible foundation for diplomacy. Rezaei said a proposed international shipping corridor with Oman was approaching signature and linked it to reciprocal commitments concerning safe passage and security for Iran. He argued that earlier reliance on intermediaries’ assurances had proved inadequate. His remarks suggest Tehran wants practical guarantees against renewed attacks, with control over shipping serving as a means of securing them.

Qatar’s renewed involvement provides a concrete diplomatic development. Foreign Ministry spokesperson Esmaeil Baghaei confirmed that a Qatari delegation met Foreign Minister Abbas Araghchi in Tehran to discuss reducing tensions. Araghchi also spoke separately with his Saudi and Turkish counterparts about regional developments and diplomatic efforts. On Tuesday, Qatar said it was working with partners, including China, to resume U.S.-Iran negotiations. The contacts show that mediation efforts are ongoing, although no breakthrough or new negotiating session has been announced.

Washington’s economic campaign is meanwhile reaching institutions outside Iran that handle its overseas revenue. On Friday, the Treasury Department sanctioned Turkey’s Golden Global Investment Bank and two subsidiaries, alleging that the bank helped move Iranian oil earnings from China through Turkey and offered banking services involving networks associated with the IRGC’s Qods Force. These are the American government’s stated grounds for the designations, rather than independently-established findings.

The banking sanctions seek to target a vulnerability distinct from the movement of oil itself. Exporting a cargo does not necessarily give Iran access to the proceeds. Restrictions on intermediaries can complicate payments and encourage other financial institutions to avoid transactions involving Iran, increasing costs even where trade continues. Rezaei insisted that Iran was both selling oil and receiving payment. That assurance addresses an important domestic concern, but does not establish how much revenue is available or how reliably it can be transferred.

Economic Minister Ali Madanizadeh’s visit to Moscow offered a more practical picture of the obstacles facing Iranian trade. Meeting Iranian businesspeople Monday night, he described obtaining essential goods from Eurasia, particularly Russia, as a priority. Traders raised problems involving foreign exchange, letters of credit for agricultural imports and long queues at Astara customs. Madanizadeh promised follow-up, including efforts to accelerate installation of inspection equipment. These complaints show that alternatives to maritime trade depend on functioning financial arrangements and border infrastructure as well as supportive relations with neighboring countries.

The pressure is also reaching Iranian households through fuel prices. Government spokesperson Fatemeh Mohajerani announced Sunday that gasoline purchased with station cards would rise to 10,000 tomans per liter beginning Tuesday, doubling that rate. She said the monthly allocations of sixty liters at 1,500 tomans and fifty liters at 3,000 tomans would remain unchanged. The government promised to use additional revenue to support livelihoods. The increase therefore falls on the higher-priced purchasing channel, rather than applying equally to every liter motorists buy.

Parliament Speaker Mohammad Bagher Ghalibaf acknowledged the domestic strain alongside his threats of stronger military retaliation. He identified currency volatility, inflation, unemployment and market management as urgent problems affecting livelihoods. People could endure hardship, he argued, but should not have to tolerate poor management. His remarks recognized that maintaining domestic support requires more than assurances about military capabilities: officials must also address the everyday consequences of the confrontation.

The energy costs are increasingly visible in the United States as well. Average gasoline prices reached $4.15 per gallon on Labor Day, a record for the holiday, while diesel reached an all-time high of $5.90. Disrupted shipping through Hormuz is one contributor, alongside other pressures including attacks on Russian refineries. Diesel costs have implications beyond motorists because trucking and freight networks pass higher fuel expenses through the wider economy. The figures demonstrate that the effects of constrained energy flows extend well beyond the immediate combat zone.

Attacks on Saudi energy facilities have added another complication to efforts to keep supplies moving. Saudi authorities said Tuesday that Houthi missile and drone attacks disrupted operations at some facilities and caused fires, with 73 people reported injured across the attacks. The Houthis described the operation as retaliation for Saudi airstrikes in Yemen.

For energy markets, the significance lies in the accumulation of risks across different parts of the regional system. The Saudi attacks do not establish that the kingdom’s main export routes or its East-West Pipeline have been disabled. They do, however, add uncertainty around energy infrastructure while shipping through the Strait of Hormuz remains sharply constrained. Iran’s efforts to preserve imports, Qatar’s mediation and mounting fuel costs all underline the same practical urgency: restoring dependable trade requires arrangements that protect vessels and infrastructure, alongside a reduction in the attacks that keep undermining them.

The letter explicitly supports an August 20 open letter from left-leaning activists outside of Iran, which described Iran’s political prisoners as caught between “two blades of a scissors” - repression by the Islamic Republic on one side and foreign military and economic pressure on the other. The original letter highlighted opposition to U.S. and Israeli military intervention and economic coercion, and opposition to executions, imprisonment and restrictions on political and civil society activity by the Islamic Republic.

That framing quickly generated controversy. Some critics argued that the “two blades” metaphor risked creating a false equivalence between the Iranian government’s domestic repression and a foreign military attack against Iran. The two, they argued, have different origins and objectives, and placing them side by side could blur responsibility for the war. Adding to the debate, some of that letter’s signatories asked to be removed as signers, suggesting they had not meant to sign.

Others worried about a different danger: that Iran’s position as a country under attack could push executions, political prisoners and restrictions on civil society into the background, particularly as wartime conditions strengthen the role of security institutions inside the country.

The new “Solidarity Beyond Ideological Camps” statement directly addresses that criticism. Its signatories argue that recognizing two forms of violence does not mean treating them as morally or politically equivalent. A government, they say, can simultaneously be the target of foreign aggression and the perpetrator of repression against its own citizens.

Most of the signatories of the new letter are based outside Iran, but the list also includes a notable group living inside the country. Among them are sociologist and former political prisoner Saeed Madani, teachers’ union spokesperson Mohammad Habibi, writer Reza Khandan, journalist Nasim Soltanbeigi and poet Hafez Mousavi. Other signatories inside Iran include former political prisoners, labor activists, writers and student activists.

Their participation gives the statement particular weight. Some of those signing have themselves experienced imprisonment or political pressure and are now publicly criticizing both state repression and a foreign war against their country.

That distinction is at the heart of their argument. The signatories of the new letter reject the use of human rights violations inside Iran as a justification for military intervention. But they also reject the idea that resisting the United States and Israel requires suspending demands for political rights inside Iran.

In their view, the war does not make executions, imprisonment or censorship less consequential, just as repression inside Iran does not make foreign military attacks more legitimate. The statement places this argument within a longer Iranian history. Its authors point to foreign interventions including Russian involvement in the bombardment of Iran’s first parliament after the Constitutional Revolution and the U.S.- and British-backed 1953 coup against Prime Minister Mohammad Mossadegh. They place sanctions and the current war within that broader historical experience of external intervention and pressure.

At the same time, they point to Iran’s history of state repression, particularly after the 1979 revolution, including executions, censorship and restrictions on political and civil society activity. The statement gives particular attention to Iran’s political left. Its authors argue that Iranian support for Palestinian rights and opposition to Western intervention long predate the Islamic Republic. Iranian leftist movements developed ties with Palestinian movements and participated in anti-colonial politics before the 1979 revolution.

Yet those same political currents became among the Islamic Republic’s earliest targets after the revolution, with many leftists imprisoned or executed. The statement specifically recalls the mass executions of political prisoners in 1988. The historical argument has a clear contemporary purpose: opposition to U.S. power and foreign intervention does not belong exclusively to the Islamic Republic, just as opposition to the Islamic Republic does not necessarily translate into support for U.S. pressure or military action. That question has become more difficult as the war has continued.

War tends to narrow political space and turn complicated political positions into questions of loyalty. Inside Iran, criticism of the government can become more politically risky when the country is facing foreign attack. Outside Iran, meanwhile, opposition to the Islamic Republic or its actions can be interpreted as support for militaristic approaches toward the country, including the ongoing war. The signatories are trying to resist that polarization.

That does not mean their position represents a new consensus among Iranians or even among opponents of the Islamic Republic. The controversy surrounding the original letter shows how divided Iranian political and civil society remains over the war, sanctions, foreign intervention and the future of the country.

Iran continues to be a dynamic country with a diversity of political views, both inside and outside the country. The authors of the new statement reject both the notion that opposition to the Islamic Republic requires support for the war and that resisting the war requires overlooking the abuses of the Iranian government. For them, the rights of political prisoners cannot be postponed until the war ends, while opposition to repression cannot become an argument for military intervention. The significance of the statement is therefore not that it resolves these divisions, but that it exposes a political debate inside Iranian civil society that is largely missing from international coverage of the war.

Iranian society is not neatly divided between supporters of the Islamic Republic and supporters of its foreign adversaries. There a broad political spectrum, including a current that opposes the government’s treatment of its critics while rejecting the idea that U.S. or Israeli military power can deliver political freedom to Iran.

That distinction matters for the United States as well. Human rights concerns in Iran have repeatedly become intertwined with debates in Washington over sanctions, military pressure and regime change. Iranian officials, meanwhile, have often used the threat of foreign intervention to portray domestic criticism as part of a broader campaign against the country.

For Iranian civil society, those competing pressures can make maintaining an independent political position particularly difficult. The new statement is an attempt to preserve that space. Its signatories reject using the suffering of Iranians either to justify foreign intervention or to excuse repression at home.

There is no reason to assume this position will become dominant. The war has exposed substantial divisions across Iran’s opposition, diaspora, civil society and intellectual communities, and the new statement is itself part of that disagreement rather than its resolution. But the presence of activists and former political prisoners still living inside Iran makes the intervention harder to dismiss simply as another diaspora debate.

Their message is ultimately straightforward: ending the war and defending political rights do not have to wait for one another. Iranians should not have to choose between protection from foreign attack and protection from repression at home.

“We kept Greater Tehran’s electricity stable during the war and the summer,” Mokhtar Vaezi - a labor activist representing contract workers at the company - told Iran’s ILNA news agency this week. He argued that officials who expect workers to maintain the stability of the power network should pay similar attention to the stability of their livelihoods.

The complaint comes at a particularly difficult time for Iran’s electricity system. The country entered the summer already struggling with a longstanding gap between electricity supply and demand, which has resulted in scheduled outages in Tehran and other cities. The war added another layer of pressure to a system that had little room to spare.

For the workers, however, the immediate complaint is about something that predates the fighting. Vaezi says contract workers carry much of the operational burden of the electricity system while receiving lower compensation and fewer benefits than direct employees. He also argues that intermediary contracting companies benefit from an arrangement that leaves workers with little influence over their employment conditions.

He challenged electricity companies’ argument that government regulations leave them little room to improve compensation. Iran’s electricity distribution companies have their own boards, he said, and those boards have some discretion over the allocation of resources. In his view, management has chosen not to use enough of that flexibility to improve workers’ livelihoods.

The dispute in Tehran is part of a much larger and longstanding argument over the use of contract labor across Iran’s public sector. The Iranian government says roughly 700,000 contract workers have been registered across government institutions. These workers can spend years working inside ministries, state companies and other public institutions while technically remaining employees of private contractors rather than the institutions where they actually work. The arrangement has generated years of complaints over job security, wages and benefits. Workers and their supporters in parliament have pushed for the removal of intermediary companies and direct employment relationships between workers and government institutions.

The issue has been before parliament since 2020. A plan intended to reorganize the employment status of contract workers was eventually approved by lawmakers, but its implementation stalled after objections from the Guardian Council and the Expediency Council’s High Supervisory Board. Government officials say some of those objections have been resolved, while others remain.

The Pezeshkian government has now chosen a more limited approach. Rather than converting hundreds of thousands of contract workers into direct government employees, the government has approved a new system under which their salaries and benefits will be paid more directly and subjected to greater government oversight. Executive agencies are required to register contract workers in a centralized administrative system, and payments to workers who have not been registered are prohibited.

Under the new arrangement, payments will be made through accounts jointly controlled by the government agency and the contractor, while competition among contracting companies is supposed to be limited largely to a management fee of around two to three percent. The stated goal is to reduce delays, increase transparency and prevent portions of workers’ compensation from being lost in the contracting process.

The government has begun moving the plan toward implementation. Aladdin Rafizadeh, Iran’s vice president and head of the Administrative and Recruitment Organization, said last week that contract workers would begin receiving their salaries directly in a manner similar to permanent and contractual government employees. The measure has also passed an important procedural hurdle. Parliament’s body responsible for reviewing government regulations approved the cabinet resolution in August, clearing the way for implementation of the new payment system.

But there is an important distinction between what the government has approved and what many workers have demanded: direct payment does not mean direct employment. Government officials say converting all 700,000 registered contract workers into direct employees is not currently possible. Zabihollah Salmani, deputy head of the Administrative and Recruitment Organization, has cited legal restrictions, including limits on government hiring and requirements to reduce the size of the public workforce. Formal government employment will also continue to generally require participation in competitive hiring examinations.

The financial implications are also substantial. Iranian reporting citing government estimates has put the potential cost of fully changing the employment status of contract workers at approximately 185 trillion tomans, adding another obstacle to a wholesale conversion of their contracts. That leaves the government trying to address some of the most immediate complaints without dismantling the contracting system itself.

The new rules could make a meaningful difference for workers if they prevent delayed payments, improve oversight and reduce the amount retained by intermediaries. But they do not resolve the broader questions of employment status, job security and disparities between workers performing similar jobs under different types of contracts.

For the electricity workers in Tehran, those longstanding grievances are now colliding with the demands of wartime. Electricity is one of the civilian systems whose importance becomes even more pronounced during a conflict. Hospitals, water systems, telecommunications, businesses and households all depend on a functioning grid. Electricity workers must also maintain and repair a network that was already operating under considerable strain before the latest fighting began.

That is what gives Vaezi’s complaint particular weight. He is not arguing that the war created the problems facing contract workers. He is arguing that workers who were already unhappy with their pay and employment conditions were nevertheless expected to keep one of the country’s most important civilian systems operating through the war.

The dispute also offers a different window into how Iran is absorbing the pressures of a prolonged conflict. Much of the discussion outside Iran about the country’s ability to withstand the war has focused on military capabilities: how many missiles Iran can launch, how much infrastructure has been damaged, whether its forces can continue retaliating and how long the government can sustain the confrontation.

But the ability of a country to function during a war also depends on much less visible systems, and on the people who operate them. For Tehran’s electricity workers, that means maintaining a strained power network while dealing with economic pressures and employment grievances that existed long before the first missiles were fired. The government has now begun addressing one part of those grievances by changing how contract workers are paid. Whether that will be enough is another question.

For Vaezi and the workers he represents, keeping Tehran’s electricity running through the war has strengthened the case they were already making: if their work is essential enough to rely on during a national emergency, they believe their livelihoods and employment conditions should be treated as essential as well.

U.S. Central Command said American forces struck Iranian air-defense systems, radar sites, maritime assets, mine-laying capabilities and communications facilities linked to the Islamic Revolutionary Guard Corps. Iranian officials said more than 40 locations across southern, western and central Iran were hit, with attacks reported in Hormozgan, Khuzestan, Kermanshah, Kerman and along the Persian Gulf and Gulf of Oman coasts. Iranian state television also reported a strike near the runway at Jiroft airport, although local officials said there were no casualties and the runway and airport buildings were not damaged.

The pattern of targets suggests that a major American objective was degrading Iran’s ability to threaten shipping through the Strait of Hormuz while locating and destroying the missile, drone and maritime systems Tehran can use to retaliate. CENTCOM specifically identified Iranian maritime assets, mine-laying capabilities, radar and communications systems among its targets, while U.S. reporting has indicated that anti-ship cruise-missile and drone launchers were also attacked.

Four members of the IRGC Aerospace Force were also reported killed in Kermanshah. Iranian authorities have not said what they were doing when they were killed or identified the specific target of the U.S. strike. But the timing raises an important possibility. Iran’s Aerospace Force was conducting missile operations against U.S. bases across the region that night, while Iranian authorities separately reported shooting down an American drone near Khomein. Taken together, those developments suggest U.S. drones or other surveillance and strike assets may have been operating over Iran as Iranian forces were launching their retaliation. It is therefore plausible that the Aerospace Force personnel killed in Kermanshah were operating or preparing a missile launcher when they were located and struck. There is not yet enough evidence to establish that, however, and it remains an analytical inference rather than a confirmed account of the strike.

The apparent strategy is significant. Rather than attempting a single decisive attack on Iran’s military, Washington appears to be trying to suppress the capabilities Tehran uses to impose costs on commercial shipping and American forces around Hormuz

The human cost inside Iran was also substantial. Iranian authorities reported military casualties in several provinces. In addition to the four IRGC Aerospace Force personnel killed in Kermanshah, local officials reported three Basij members killed on Lavan Island. In Khuzestan, provincial authorities said seven people were killed and eight wounded in strikes around Ahvaz and Aghajari.

The most serious reported civilian incident occurred in Kohestak, a coastal village in Sirik County in Hormozgan, where a U.S. strike hit a residential location hosting a wedding. The head of Hormozgan University of Medical Sciences said four people were killed - including two children, the youngest only four years old - and 65 wounded. Earlier Iranian reports put the toll at five dead and as many as 68 injured. Several of the wounded remained in intensive care, and images published by Iranian media showed civilian casualties, including children.

New evidence has raised additional questions about what happened. Open-source researchers geolocated the house where the wedding was taking place roughly 130 meters — about 430 feet — from a communications tower that was also struck. Imagery from the scene indicates that the residential building itself was hit, while weapons analysts examining debris reportedly recovered there have identified components consistent with a U.S.-made SLAM-ER precision-guided cruise missile, although that identification has not been officially confirmed.

Iranian officials have called the Kohestak strike a war crime. CENTCOM, responding to reports of civilian casualties, said it was aware of the incident and maintained that U.S. forces do not target civilians, but that Iran’s Islamic Revolutionary Guard Corps does. The United States has not yet publicly explained whether the residential building was itself a target, what it believed was located there, or how a precision-guided weapon came to strike a wedding gathering more than 100 meters from the communications tower that was also attacked.

Iran began retaliating within hours, and the geographical breadth of its response was notable. The IRGC and regular army announced missile and drone attacks against U.S. military positions in Jordan, Bahrain, Kuwait, the United Arab Emirates and Erbil in Iraqi Kurdistan. Regional governments confirmed incoming Iranian missiles or drones in several of those countries, although Tehran’s claims about the damage inflicted remain largely unverified.

One of the most consequential Iranian claims involved Camp Titin, a U.S. Marine Corps facility roughly 15 kilometers south of Aqaba on the northern Red Sea, close to Jordan’s borders with Saudi Arabia and Israel. U.S. military records show that Titin has long been used for American-Jordanian training, including exercises involving Marines, rapid-response forces and maritime infrastructure protection. The IRGC said it subjected the camp to a ballistic-missile attack and claimed American personnel were killed and helicopters and other facilities damaged. Jordan confirmed that 13 Iranian ballistic missiles entered its airspace, saying ten were intercepted and three landed in remote areas. U.S. officials, however, said there were no American casualties or significant damage at Camp Titin.

The missile attack on Jordan is therefore confirmed, but whether Iranian missiles penetrated the defenses and struck Camp Titin — and whether anyone was killed there — remains contested. There is not yet satellite imagery, casualty information or other independent evidence supporting Tehran’s claims of American deaths.

The choice of Titin nevertheless matters. Unlike the larger air bases usually associated with the American military presence in Jordan, Titin sits near Aqaba and has been used by U.S. Marines for training and maritime-security missions. Iran separately said it targeted facilities associated with American RQ-4 and MQ-9 drones at Prince Hassan Air Base. Taken together, the claims suggest Tehran was selecting different components of the U.S. military network in Jordan to do damage rather than simply firing missiles toward a single symbolic target.

Iran also expanded its response across the Gulf. The regular army said dozens of attack drones targeted radar systems and American positions at Al Dhafra and Al Minhad in the UAE and struck Sheikh Isa Air Base in Bahrain with Arash drones. Kuwait reported hostile drone activity, including a drone that caused a fire at a residential complex in Kuwait City. The extent of damage to U.S. facilities remains unclear, but the attacks demonstrated that Iran retains the ability to launch missiles and drones toward several countries simultaneously despite months of sustained military pressure.

Tehran is simultaneously making clear that the Strait of Hormuz remains central to its strategy. The IRGC said two tankers were damaged Wednesday after entering a mined route in the strait, although the circumstances have not been independently verified. That came after two supertankers carrying Saudi crude were struck while transiting Hormuz on Monday.

Iranian officials have increasingly made the connection explicit. Parliament Speaker and chief negotiator Mohammad Bagher Ghalibaf said this week that if Iran is prevented from exporting oil through the Persian Gulf, “no one will be able to export oil.” He warned that further tightening of what Tehran describes as the American maritime blockade would receive a military response.

The United States is now expanding that confrontation to Iran’s own tanker fleet. Axios reported, citing U.S. officials, that American drones struck the engine rooms of two Iranian government-owned oil tankers anchored off Iran’s coast during the latest operation. One U.S. official described the approach as a new “tanker for tanker” policy approved by Trump: Iranian attacks on tankers transiting Hormuz could be answered with attacks on Iranian tankers.

The apparent policy exposes a tension in Washington’s strategy: the United States says its operations around Hormuz are intended to make commercial passage safer and restore energy flows, but the logic of “tanker for tanker” might not deter Tehran from attacking other ships when its own tankers are effectively blocked from exporting. The U.S. blockade has already reduced Iran’s ability to export its own oil to a fraction of prewar levels. Destroying or disabling additional Iranian tankers therefore imposes another cost on Tehran without necessarily giving it a stronger economic incentive to protect the exports of neighboring oil producers.

Indeed, if Iranian leaders conclude that their own ability to benefit from an open Strait has largely been removed, attacking Iranian tankers could reinforce rather than weaken Tehran’s argument that other countries should not be allowed to export normally while Iran cannot. Whether the new approach deters Iranian attacks on shipping or gives Tehran another incentive to escalate around Hormuz will be an important test of the American strategy.

The threat has implications far beyond Iran. Saudi Arabia possesses one of the region’s most extensive systems for bypassing Hormuz through its East-West Pipeline to Yanbu on the Red Sea. But Saudi crude exports from its Persian Gulf and Red Sea terminals averaged only about 3.23 million barrels per day during the first 23 days of August, according to shipping data analyzed by Bloomberg - on track to be the lowest monthly level since the Iran war began. The previous wartime low was about 3.65 million barrels per day in May, compared with more than 6 million barrels per day of Saudi crude that historically moved through Hormuz before the war.

Saudi Arabia initially responded to the disruption by pushing much larger volumes through its roughly 746-mile East-West Pipeline to Yanbu, with flows reportedly rising to around 4.4 million barrels per day and at times approaching 5 million. But threats to Red Sea shipping have complicated Riyadh’s ability to rely on that route as a secure alternative, forcing exporters to balance the risks at both ends of the peninsula.

The broader lesson after six months of war is that bypassing Hormuz is much easier on paper than in practice. Even Saudi Arabia, with the largest alternative pipeline system, has not been able to fully insulate its oil exports from the conflict. When insecurity in Hormuz is combined with threats along the Red Sea route, disruption can follow Saudi oil regardless of which coast it uses.

That gives Iran leverage, but it also creates significant risks for Tehran. Iran’s Khatam al-Anbiya Central Headquarters warned regional governments Wednesday that cooperation with the U.S. military could bring “dangerous consequences,” while the Foreign Ministry called on neighboring states to prevent American forces from using their territory to attack Iran. Attacks involving the territory of Jordan, Kuwait, Bahrain and the UAE - and threats to Saudi shipping - can deepen tensions with governments that warned against the Iran-U.S. conflict and have supported a peace deal to end it.

Washington, meanwhile, is trying to match military pressure with its broader campaign of economic isolation to degrade Iran’s ability to enforce its position in Hormuz while restricting the commercial and financial networks that allow Tehran to sustain a prolonged confrontation. Treasury Secretary Scott Bessent said Wednesday that airlines, shipping companies and digital assets could become the next targets of U.S. measures against Iran. His message to governments and businesses, he said, was to “distance yourselves” from Tehran. Bessent also warned that companies doing business with the IRGC could face sanctions and said Washington was tracking IRGC-linked assets and financial structures around the world.

Iranian officials appear to be thinking in similarly integrated terms. Supreme National Security Council Secretary Mohsen Rezaei said after the latest attacks that Washington would soon see a “new Iranian strategy” on the battlefield, in diplomacy and in confronting the economic siege. He did not explain what that strategy would entail. But the emerging pattern suggests Tehran may be attempting to connect military retaliation, pressure on regional shipping and efforts to keep trade and financial channels open through Russia, China and neighboring states.

That effort was particularly visible during President Masoud Pezeshkian’s trip to the Shanghai Cooperation Organization summit in Bishkek. In his meeting with Pezeshkian, Russian President Vladimir Putin publicly acknowledged that Moscow was helping Iran through what he described as a “difficult period,” including by providing essential goods, and indicated that Russia would continue that assistance. Russian officials also said Putin and Pezeshkian discussed the Bushehr nuclear power plant in detail, with Russian specialists preparing to participate in scheduled maintenance there.

For Iran, this kind of assistance could be more important to its ability to endure a prolonged war than direct military support. Tehran’s challenge is not simply preserving missiles and launchers, but keeping essential imports moving and preventing the combined effects of war, blockade and sanctions from producing an economic breakdown. Russian supplies - alongside continued trade with China and Iran’s neighbors - could therefore become an important part of Tehran’s effort to withstand Washington’s strategy of military and economic attrition.

China has meanwhile sharpened its diplomatic criticism of military intervention. After Bishkek, Xi Jinping traveled to Egypt, where he and President Abdel Fattah el-Sisi called for an end to foreign interference in the Middle East. For Tehran, the important question is not whether China or Russia would join the war militarily - neither Iran nor its partners appear to be seeking that - but whether they can help Iran withstand U.S. pressure through trade, essential supplies, financial channels and resistance to broader sanctions enforcement. That kind of economic and diplomatic backing could make Bessent’s effort to isolate Iran considerably more difficult.

The United States faces an increasingly concrete constraint of its own: the depletion of key munitions needed to sustain the current war. Every large Iranian missile and drone barrage requires the United States and its partners to expend valuable interceptors, while repeated American attacks consume additional precision weapons. Washington’s strategy requires repeatedly locating and destroying Iranian launchers, protecting bases spread across several countries and defending commercial shipping over an extended period. The rate at which both sides can replace what they are losing and consuming is a critical part of the military balance.

That does not mean American air defenses have stopped functioning. Jordan, Bahrain and Kuwait all reported intercepting Iranian weapons during the latest exchange. But the depletion problem is real, acknowledged in Washington and directly relevant to the fighting taking place now. For Tehran, prolonging the conflict may therefore serve a military purpose even without defeating U.S. forces outright: forcing the United States and its regional partners to keep consuming scarce and expensive interceptors while maintaining a large defensive posture across several countries.

At the same time, Iran is paying a far greater direct price inside the country. American strikes are killing Iranian military personnel, damaging infrastructure and producing civilian casualties, while sanctions, disrupted trade and the continuing war compound pressure on an economy already under severe strain. Tehran’s ability to endure therefore depends not only on its missile arsenal but on whether it can prevent military and economic pressure from producing a broader breakdown.

Diplomatic hopes have dimmed considerably. Pakistan said Wednesday that it remains hopeful Iran and the United States will return to negotiations and said Army Chief Asim Munir’s visit to Tehran last week had produced “significant momentum” on the Hormuz issue. Iranian officials have repeatedly said Tehran would return to the previous understanding if Washington resumes compliance.

Trump, however, struck a very different tone after the latest attacks. He said he was not attempting to bring Iran back to the negotiating table and claimed he preferred the current situation, in which he claimed the United States had near-total control over the Strait of Hormuz and suggested Iran’s economy is collapsing. He asked when Iranians will rise up in revolt against their government.

The latest exchange looks less like the beginning of a decisive final phase than a continuing contest over endurance. Washington is betting that sustained military and economic pressure will eventually force Tehran to retreat. Iran appears to be betting that it can survive long enough to force Washington to do the same. For ordinary Iranians, American service members and civilians across the region, the danger is that testing those two assumptions will require a much longer and more destructive war.

The ten SCO members adopted the Bishkek Declaration alongside 27 other cooperation documents. The declaration condemned military attacks against Iran that it said had caused civilian casualties and significant economic damage, expressed condolences on the death of Iranian Supreme Leader Ali Khamenei, reaffirmed Iran’s sovereignty and territorial integrity, and called for the conflict to be resolved through political and diplomatic means.

It also addressed another major source of pressure on Tehran. SCO members rejected unilateral coercive measures outside the framework of the United Nations and World Trade Organization and warned about their effects on the global economy. They separately reaffirmed the right of states under the Nuclear Non-Proliferation Treaty to research, produce and use nuclear energy for peaceful purposes without discrimination.

For Tehran, the significance is that this was not simply another statement of support from China and Russia. India, Pakistan and the Central Asian members signed the declaration as well, despite having very different relationships with both Iran and the United States. Turkey, Saudi Arabia and Qatar are also dialogue partners of the organization, giving the SCO a political reach beyond the countries usually associated with Iran’s “look East” strategy.

While the SCO is not an alliance committed to defending Iran, it does complicate Washington’s effort to turn military and economic pressure into broader international isolation. Countries that the United States would need to make such a strategy effective are publicly opposing attacks on Iran and rejecting unilateral economic coercion.

Yet Pezeshkian’s most important message in Bishkek may have been that Iran wants to use that support to strengthen its position, not to close the door on the United States. Speaking as renewed fighting threatens to undo months of regional diplomacy, Pezeshkian returned to the Islamabad memorandum that briefly halted the Iran-U.S. war in June. He accused Washington of violating an agreement bearing President Donald Trump’s signature less than two weeks after it was reached, but added that if the United States returns to its commitments, Iran will “immediately” reciprocate.

The setting made that offer particularly significant. Pezeshkian was offering Washington a diplomatic off-ramp from a summit where some of the world’s largest non-Western powers were simultaneously backing Iran against military attacks and unilateral economic pressure.

His meetings on the sidelines reflected the same effort to preserve multiple options. Pezeshkian met Russian President Vladimir Putin, with both sides discussing bilateral relations and ways to expand cooperation. Before the meeting, Kremlin spokesman Dmitry Peskov had said Pezeshkian would likely brief Putin on developments between Tehran and Washington.

Pezeshkian also spoke briefly with Chinese President Xi Jinping for several minutes on the sidelines, while Foreign Minister Abbas Araghchi held a separate meeting with Chinese Foreign Minister Wang Yi. The absence of a full Pezeshkian-Xi bilateral meeting has prompted some Iranian observers to question whether relations with Beijing are developing as Tehran had hoped, particularly after Iran appointed a special representative to oversee ties with China.

But there is not enough evidence to interpret the brief encounter as a change in Chinese policy toward Iran. It is not publicly known whether Tehran sought a formal meeting, and Beijing has its own reasons to carefully calibrate its relationship with Iran, including its much larger economic relationship with the United States and an interest in avoiding unnecessary confrontation with Washington. China’s decision to sign the Bishkek Declaration backing Iran against attacks and unilateral pressure is itself an important counterpoint to suggestions of a broader rupture.

Iran also tried to move the SCO discussion beyond political declarations. Pezeshkian proposed creating an SCO bank, an export and investment insurance union, and an energy consortium - mechanisms that could, at least in theory, make trade and investment among members less vulnerable to outside pressure. The documents adopted at the summit also included an action plan for developing ports and logistics centers across SCO countries through 2030.

These proposals come as Washington intensifies efforts to pressure Iran’s trading partners. Tehran has increasingly looked to China, Russia and neighboring states for trade, transportation and financial connections that are harder for the United States to disrupt. The question now is whether the political support Iran received in Bishkek can be converted into practical economic arrangements that actually reduce the impact of U.S. pressure.

While positive for Tehran, opposition to sanctions does not necessarily mean governments will accept the costs of defying U.S. secondary sanctions. India and the Central Asian states have important relationships with Washington, and even China balances its relationship with Tehran alongside much larger global interests. The SCO also offers Iran no equivalent of a collective defense guarantee.

Still, the summit challenges two simplified narratives about Iran’s position after months of war: that Tehran can simply be isolated into submission, or that China and Russia provide an alternative bloc capable of insulating it from the United States. Neither is quite true. Iran has more diplomatic and economic relationships than the first argument assumes, but those partners have interests and limits of their own. Tehran’s response appears to be to use those relationships to make isolation more difficult and increase its bargaining power, while continuing to pursue a negotiated exit from the conflict. That was ultimately the message Pezeshkian carried to Bishkek: Iran has partners willing to push back against attacks and economic pressure, but it is still leaving Washington a path back to diplomacy.

Iranian officials gave a very different account. The governor of Qeshm told IRNA that two people were killed and several others wounded in the attack. Iran’s Foreign Ministry called the strike a violation of the country’s sovereignty, while the Revolutionary Guards promised retaliation.

That retaliation came quickly. The IRGC said ballistic missiles and drones were launched against U.S. military facilities at Jordan: Muwaffaq al-Salti Air Base in Al-Azraq and King Hussein Air Base. Iran said the strikes targeted aircraft positions as well as technical and maintenance infrastructure. Jordan said its air defenses intercepted eight missiles entering its airspace, while initial U.S.-linked reports said “nearly all” incoming missiles had been intercepted and that no significant impact had been reported.

Iranian media have circulated videos showing missiles reaching their targets, while other footage from Jordan appears to show Iranian ballistic missiles passing through air-defense fire before explosions near Muwaffaq al-Salti Air Base. Low-resolution Sentinel-2 satellite imagery published later Monday also appears to show at least one possible impact site inside the base. The imagery is not detailed enough to determine what was hit or the extent of any damage, and higher-resolution satellite photographs will be needed to establish that conclusively.

The emerging evidence nevertheless complicates the initial impression that the Iranian attack was almost entirely intercepted. Jordan said its air defenses intercepted eight missiles, while President Trump later said all but one Iranian missile had been intercepted, claiming that the remaining missile was not targeted because it was not headed toward anything significant. There is still no independent confirmation of the IRGC’s claim that the base suffered heavy damage, but the available evidence suggests that at least one Iranian projectile may have reached Muwaffaq al-Salti.

Iran’s regular army separately said it launched dozens of explosive drones toward Al Minhad Air Base in the United Arab Emirates, targeting locations where U.S. personnel and helicopters are stationed. The UAE denied that Al Minhad itself had been struck, but confirmed that its forces intercepted an incoming drone from Iran over Emirati territorial waters. Iran’s claim that the base was successfully hit has not been independently verified.

The Revolutionary Guards also announced Monday that they had shot down a U.S. MQ-9 Reaper over the Strait of Hormuz, saying the drone crashed into the Persian Gulf. Iranian media reported the claim widely, but the United States has not publicly confirmed losing the aircraft.

Yet the most consequential development of the weekend may not have been any of these attacks. The IRGC said Monday that an unidentified supertanker attempting to use what Tehran considers an unauthorized route through the southern Strait of Hormuz struck two naval mines, caught fire and was immobilized. Iran has not identified the ship, its flag or its owner. CENTCOM has disputed the account, accusing the IRGC of spreading false information to intimidate commercial shipping.

While the incident has not been independently confirmed, the warning accompanying the announcement was explicit. The IRGC told shipping companies that vessels must follow Iranian navigation rules and warned that ships attempting to use alternative routes promoted by Washington could face similar consequences.

That goes directly to the heart of the dispute that triggered the latest round of fighting. Washington says U.S. forces completed mine-clearing operations in international shipping lanes last week and insists that the waterway is open. Tehran says the United States cannot simply declare Hormuz reopened and maintains that ships must comply with Iranian rules to transit safely.

The behavior of commercial shipping companies suggests that, whatever the competing claims, traffic through the Strait of Hormuz remains far from normal. Reuters reported that visible commodity-vessel traffic through the strait fell to roughly five ships per day over the weekend. The real number may be somewhat higher because some vessels are switching off their tracking systems, but traffic remains dramatically below normal levels.

Oil markets reacted accordingly. Brent crude rose more than two percent after the Larak attack, returning above $90 a barrel. Higher energy prices are also feeding into a problem far removed from the Persian Gulf: persistent U.S. inflation. With American inflation still well above the Federal Reserve’s two-percent target, another sustained oil-price increase could further complicate the Fed’s choices and increase the economic costs of the war for Americans.

The renewed fighting is particularly striking because it came just days after the Trump administration signaled that economic pressure, rather than another major military campaign, would be the centerpiece of its next effort to force Tehran to change course. Treasury Secretary Scott Bessent said Washington expects to announce new secondary sanctions against Iran almost every week, beginning with financial institutions. He also said the United States would press other governments at the G20 to reduce their economic ties with Iran or risk secondary sanctions.

But the events of the weekend illustrate how difficult it may be to separate that economic campaign from the military conflict. Washington’s pressure strategy ultimately depends in part on reopening the Strait of Hormuz, while Tehran increasingly treats its ability to restrict the strait as one of its strongest remaining sources of leverage.

The risks are not limited to Washington. Iran has spent recent weeks trying to deepen cooperation with neighboring states while Pakistan, Oman and Qatar have worked to find a diplomatic formula that could restore safer navigation through Hormuz and create a path back toward negotiations. Even governments closely aligned with Washington have shown little appetite for an indefinite regional war. Attacking U.S. positions on the territory of those same neighbors complicates that strategy. Iran wants regional governments to resist American efforts to isolate it, but its retaliation now risks exposing those governments to the very conflict they have been trying to contain.

The UAE’s reaction illustrates the problem. Abu Dhabi accused Iran of violating its sovereignty after intercepting the incoming drone, even as senior Emirati officials continued to argue that the region needs a political rather than military solution.

President Masoud Pezeshkian appeared to acknowledge the risk of additional escalation before leaving Tehran Monday for the Shanghai Cooperation Organization summit in Bishkek, Kyrgyzstan. Iran, he said, “is not looking for war,” but would respond decisively to attacks, adding that continued instability ultimately harms every country in the region. President Donald Trump told Fox News that the United States would retaliate for Iran’s attacks on U.S. forces in Jordan. “We’re going to hit them hard,” Trump said. “There will be a response.”

A senior Iranian source with direct knowledge of Tehran’s decision-making then told Reuters that every new American attack would receive a response “dozens of times greater,” arguing that the strikes following the attack on Larak demonstrated that “no target in the region is beyond Iran’s reach.” The source also warned that conditions in the Strait of Hormuz would become more difficult for ships violating Iran’s navigation rules.

Yet the same Iranian source described the latest fighting as a “limited and contained confrontation.” Tehran appears to be trying to restore deterrence by threatening increasingly costly retaliation while still signaling that it does not necessarily want the latest exchange to become another sustained round of war.

In another provocative move, President Trump posted an AI-generated video depicting Kharg Island - the hub for most of Iran’s seaborne oil exports - being destroyed in a massive explosion. He posted separately, declaring that “Iran is officially a Failed Nation. IT IS DEAD!,” claiming without evidence that Iran had now killed 100,000 protesters and should be tried for crimes against humanity.

What began as Washington’s attempt to enforce its claim that Hormuz had been reopened now risks restarting the military escalation that the Trump administration had only days earlier suggested it wanted to replace with economic pressure. That leaves both governments confronting increasingly difficult contradictions. Iran wants to demonstrate that the United States cannot reopen Hormuz by force, while the United States wants to break Iran’s control by combining military and economic pressure.

The events of the past 48 hours suggest neither side has yet found a way to do that. The first direct U.S. attack on Iran in roughly a month has already produced Iranian strikes across the region, higher oil prices and explicit threats of another round of attacks from both Washington and Tehran. After several weeks in which regional diplomacy appeared to be creating some space between the two sides, the Strait of Hormuz has once again become the place where economic pressure, military deterrence and the risk of a wider war collide.

What makes Namjoo’s decision particularly notable is not simply the identity of the musician coming home. It is who Namjoo was when he left Iran, and the ongoing relationship between the Iranian government and the large Iranian diaspora.

Namjoo emerged from Iran’s underground music scene in the 2000s and became known for an unconventional mix of Persian classical music and poetry with blues, rock and jazz. He left Iran in 2007 and eventually established himself in the United States. Two years later, a Tehran court reportedly sentenced him in absentia to five years in prison over allegations of insulting religious sanctities through his use of Quranic verses in a musical performance. Namjoo said he had not intended to insult the Quran and had previously apologized over the recording, which he said was released without his authorization.

That history makes his return particularly striking. Iranian authorities have offered no public explanation of what happened to the old sentence, whether it remains legally relevant, or what assurances, if any, Namjoo received before returning. Nor has there been any announcement that he will be allowed to perform or release music in Iran. Namjoo himself has separated the decision to return from his professional future, saying that being home now takes priority.

Just one day before news of Namjoo’s return emerged, Culture and Islamic Guidance Minister Abbas Salehi described a broader government initiative aimed at reconnecting with prominent Iranians abroad. Salehi said his ministry had submitted more than 100 names of Iranian cultural, artistic and intellectual figures living outside the country as part of an effort to address obstacles that might prevent them from coming to Iran. Salehi said the initiative is not limited to permanent return. Someone might visit for several days, participate in a short-term program and leave again, or eventually move back permanently. The goal, he said, is to make different forms of return and engagement possible.

The initiative predates the latest war, but the experience of two conflicts appears to have given it greater significance. According to Salehi, the government intensified its outreach after the 12-day war, which officials saw as evidence that many Iranians abroad retained a strong attachment to the country despite their political, cultural or personal distance from the Islamic Republic. The process was disrupted by the subsequent 40-day war, he said, but the government intends to resume it as conditions stabilize.

Salehi said relations with the diaspora are becoming more open, with channels for dialogue and participation gradually expanding. That distinction - between attachment to the Iranian nation and support for the political system governing it - may be the most important part of the initiative.

For decades, Iran’s relationship with its diaspora has been marked by distrust. Millions of Iranians live abroad, including artists, academics, entrepreneurs and professionals whose relationship with the Islamic Republic ranges from engagement to outright opposition. For some, returning even for a visit has carried uncertainty about questioning, travel restrictions or old legal cases. Iranian political discourse, meanwhile, has often blurred the line between criticism of the government from abroad and hostility toward Iran itself.

Moreover, many individuals who have returned to Iran and thought they would not encounter obstacles have been blocked from leaving, arrested on dubious grounds and subjected to long and intense imprisonment. Several American citizens are believed to be held by Iran currently, including Kamran Hekmati and journalist Reza Valizadeh. These actions cast a long shadow and understandably deter many Iranians from returning to the country. Adding to this, many governments - including the United States - have warned about these dangers and explicitly recommend against travel to Iran under any circumstances.

Salehi’s comments suggest that at least part of the government is trying to reduce barriers to return. He said Iranians abroad should be respected except for those who “stand alongside Iran’s enemies,” while emphasizing that many expatriates had stood with their homeland during the recent wars.

But that formulation leaves a critical question unanswered: who decides where legitimate disagreement ends and “standing with the enemy” begins? Without clear legal guarantees and predictable procedures, government invitations alone are unlikely to erase the concerns that have kept some expatriates away.

The contradictions are already visible. Tehran is talking about greater engagement with Iranians abroad, and Parliament has passed legislation intended to support them. Yet journalists, students, artists and civil-society figures inside Iran continue to face restrictions, while a recently approved parliamentary measure on “countering foreign infiltration” has raised new concerns about contacts with foreign media, institutions and universities.

Iran is, in other words, trying to lower some of the barriers separating it from its diaspora while parts of the political system are simultaneously seeking tighter controls over interaction with the outside world. It is too early to know which tendency will prove stronger. There is also no evidence that Namjoo’s return resulted from the government’s list of more than 100 prominent expatriates. Neither Namjoo nor Iranian officials have publicly made that connection. His decision may be exactly what he says it is: a deeply personal choice to go home.

But it is difficult to separate his return from a broader question now emerging inside Iran: whether the experience of war can produce a different relationship between the Iranian state, Iranian society and millions of Iranians who have built lives abroad. The wars appear to have underscored an important distinction: many Iranians abroad who are critical of the Islamic Republic still feel a deep attachment to Iran itself. During the conflicts, disagreement with the government did not necessarily translate into support for attacks on the country or indifference to the suffering of people inside Iran.

For Tehran, recognizing that distinction could open access to an enormous pool of Iranian cultural, scientific and economic talent abroad. But turning emotional attachment to Iran into greater engagement with the country will require more than welcoming statements. It will require predictable rules, legal security and confidence that returning home does not depend on shifting political judgments about who is considered acceptable.

Namjoo’s arrival does not prove that such a change has taken place. The unanswered questions surrounding his own old court case are reason enough for caution. But a musician who once said he was prepared to face prison if he ever returned has now come home nearly two decades later, just as Tehran says it wants to reopen channels to prominent Iranians abroad. Whether Namjoo’s return remains an exception or becomes part of something broader may tell us considerably more about postwar Iran than the homecoming of one famous musician.

Iran is already under severe economic pressure, and Washington retains enormous leverage over international finance. Yet the experience of the war has exposed a potential obstacle to Washington’s strategy: Iran is surrounded by countries that have their own reasons to oppose cutting off a neighboring economy of 93 million people. Geography grants Iran a structural advantage against intense economic pressure. Iran has land or maritime boundaries with 15 countries, placing it among the states with the largest number of neighbors in the world. Its borders stretch from Turkey and Iraq in the west to Pakistan and Afghanistan in the east, the Caucasus and Central Asia in the north, and the Arab states across the Persian Gulf to the south.

That geography has often created security vulnerabilities for Iran, but in a campaign built around economic isolation it can also become an asset. A country connected to so many different markets, transportation corridors and political systems has more potential routes through which trade, humanitarian supplies and financial relationships can be redirected when one channel is closed. None can fully replace access to the global financial system or major commercial hubs such as the UAE, but closing all of them simultaneously requires Washington to secure cooperation from a remarkably diverse group of governments with very different interests.

The war has begun to demonstrate what that advantage can look like in practice. When maritime routes became more difficult, Iran turned more heavily toward rail and overland connections; when one commercial partner pulled back, other neighbors kept borders open, provided alternative transit routes or expanded cooperation.

Pakistan offers perhaps the clearest example. Even as Washington threatens countries maintaining economic ties with Tehran, Pakistan and Iran have been discussing how to expand them. The two governments have reiterated a target of raising bilateral trade to $10 billion, while working on barter arrangements, border markets, transportation and customs cooperation. More consequentially, Iranian and Pakistani officials have discussed using Karachi and Gwadar as alternative ports for Iranian trade with third countries, giving Tehran another potential route at a time when maritime access through the Persian Gulf remains constrained.

The discussions have continued through the current crisis. Iran and Pakistan held another meeting of their joint maritime and ports committee this week, while Islamabad has simultaneously emerged as one of the most important diplomatic intermediaries between Tehran and Washington. Field Marshal Asim Munir, Pakistan’s army chief, traveled to Tehran this week as part of those efforts. Pakistani officials said afterward that significant progress had been made toward finding a path back to negotiations. That creates an unusual contradiction at the heart of Washington’s new strategy: one of the countries the United States would need to help economically isolate Iran is simultaneously helping Tehran preserve alternative trade routes and trying to bring Iran and the United States back to the negotiating table.

Pakistan also demonstrates why the challenge is not purely economic. During the war, demonstrations expressing solidarity with Iranians and opposition to U.S. and Israeli attacks were held in several Pakistani cities. Dawn reported that hundreds gathered in Dera Ismail Khan in one such demonstration, joined by political and social groups. Jamaat-e-Islami, a major Sunni Islamist political movement, also organized protests against the attacks and in solidarity with Iran.

These demonstrations should not be interpreted as evidence that Pakistani society uniformly supports the Iranian government. It does not. But sympathy for Iranians, opposition to another regional war and hostility toward policies perceived as collectively punishing Iran can raise the domestic political cost of fully joining an American campaign to isolate the country. That distinction may become increasingly important as Washington attempts to turn financial pressure into regional policy.

Azerbaijan provides an even more striking example because its relationship with Iran before the war was anything but easy. For years, Tehran and Baku clashed over Azerbaijan’s close security relationship with Israel, regional transportation routes and mutual accusations of interference and security threats. At several points, the relationship deteriorated sharply enough to generate open warnings from both sides. Yet during the recent phases of war, that relationship moved in a different direction.

Azerbaijan sent humanitarian assistance to Iran. President Ilham Aliyev subsequently told Iranian President Masoud Pezeshkian that assistance would continue, while Pezeshkian publicly thanked Azerbaijan for its support during the conflict. Iranian officials have also said Azerbaijan helped keep transportation routes functioning and facilitated the movement of assistance from Russia into Iran.

Baku, for its part, publicly emphasized that Azerbaijani territory would not be used by another country to threaten Iran. The disagreements between Tehran and Baku have not disappeared, and it would be premature to describe the two countries as strategic partners. But the contrast is significant: a neighbor that had one of Iran’s most contentious regional relationships before the war became a source of humanitarian and logistical cooperation during it.

That experience was not unique to Azerbaijan. Turkmenistan sent medicines, medical equipment and other humanitarian supplies to Iran and kept its border crossings functioning. Iranian officials later credited Ashgabat with facilitating a humanitarian corridor that also allowed assistance from other countries to reach Iran. Armenia likewise sent medicines to Iran. Armenian Foreign Minister Ararat Mirzoyan described providing assistance to a neighboring country under such circumstances as natural, while Prime Minister Nikol Pashinyan had earlier said Tehran would not need to formally request assistance if Armenia saw a need it could meet.

This points toward a larger geographic reality: Iran’s northern borders connect it to countries that have their own economic and strategic interest in keeping trade routes open. While it cannot offset the entirety of Iran’s wartime losses, it is a considerable factor allowing Iran to weather intense military and economic pressure.

For the landlocked economies of Central Asia, the calculation can be even more concrete. Iran offers one of the region’s shortest routes toward the Persian Gulf and Indian Ocean. Central Asian governments have therefore continued pursuing transportation projects involving Iran even during the conflict.

One of the most striking examples came from Kazakhstan. In late June, Kazakhstan signed a 27-year agreement to develop and operate a logistics terminal at Iran’s Shahid Rajaee port, expanding a transportation corridor that would give Kazakh trade greater access to southern maritime routes. The significance for Washington’s strategy runs in both directions. Iran needs Central Asia as it searches for alternatives to traditional commercial routes. But Central Asian countries can also need Iran.

That makes economic isolation more complicated for Washington. In some cases, Washington is asking them to reconsider infrastructure, trade routes and investments designed around their own national interests.

Iraq presents another version of the same problem. The Iraqi economy is deeply connected to both Iran and the United States. Iran remains an important supplier and trading partner, while a post-invasion arrangement ensures that Iraq’s oil revenues are deposited in the Federal Reserve Bank of New York, providing Washington with enormous continuing leverage over Baghdad. Successive Iraqi governments have therefore spent years trying to maintain relations with both sides.

The war has made that interdependence even more visible. Iraqi officials have sought arrangements with Tehran to ensure Iraqi oil tankers can move safely through the Strait of Hormuz, with Iran granting special passage to Iraqi vessels following requests from Baghdad. For an economy overwhelmingly dependent on oil exports, Iraq now has a direct economic interest in maintaining a functioning relationship with Iran regardless of Washington’s broader strategy toward Tehran.

Domestic politics make the equation more difficult still. Iran remains deeply controversial inside Iraq, and years of Iranian political influence - including its longstanding relationships with Iraqi armed groups and political factions - have generated substantial resentment. But powerful Iraqi political and social constituencies also oppose the U.S. war and would resist seeing Baghdad transformed into an instrument for economically strangling its neighbor.

Opposition to economically isolating Iran should not automatically be interpreted as support for the Iranian government. Türkiye illustrates the same distinction from yet another direction. Ankara has substantial disagreements with Tehran and has worked to diversify some of its economic and energy relationships away from Iran. Yet when the war disrupted normal movement across the border, Turkish authorities kept commercial cargo moving through the three principal border crossings even while restricting ordinary passenger traffic.

For Türkiye, the question is not simply whether it agrees with Tehran. Iran is a large neighboring country connected to Turkish calculations involving trade, energy, border security, migration and regional stability. Economic collapse or prolonged warfare next door would create costs for Turkey that Washington does not have to bear directly.

This helps explain why the regional response to Iran’s isolation cannot be reduced to a binary choice between supporting Tehran and supporting Washington. Some of Iran’s neighbors may sympathize with Iranians suffering through the war. Others may oppose U.S. military action while strongly disagreeing with the Islamic Republic. Still others may simply conclude that cutting trade, transportation or energy connections with Iran would damage their own economies.

Often, all three calculations coexist. None of this means Economic D-Day cannot impose considerable harm. Nations may downgrade their levels of trade and cooperation under pressure, and workarounds may not be able to deliver the level of trade Iran needs to stay afloat.

But six months of war have demonstrated that Iran’s regional connections are not sustained only by ideology or support for the Islamic Republic. Iran cannot simply be removed from the map. That reality creates a choice for Washington. Economic pressure may provide additional leverage for diplomacy, particularly if Tehran concludes that the costs of continued confrontation are becoming unsustainable. But if the objective becomes the complete economic isolation of Iran, the United States will find itself asking neighboring governments to absorb significant economic and political costs of their own.

There is also a longer-term risk. The more difficult Washington makes Iran’s traditional economic relationships, the stronger Tehran’s incentive becomes to build alternative routes through Pakistan, the Caucasus, Central Asia, Russia and China and to develop financial arrangements less exposed to U.S. pressure. Economic isolation can weaken Iran in the short term while simultaneously accelerating its search for economic networks outside Washington’s reach, undermining the efficacy of pressure over the long term.

Whether Iran’s alternatives are significant enough to compensate for lost access to major financial centers remains an open question. Iran’s economic difficulties suggest they are not a 1-for-1 replacement, at least for now. But while Washington may be able to make Iran’s relationships with its neighbors more costly, making those relationships disappear is a much harder proposition. A country with 15 land and maritime neighbors has many doors to the outside world, and Washington will have to close far more than one of them to achieve genuine isolation.

The dispute erupted after Hossein Shariatmadari, editor-in-chief of the hardline Kayhan newspaper and a longtime influential voice among Iran’s conservative establishment, published a note addressed to Mohammad Bagher Ghalibaf, the parliament speaker who also leads Iran’s negotiating team with the United States.

Shariatmadari’s criticism was carefully framed. He described Ghalibaf as a committed revolutionary with a long record of service, but warned that some of his recent positions appeared - at least superficially - to overlap with those of reformists and figures Kayhan routinely labels “pro-Western.” He suggested that these groups were attempting to shift Ghalibaf’s political base and urged him to state his revolutionary positions more explicitly.

The message was difficult to separate from Kayhan’s broader campaign against the emerging diplomatic track. Days earlier, the newspaper accused senior Iranian officials of sending Washington “signals of weakness and passivity” by emphasizing the economic costs of the conflict and the desirability of ending the war. Kayhan specifically objected to arguments that Iran cannot indefinitely sustain military confrontation while its population faces severe economic pressure. In the newspaper’s telling, presenting Iran with a choice between war and negotiations - or between military strength and economic welfare - accepts a false framework created by Iran’s adversaries.

Ghalibaf has now answered publicly, and his response amounts to one of his clearest defenses yet of negotiations with Washington.

“Negotiations, in my view, have neither intrinsic value nor are they taboo,” Ghalibaf wrote. They are neither inherently good nor inherently bad, he argued, but become useful when they advance national interests, secure Iranian rights and preserve gains achieved through resistance.

More significantly, Ghalibaf rejected the idea that diplomacy and resistance necessarily stand in opposition. Negotiations conducted from a position of strength, he argued, can themselves constitute part of the struggle rather than a retreat from it.

His language remained firmly within the ideological vocabulary of the Islamic Republic. Ghalibaf stressed his opposition to “Westernization,” repeatedly invoked Iran’s military resistance and portrayed the United States as an enemy responsible for Iranian deaths. But within that framework, he drew a clear distinction between engagement and capitulation.

He also delivered an unusually pointed criticism of those attacking the negotiating process from the sidelines, arguing that refusing responsibility for negotiations while waiting to label any resulting achievement a betrayal amounts to political risk avoidance.

The exchange matters because Ghalibaf is not a reformist advocating rapprochement with the West. He comes from the Revolutionary Guard, has spent much of his political career in the conservative establishment and currently heads the team negotiating on behalf of the Iranian state. His argument therefore represents something more consequential than the familiar reformist case for diplomacy: it is an attempt to establish negotiations with Washington as legitimate within the political vocabulary of the Islamic Republic itself.

President Masoud Pezeshkian is making essentially the same case from a different political tradition. Speaking during a three-hour economic meeting at Iran’s Central Bank as the government confronts Washington’s new economic pressure campaign, Pezeshkian said Wednesday that Iran’s approach is to resolve disputes through “understanding, interaction and negotiations.” At the same time, he insisted that Tehran would resist economic pressure and argued that Washington would fail to achieve through sanctions what it had failed to accomplish militarily.

That combination - openness to negotiations alongside claims of continued resistance - increasingly appears to be the government’s preferred political formula.

It also comes as regional diplomacy accelerates. Field Marshal Asim Munir, Pakistan’s army chief, visited Tehran this week and met Pezeshkian, Ghalibaf and Supreme National Security Council Secretary Mohsen Rezaei. A senior official in Pezeshkian’s office subsequently described the visit as “very fruitful” and containing “very valuable diplomatic achievements,” adding that its results would soon become apparent.

Iranian reporting citing a source close to the negotiating team indicates that Munir heard Iran’s conditions for renewed negotiations and then conveyed them to Washington. That report has not been independently confirmed. Yet the same diplomatic activity that Pezeshkian’s office is presenting as productive is being portrayed very differently elsewhere inside Iran.

Kayhan on Wednesday described the visits by Munir and Omani Foreign Minister Badr Al Busaidi as part of a new American “deception operation.” It portrayed Munir as effectively carrying out a U.S. mission designed to lure Iran back to negotiations while Washington maintains military and economic pressure. The newspaper argued that it is Washington — not Tehran — that now needs diplomacy because of the costs of the conflict and disruptions surrounding the Strait of Hormuz.

The disagreement is therefore no longer simply about whether Iran should negotiate. It is increasingly about how Iran interprets the outcome of the war itself.

For Kayhan and like-minded hardliners, Iran emerged with significant leverage, particularly through its ability to disrupt navigation and energy flows through the Strait of Hormuz. From that perspective, returning to negotiations under American economic pressure risks giving away at the negotiating table what Iran paid heavily to obtain through military confrontation.

Pezeshkian and Ghalibaf are advancing a different argument: military resistance and diplomacy do not have to be mutually exclusive. Iran can claim that it resisted American pressure while still using negotiations to convert whatever leverage it possesses into an agreement that reduces the danger of renewed war and relieves economic pressure.

The economic costs of the confrontation are increasingly difficult to separate from the political debate over diplomacy. Pezeshkian made his latest appeal for negotiations not at the Foreign Ministry but during a Central Bank meeting focused on the currency, inflation, trade and household economic conditions.

The debate also complicates a common outside depiction of Iranian politics as divided neatly between officials who favor confrontation and those who favor accommodation. Ghalibaf’s position illustrates a third argument now taking shape: negotiations can be defended not as an alternative to resistance, but as one way of converting military leverage into political and economic gains.

Whether that argument ultimately prevails will depend significantly on Washington. Tehran’s internal advocates of negotiations will have a much harder time defending diplomacy if the United States demands terms that can easily be portrayed inside Iran as capitulation, or if economic pressure intensifies while negotiations proceed without tangible benefits.

Conversely, a diplomatic process that produces visible reciprocal steps could strengthen those arguing that Iran does not have to choose between defending its interests and negotiating with an adversary.

For ordinary Iranians, this is more than an ideological argument inside the political establishment. The outcome could help determine whether the country moves toward another cycle of military confrontation and deeper economic isolation, or whether the current regional diplomacy opens a path back toward an agreement. The striking development this week is that the argument for testing that path is no longer coming only from Iran’s reformists. It is now being made publicly by the president and by the conservative former Revolutionary Guard commander entrusted with negotiating on Iran’s behalf.

Those two tracks - economic confrontation and diplomacy - are now moving at the same time. Whether they eventually converge may determine whether Washington’s new campaign becomes leverage for an agreement or simply another escalation that imposes additional costs on ordinary Iranians.

Treasury Secretary Scott Bessent presented the new campaign in sweeping terms, promising to attack Iran’s remaining connections to the global economy and warning foreign governments and businesses that continued trade with Tehran could cost them access to the U.S. financial system. The measures announced Monday broaden potential sanctions in areas including shipping, aviation, technology, gold and digital assets, alongside sanctions against nearly 60 individuals, companies and vessels. Additional measures removed general licensing allowing colleges to enroll Iranian students, for Iranian Americans to send remittances to Iranians and for sports exchanges between the two countries to take place. Washington stopped short of immediately targeting major financial institutions that could make the campaign dramatically more disruptive.

That gap between rhetoric and action was significant enough for Reuters Breakingviews to argue Tuesday that Washington’s much-advertised “D-Day” had barely made it off the beach. Major Chinese and Emirati financial institutions were not among the initial targets, even though China remains Iran’s most important oil customer and both countries play significant roles in Iran’s remaining international commercial networks. Bessent has indicated, however, that a major financial institution could be targeted before the end of the week.

The real test of Washington’s new strategy may therefore still be ahead. Targeting major Chinese institutions would mean moving beyond pressure on Iran and accepting the risk of a broader economic confrontation with Beijing. China has already signaled that it will resist such pressure. Foreign Ministry spokesperson Lin Jian reiterated Beijing’s opposition to unilateral sanctions Tuesday and said China would take necessary measures to protect its legitimate rights and interests. Russia, meanwhile, is continuing to discuss alternatives to Western-dominated financial infrastructure. Alexander Trofimov, a Russian Foreign Ministry ambassador-at-large, said sanctions have accelerated interest in national-currency settlements, independent payment systems and potentially digital currencies in trade among countries facing Western restrictions.

Trofimov was not announcing a new Russian mechanism specifically designed to help Iran evade sanctions. But his comments illustrate a broader problem for Washington: the more aggressively the United States uses access to the dollar system as an instrument of coercion, the greater the incentive for targeted countries and their partners to develop ways of conducting trade outside it. None of those alternatives currently comes close to replacing the dollar-based financial system, but Iran’s ability to withstand the new campaign will partly depend on how quickly such channels can be expanded.

Inside Iran, meanwhile, the government is already trying to contain the domestic shock. After the rial crossed the psychologically significant threshold of 200,000 tomans to the dollar on the unofficial market, the Central Bank announced that it would make $500 million in physical foreign currency available through participating banks and exchange offices. Officials said additional currency could be released if necessary. Economy Minister Ali Madanizadeh has also said food-credit subsidies for some groups will increase during the second half of the Iranian year.

The response is telling: Tehran appears to expect external economic pressure to move quickly through the currency market and into household purchasing power. There are already signs that expectations alone are influencing daily life. Fuel distribution in Tehran reportedly jumped roughly 30 percent amid public concern about supplies, reaching more than 26 million liters on Monday. The sudden increase temporarily exhausted gasoline at a limited number of filling stations.

Iranian officials attributed the disruptions to unusually high demand, traffic and delays in replenishing stations rather than a nationwide gasoline shortage. That distinction is important. But so is the episode itself. Before the full effects of Washington’s new sanctions can even be measured, fear of what might happen is already changing consumer behavior.

President Donald Trump has sought to portray these economic pressures as evidence that the Iranian state itself is nearing collapse, claiming Tuesday that Tehran cannot pay large portions of its armed forces. Trump offered no evidence for that assertion, and it has not been independently verified. His claim nevertheless illustrates the administration’s public theory of the campaign: that sufficiently severe economic pressure can weaken the Iranian government to the point that it is forced to change course.

Yet at almost exactly the same moment, another process is unfolding. Pakistan’s army chief, Field Marshal Asim Munir, traveled to Tehran on Monday accompanied by Interior Minister Mohsin Naqvi. Munir met President Masoud Pezeshkian, Parliament Speaker Mohammad Bagher Ghalibaf and Supreme National Security Council Secretary Mohsen Rezaei. Pakistan’s military said the discussions focused on preventing further escalation, reopening the Strait of Hormuz and accelerating an end to the conflict.

Naqvi described the talks with Pezeshkian as “very positive and constructive” and said “significant progress” had been made. Pakistan says the two sides discussed steps needed to revive the earlier Islamabad understanding between Washington and Tehran. The language coming from Tehran was also unusually optimistic. Mehdi Tabatabaei, a senior official in Pezeshkian’s office, described Munir’s visit as “highly productive” and said its results would become apparent soon. Pezeshkian thanked Pakistan for its mediation but called on Washington to change its “tone and approach,” arguing that reliance on coercion would only complicate implementation of an agreement.

There may also be more substance behind those statements than has been publicly disclosed. Tasnim, citing a source close to Iran’s negotiating team, reported Tuesday that Munir had not carried a new American threat to Tehran but had instead sought to reopen space for negotiations. According to the report, Iran communicated its conditions concerning the Strait of Hormuz through the Pakistani delegation and insists that a return to the Islamabad understanding - including what Tehran describes as its fifth provision concerning arrangements in the strait - must be part of the process. That account cannot yet be independently verified. But taken together, the Iranian and Pakistani statements suggest that substantive bargaining is continuing behind the confrontational public rhetoric.

The Oman channel, meanwhile, delivered a more concrete outcome Tuesday. Omani Foreign Minister Badr Al Busaidi held talks in Tehran with his counterpart Abbas Araghchi, after which Iran and Oman announced a phased framework aimed at restoring safer navigation through the Strait of Hormuz. The plan includes a temporary joint shipping corridor and cooperation on mine-clearing, with further technical negotiations aimed at establishing a permanent corridor and longer-term arrangements for maritime traffic and security.

The agreement stops well short of fully reopening the Strait of Hormuz or resolving the broader Iran-U.S. confrontation. That distinction is important. Tehran appears willing to take incremental steps to ease pressure on regional shipping without surrendering Hormuz as one of its principal sources of leverage in negotiations with Washington. It also suggests that the recent Pakistani optimism was not occurring in isolation: while Washington was announcing a sweeping new campaign of economic pressure, regional diplomacy was simultaneously producing tangible movement on one of the war’s most consequential disputes.

Qatar is pushing in the same direction. Doha has criticized Iran’s restrictions in the Strait of Hormuz and wants commercial shipping and energy exports restored, but Foreign Ministry spokesperson Majed al-Ansari also stressed Tuesday that the new U.S. sanctions are unilateral rather than multilateral or UN measures. Qatar, he said, continues to regard negotiation and regional mediation as the only viable route out of the crisis.

If Washington’s objective remains forcing Tehran to accept terms Iranian leaders view as surrender, the United States risks reproducing a familiar pattern: escalating pressure imposes substantial costs on Iran without producing the political concessions that were supposed to justify those costs.

What is different now is that this pressure campaign is unfolding alongside an active diplomatic channel. Neither side has demonstrated that it is prepared to make the compromises necessary for a durable settlement, and the progress reported by Pakistan and Oman does not mean a broader breakthrough is imminent. Washington could still dramatically escalate its economic campaign this week, particularly if it moves against a major Chinese financial institution. Tehran, meanwhile, continues to treat control over passage through the Strait of Hormuz as a central source of leverage.

The coming days may therefore reveal what Washington’s “economic D-Day” is actually intended to accomplish. If economic pressure is being used to strengthen Washington’s negotiating position before pursuing an agreement in which both sides can claim meaningful gains, the Pakistani channel could provide an offramp from nearly six months of war.

If economic isolation instead becomes an end in itself - another attempt to compel Iranian capitulation - the more immediate consequences are easier to foresee: deeper pressure on Iran’s currency and households, greater efforts by Tehran and its partners to build alternative financial channels, continued disruption in the Persian Gulf and a higher risk that economic confrontation once again feeds military escalation. For ordinary Iranians, the impacts are already being felt. The rial, food subsidies and even the sudden rush to Tehran gas stations are already showing how quickly decisions made in Washington and Tehran can reach the household level.

While political decision-makers debate sanctions, negotiations, and geopolitical strategies, thousands of people in Iran are fighting for something far more fundamental: access to life-saving medication. For many patients with hemophilia or other severe bleeding disorders, it is not the disease itself that determines life or death, but whether the necessary treatment reaches them in time.

On July 29, Maryam Shirinsokhan conducted an in-depth interview with Amin Afshar, Chairman of the Board of Directors of the Iranian Hemophilia Society, about the consequences of international sanctions on medical care. He describes concrete examples of how supply chains collapse, international aid efforts fail, and families are forced to live with the constant fear that a bleeding episode affecting their child may no longer be treated in time.

This interview is not intended as a political statement, but rather as an insight into the humanitarian consequences of a healthcare crisis whose impact is felt primarily by the most vulnerable: children, women, and people who depend on life-saving medication.

Maryam Shirinsokhan: During the brief period when a sanctions exemption existed: Which medications were you able to import, and what impact did this have on the situation of hemophilia patients?

Amin Afshar: Since September 2025, with the reactivation of the so-called snapback mechanism, there has effectively been no meaningful exemption for the import of life-saving medications for hemophilia patients. Even during periods of political negotiations, temporary agreements, or short-lived ceasefires, there was, in practice, no improvement over the past more than twelve months in the supply of the three essential medications that these patients urgently require.

The shortage of these three medications directly affects around 4,000 patients in Iran. The majority are women, children, and people with severe von Willebrand disease and Factor XIII deficiency.

During this period, several patients have died. Others continue to fight for their lives in hospitals, while some have suffered irreversible brain, joint, and physical damage — injuries that cannot be reversed even if the medications become available again in the future.

MS: What happened specifically after the return of sanctions?

AA: The problem was by no means limited only to the sale of medications.

In reality, an entire chain of simultaneous obstacles emerged: from money transfers and cooperation with banks, to insurance coverage for shipments and transportation, as well as the issuing of export licenses and pharmaceutical companies’ concerns about so-called secondary sanctions.

In many cases, manufacturers were willing to provide the medications. However, the process of actually getting them to patients in Iran was effectively blocked.

In other words, Iranian patients are not victims of a single obstacle, but rather of an entire chain of restrictions.

MS: The United States repeatedly emphasizes that medicines are not affected by sanctions. What has been your practical experience?

AA: Our practical experience clearly contradicts this statement.

A particularly illustrative example concerns the World Federation of Hemophilia (WFH). After assessing the dramatic situation of Iranian patients, the organization decided to donate medication free of charge to people suffering from von Willebrand disease in Iran. The necessary coordination with the Iranian Red Crescent Society, the International Federation of Red Cross and Red Crescent Societies, and other relevant institutions had already been completed.

However, the shipment required the necessary official approvals. These approvals were ultimately not granted, meaning that the medication never reached Iran.

This was a purely humanitarian donation. There was no commercial transaction and no financial transfer involved.

From our perspective, the problem therefore cannot be reduced solely to financial transactions. In some cases, even patients’ access to donated medication was effectively prevented.

MS: How many patients are currently affected by medication shortages?

AA: In Iran, more than 16,000 people with hemophilia and other inherited bleeding disorders are receiving care through the Iranian Hemophilia Center.

In recent months, the most severe supply crisis has affected around 4,000 patients with Factor XIII deficiency as well as people with severe von Willebrand disease.

The consequences of this medication shortage include a growing number of hospital admissions, severe bleeding episodes, postponed surgeries, permanent mobility limitations, higher treatment costs, and, unfortunately, the deaths of several patients.

MS: What happens when a patient does not receive their clotting medication in time?

AA: For a person with hemophilia, a delay in receiving medication is not merely a postponement of treatment.

Every hour can determine whether a joint will suffer permanent damage, whether a brain hemorrhage will occur, or whether the patient will lose their life.

Bleeding into joints can lead to irreversible joint damage within a short period of time.

Brain, gastrointestinal, or internal bleeding represents an immediate threat to life.

This is especially critical for children, whose bodies are still growing. Every untreated bleeding episode can result in lifelong disability.

MS: Some argue that domestic mismanagement is the real problem - not sanctions. What is your response?

AA: In reality, both factors play a role.

Sanctions significantly restrict access to life-saving medications, lengthen procurement processes, and make them considerably more expensive.

At the same time, domestic issues such as bureaucratic procedures, delays in allocating foreign currency, problems within the insurance system, limited budgetary resources, and lengthy administrative processes further intensify the crisis.

If either of these two factors were removed, managing the healthcare crisis would become significantly easier.

Therefore, we believe that neither aspect can be ignored.

MS: Have there been cases in which foreign companies discontinued business relationships because of sanctions?

AA: Yes.

Over the past years, we have repeatedly witnessed international companies, intermediary banks, or transportation companies terminate their cooperation solely because of concerns about U.S. secondary sanctions.

In many cases, the problem was not a legal prohibition against selling medication, but rather fear of the possible consequences of doing business with Iran.

MS: What problems are patients’ families facing today?

AA: In addition to the financial burden of treatment, families live in a state of constant fear and uncertainty.

Mothers go to sleep every night worrying that, if their child suffers a bleeding episode, the urgently needed medication may not be available.

Some families have had to travel hundreds of kilometers in the hope of finding the necessary medication somewhere.

Others have been forced to postpone essential treatments.

This psychological burden, emotional exhaustion, and constant feeling of insecurity do not appear in any official statistics.

MS: Have you had to resort to alternative treatment methods?

AA: Unfortunately, yes.

In some cases, patients have been forced to use non-purified plasma-derived blood products, such as cryoprecipitate or fresh frozen plasma, instead of clotting factor concentrates.

This represents a return to treatment standards that were common approximately four decades ago.

This year, the World Health Assembly also classified the use of these treatments for hemophilia patients as medically undesirable and recommended their gradual elimination from healthcare systems.

The Iranian Hemophilia Center, as an official member of the World Federation of Hemophilia (WFH), also supported this resolution.

These blood products are significantly less effective, carry a higher risk of complications, and are insufficient to meet patients’ medical needs in cases of severe bleeding or major surgical procedures.

MS: To what extent have international organizations been able to provide assistance?

AA: We greatly appreciate the efforts of the World Federation of Hemophilia (WFH).

The organization has repeatedly attempted to find ways to support Iranian patients.

However, restrictions caused by sanctions have resulted in a significant portion of these efforts ultimately failing.

We have contacted numerous international organizations and conducted extensive correspondence with them.

Our impression is that many of these organizations also fear the possible consequences of U.S. sanctions and are therefore, in practice, unable to deliver life-saving medication to Iran.

MS: Have you submitted reports to the United Nations?

AA: Yes.

Over the past years, the Iranian Hemophilia Center has submitted numerous reports and documented evidence regarding the humanitarian consequences of medication shortages to international organizations, specialized institutions, and global networks.

From our perspective, however, the international response has not matched the scale of the crisis.

We remain convinced that the health of patients must never become a casualty of political conflicts.

MS: What would you say today to political decision-makers in the United States?

AA: I would not ask them for political concessions.

I would simply ask them to allow a child to access the life-saving medication they need.

No political decision should result in the death of a child who could have lived a normal life simply because they did not receive essential medication in time.

As a non-governmental organization, we are prepared to work together with the World Federation of Hemophilia (WFH), the International Federation of Red Cross and Red Crescent Societies, and other humanitarian organizations to establish a transparent, traceable, and verifiable mechanism for importing life-saving medications — even when these medications are purchased through regular channels rather than donated.

MS: What would you say to the authorities of the Islamic Republic of Iran?

AA: I would urge them to make access to life-saving medications for patients with rare and severe diseases their highest priority.

The allocation of foreign currency, expansion of domestic production, investment in plasma processing, establishment of strategic medication reserves, and removal of bureaucratic obstacles must be accelerated significantly.

Furthermore, we believe that patient organizations should be more actively involved in fundamental decisions concerning pharmaceutical policies. They are the first to witness the direct consequences of medication shortages among affected patients.

MS: Are children particularly affected by these consequences?

AA: Unfortunately, yes.

One of the most tragic events in recent times was the death of a three-year-old child with Factor XIII deficiency in the city of Khash.

In the months before his death, the child had been hospitalized several times due to the absence of the specific medication required for his condition and ultimately he passed away.

For us, this is not merely a number, but a symbol of the real and human consequences of medication shortages.

Currently, four additional children in different regions of Iran are receiving inpatient treatment due to a lack of medication and insufficient access to appropriate care. Their families hope and pray every day for their survival.

MS: Is it possible to design sanctions in a way that prevents harm to patients?

AA: From our perspective, any sanctions policy that restricts patients’ access to life-saving medication has failed from a humanitarian standpoint.

If sanctions are imposed, there must simultaneously be a practical, transparent, accountable, and verifiable mechanism ensuring that medicines, medical equipment, and other essential goods can reach the affected people without obstacles.

The right to health is a fundamental human right.

MS: You have repeatedly stated that medications are affected by sanctions. Can you provide evidence supporting this claim?

AA: For me, the most important evidence is the story of the medication donation by the World Federation of Hemophilia (WFH).

These medications were not intended to be sold, nor was any money supposed to be transferred for them. No one would have gained any economic benefit from this.

Despite extensive coordination with international organizations, this shipment never reached Iranian patients.

If even donated medications cannot reach patients, it becomes difficult to maintain that medicines are, in practice, completely exempt from the effects of sanctions.”

MS: If you only had two minutes to speak with a political decision-maker responsible for sanctions, what would you say?

AA: Today, I do not want to talk about politics. I want to talk about children whose only wish is to go to school, play, and have a normal future like other children their age.

They must not pay the price for political conflicts over which they have no control. Access to life-saving medication must never depend on political disputes. Humanity should begin where a child’s life is at stake.

Today, thanks to advances in modern medicine, hemophilia is a manageable condition — provided that the necessary medications are available. When access to these medications is interrupted, the consequences are predictable: bleeding, permanent disabilities, chronic pain, and, in some cases, death.

I appeal to all governments, international organizations, and political decision-makers to separate healthcare for patients from political conflicts.

No child, no woman, and no patient should ever be denied life-saving treatment simply because of their place of birth or the political situation of their country.

This is not a political demand; it is a humanitarian appeal. Today, I am not asking you to take sides for Iran or for the United States. I am asking you only to take the side of life.”

The Iranian rial has already fallen to a new record low, with the U.S. dollar crossing 2 million rials, or 200,000 tomans, on the open market as Iranians brace for the next round of U.S. economic measures. The timing is significant because the details of the new sanctions have not yet been announced. Fear of what comes next is already pushing households toward dollars and gold in an effort to protect their savings. Central Bank Governor Abdolnaser Hemmati sought to calm the market Monday, describing the latest jump as temporary and partly driven by the publicity surrounding the U.S. campaign.

But the vulnerability Washington is targeting is real. Iran enters this new phase with high inflation, severely constrained maritime commerce and an economy already weakened by years of sanctions and six months of war. A sustained decline in the rial quickly feeds into higher prices for imported goods, medicine and other necessities. The first effects of Washington’s new economic offensive are therefore reaching ordinary Iranians before the offensive itself has even been fully unveiled.

Treasury Secretary Scott Bessent has made clear that the campaign is intended to go considerably further than adding more Iranian individuals and companies to U.S. sanctions lists. Writing in the Financial Times, Bessent described Monday as an “Economic D-Day,” called the confrontation with Iran the “final phase,” and said Washington intends to cut the remaining economic lifelines sustaining Tehran. President Donald Trump reinforced that message Monday, declaring that Iran is “totally collapsing.”

The most consequential part of the strategy may be its focus on everyone outside Iran who continues doing business with it. Washington is threatening intensified economic consequences for countries, companies and financial institutions that facilitate Iranian commerce. The real test of the new campaign, then, may not be how much more of Iran the United States can sanction, but how effectively it can force the rest of the world to stop trading with Iran.

That puts China directly at the center of the confrontation. China has long been the principal destination for sanctioned Iranian oil and remains Tehran’s most important economic escape valve. Iranian oil exports to China reportedly fell to roughly 534,000 barrels per day in August, but independent Chinese refiners continue purchasing Iranian crude and payment channels involving the yuan remain active.

Beijing’s response Monday was notably sharper than its earlier general objections to sanctions. Chinese Foreign Ministry spokesperson Lin Jian said China was closely following developments and would take “necessary measures” to protect its legitimate rights and interests, while warning that sanctions and pressure would not resolve the conflict and could instead intensify it.

That creates a potentially much larger test for Washington. Secondary sanctions are most effective when foreign governments, banks and companies conclude that access to the U.S. financial system matters more than commerce with the sanctioned country. Applying that logic to smaller Iranian trading partners is one thing; applying it to the world’s second-largest economy is another. If Washington seriously targets Chinese refiners, banks or other institutions involved in Iranian oil trade, the Iran pressure campaign could destabilize the broader U.S.-China economic relationship. If it does not, Tehran may retain one of the most important channels through which it has mitigated the impacts of previous sanctions.

Iran, meanwhile, is making clear that it does not intend to treat the new campaign as a purely economic contest. Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, issued one of Tehran’s strongest warnings yet, saying neighboring countries that participate in Washington’s economic campaign would be treated as enemies. He said Tehran would first try to persuade them not to participate, but warned that if they continued, Iran could target their interests.

Most significantly, Rezaei threatened that if regional countries join what Tehran calls Washington’s “economic war,” Iran would prevent “a single drop of oil” from leaving the Persian Gulf. This vow could implicate not only the Strait of Hormuz, but potentially alternative export routes as well. Iran has not carried out that broader threat, and Rezaei simultaneously insisted Tehran does not seek to expand the war. But his warning explicitly connects Washington’s secondary-sanctions strategy to the security of Gulf energy infrastructure.

Iran is effectively signaling that if Washington tries to turn its neighbors into participants in an economic siege, Tehran may treat their cooperation as participation in the war itself. That leaves Gulf governments caught between American economic power and Iran’s ability to further threaten energy infrastructure in their immediate neighborhood.

The threat carries additional weight because the Strait of Hormuz remains far from normal. Kpler data indicate that only 13 vessels crossed the Strait on Saturday and four on Sunday, although the real number could be somewhat higher because some vessels travel without transmitting normal tracking signals. Iran has also warned ships against crossing without its authorization, while Iran’s Persian Gulf Strait authority - designed to oversee the waterway - has reportedly identified dozens of vessels as violators and warned that ships ignoring Iranian orders could face future fines, detention and confiscation.

Rezaei said Iran considers the Strait effectively closed and will not reopen it until Washington changes its behavior. He also warned that Iran would change the way it fights in any future round of military confrontation, saying the lessons of the past year would be incorporated into a different approach to warfare and that Iranian forces remain prepared for additional operations if escalation continues.

His comments on the nuclear issue were similarly striking. Rezaei argued that the U.S. attack had demonstrated the weakness of international nonproliferation guarantees and rhetorically questioned why countries should refrain from pursuing nuclear weapons if membership in the NPT and acceptance of international inspections do not protect them from military attack. His remarks are not evidence that Iran has decided to build a nuclear weapon, but coming from the secretary of the Supreme National Security Council, they illustrate how war and economic pressure may be affecting Iran’s internal debate over deterrence and the value of remaining within existing nuclear constraints.

All of this is unfolding while the regional military confrontation remains unresolved. Commercial traffic through one of the world’s most important energy corridors is still drastically reduced, Iran and the United States continue exchanging threats, Tehran is warning Gulf states against joining Washington’s campaign, and the possibility of renewed military escalation has not disappeared. The economic offensive is therefore not replacing the war so much as adding another potentially destabilizing layer to it.

Yet at precisely the same moment, diplomacy is also moving. Pakistani Army Chief Field Marshal Asim Munir arrived in Tehran Monday, his fourth visit in less than six months. Pakistan’s military described the trip as an effort to advance a peaceful, sustainable resolution to the conflict, while Iranian state media have increasingly portrayed Pakistan as an important channel between Tehran and Washington. Omani Foreign Minister Badr Albusaidi is expected in Tehran Tuesday as well, with Oman already involved in discussions over navigation through the Strait of Hormuz and historically serving as an intermediary between Iran and the United States.

President Masoud Pezeshkian has also repeatedly argued in recent days that Iran should find a way out of the current “neither war nor peace” situation. He has defended the earlier Islamabad understanding with Washington and argued that Iran should seek to end the conflict while it can still do so from what he describes as a position of strength and dignity.

The contrast is striking: Washington is preparing its most ambitious economic escalation yet, Tehran is threatening to widen the economic confrontation into a regional energy crisis and China is signaling that it will resist U.S. pressure. Yet, at exactly the same moment, Pakistan and Oman are trying to preserve the diplomatic path.

Maximum-pressure sanctions after the U.S. withdrawal from the nuclear agreement in 2018 inflicted enormous economic costs on Iran. They reduced oil exports, weakened the rial, drove inflation higher and damaged household purchasing power. But they did not produce the political capitulation Washington sought. The new campaign begins from a much more fragile baseline: Iran has endured not just the maximum pressure campaign launched eight years ago, but six months of war and a new naval blockade. Washington is now once again explicitly threatening the countries and institutions that provide Tehran with access to international commerce.

That means the new strategy could inflict significant damage. The rial’s plunge beyond 200,000 tomans may be the first warning of how quickly ordinary Iranians could bear those costs. But China’s response and Tehran’s threats also demonstrate why the consequences may extend far beyond Iran’s domestic economy.

The central question remains unchanged: what is all this pressure ultimately intended to achieve? Economic pressure could strengthen the argument inside Iran for reaching an agreement sooner, particularly as the costs of continued confrontation become harder for the government and ordinary households to absorb. The parallel diplomatic activity involving Pakistan and Oman suggests that an off-ramp has not disappeared.

The real strategic change, therefore, would not be moving from bombs to sanctions. It would be using whatever leverage Washington believes it has gained to move from demanding surrender toward demanding a deal that Iran can accept. Without that change, “Economic D-Day” risks becoming another escalation in a war that neither side has been able to win, with Iran’s population, regional energy security and a much wider set of international relationships once again caught in the middle.

Washington’s response to that stalemate is now becoming clearer: if overwhelming military power has not forced Iran to capitulate, the Trump administration intends to see if a pivot back to intense economic pressure can. President Donald Trump this week announced what he described as an unprecedented campaign of economic warfare and isolation against Iran. Vice President JD Vance described the conflict as entering a new phase in which economic pressure would become a central American instrument. Treasury Secretary Scott Bessent said Washington intends to combine the naval blockade with what he described as the toughest sanctions campaign ever imposed on a country.

This doesn’t mean the war is over. The naval blockade remains in place, which is widely viewed as an act of war and has involved U.S. naval vessels firing on ships seeking to pass the blockade lines, along with Iranian fire on commercial vessels transiting the Omani corridor. But moving the center of gravity from military operations toward economic warfare is also an implicit acknowledgment that nearly six months of military pressure have failed to achieve Washington’s central objective: forcing Iran to submit to U.S. terms.

Now Washington is betting that Iran’s economy will prove easier to break. Senior Iranian officials, for their part, have acknowledged just how serious that vulnerability could be. Speaking to Iranian and Iraqi business leaders during his visit to Baghdad, Parliament Speaker Mohammad Bagher Ghalibaf offered an unusually direct assessment: “No matter how much military power we have, if the people are hungry and we do not have financial circulation, economic growth and national production, we cannot endure.” Ghalibaf’s trip has attracted attention largely because of Iran’s changing regional position, the future of Iran-aligned armed groups in Iraq and his talk of a “new regional order.” But the economic dimension of the visit may now be just as important.

Iraq is one of Iran’s most important economic partners and one of the places where Washington’s new strategy will be tested. Iran’s regional neighbors have been an important part of weathering sanctions pressures in the past, and sanctions do not inhibit many traditional trade flows. As Iran Unfiltered reported earlier this week, the United Arab Emirates remains a crucial hub for Iranian imports, re-exports, logistics and financial transactions. How far Abu Dhabi actually goes in enforcing its new publicly stated restrictions on Iranian trade could have a significant impact on Iran’s ability to withstand the new pressure campaign.

In Baghdad, Ghalibaf called for greater use of the Iranian rial and Iraqi dinar in bilateral commerce and less reliance on the U.S. dollar. Iraq, however, faces its own balancing act. It remains deeply intertwined economically with Iran while Washington retains substantial leverage over its financial system. Tehran will need to preserve those regional economic channels just as the United States tries to close them.

President Masoud Pezeshkian went further on Friday, making perhaps his clearest public argument yet for ending the war. “It is better to end the war today, when we are in a position of power and dignity,” Pezeshkian said. He described the Islamabad memorandum reached with the United States as a major achievement approved through consensus in the Supreme National Security Council, while stressing that advocating an end to the war did not mean accepting future coercion.

Pezeshkian is not publicly arguing that Iran should seek peace because it has lost the war. He is arguing that Iran should end the conflict while it can still present the outcome as successful resistance rather than capitulation.

That argument looks more urgent when set against conditions inside Iran. Officials now say gasoline consumption has reached approximately 135 million liters per day, while the restoration of war-damaged refining capacity, increased refinery output and the use of some petrochemical capacity have brought production to roughly 130 million liters per day. The government is debating politically sensitive changes to gasoline distribution, ranging from limiting supply once daily production is exhausted to restructuring subsidies around a per-person allocation.

Pezeshkian himself connected the gasoline problem to the government’s broader fiscal constraints. Iran, he argued, cannot indefinitely purchase expensive gasoline abroad and sell it domestically at heavily subsidized prices while also paying for food subsidies, wheat purchases, insurance obligations, salaries and other expenditures.

There are signs of similar pressure in healthcare. Reports this week showed sharp price increases for a number of medicines following changes affecting preferential foreign-exchange allocations. One pharmaceutical company reported average increases of roughly 120 percent across 82 products, with much larger increases for some individual drugs. Iran’s Food and Drug Administration disputes claims that this amounts to the sudden elimination of preferential currency across the pharmaceutical sector or a new across-the-board price shock. Officials say the latest changes apply only to certain intermediate materials and pharmaceutical precursors and insist that essential medicines continue to receive support. Regardless, the dispute points to a much larger problem: maintaining heavy subsidies for fuel, food and medicine becomes harder as access to foreign currency tightens and government finances come under pressure.

This is the weakness Washington now hopes to exploit. Maximum-pressure sanctions after the United States withdrew from the nuclear agreement in 2018 substantially reduced Iranian oil exports, weakened the rial, increased inflation and imposed enormous costs on the economy. However, they did not produce the political capitulation Washington sought.

The current campaign could inflict considerably greater damage. Iran is already operating under wartime conditions, maritime trade is constrained, and Washington is trying to pressure third countries and financial centers that provide Tehran with access to international commerce.

The consequences for ordinary Iranians could be severe: higher inflation, declining purchasing power, more expensive medicine and essential goods, and potentially deeper shortages.

But there is a basic strategic problem that greater pressure alone does not solve. The shift toward economic warfare may be an acknowledgment that the military campaign failed to compel Iran, but changing the instrument without changing the objective risks producing the same result. If Washington continues to define success as forcing Iran to capitulate rather than negotiating an agreement in which both sides can claim meaningful gains, there is little reason to assume another maximum-pressure campaign will succeed where previous sanctions and nearly six months of military operations have failed.

Tehran is already trying to find ways around the pressure. Ghalibaf’s emphasis on bilateral trade and national currencies is one example. Pezeshkian has emphasized commerce with neighboring states and greater use of Eurasian organizations and economic arrangements. The government has also pointed to increased rail trade with China as evidence that alternative land routes can partially compensate for maritime restrictions.

These measures cannot replace access to the global financial system or erase the consequences of a prolonged blockade. But they mean the outcome will depend not only on how much pressure Washington can impose, but also on how quickly Iran can adapt. The Strait of Hormuz gives Tehran leverage of its own. Traffic remains far below prewar levels, and reports that Chinese shipping companies have suspended some passages because of continuing security risks - and that Chinese-linked supertankers have turned around near the Strait - show that Washington has still not restored normal commercial navigation.

But Hormuz is a double-edged weapon for Iran. Restricting shipping imposes costs on the United States and its partners, while also complicating Tehran’s relations with neighbors and disrupting the trade connections Iran itself needs. Iraq, which depends heavily on oil exports through the Gulf, is a particularly clear example of that tension.

This is also why Pezeshkian’s call to end the war “while we are in a position of power and dignity” matters. It is not just another appeal for diplomacy. It is an argument about timing. If Tehran believes it has already demonstrated that the United States cannot easily defeat it militarily, it may have an opportunity to negotiate while it can still portray the outcome as successful resistance. Waiting until the economic consequences become much more severe could leave it negotiating from a weaker position.

Washington’s new strategy therefore creates a paradox. Economic pressure could strengthen the argument inside Iran for reaching an agreement sooner. But if Washington uses that opening to pursue capitulation rather than compromise, it could instead convince Tehran that the real objective is economic collapse and make an agreement harder to reach.

With a six month military campaign failing to produce a decisive outcome, Washington is now preparing to test whether economic power can accomplish what military superiority could not. The more consequential change, however, may not be switching from bombs to sanctions. It would be shifting the objective from compelling Iran’s surrender to reaching a sustainable agreement in which both sides can secure meaningful gains. Without that change, Washington risks repeating a familiar cycle: inflicting enormous costs on Iran and ordinary Iranians without achieving the political outcome it seeks.

Khatami argued that the war had demonstrated something important about Iranian society: political dissatisfaction should not be confused with a lack of attachment to the country. Many Iranians who had serious grievances against the government, he said, nevertheless rallied around the country when it came under foreign attack.

But he also warned the government against interpreting that wartime solidarity as approval of the status quo. Khatami said strategic mistakes and structural problems had widened the distance between the state and society, pointing to economic hardship, public frustration and declining confidence in political institutions. In his view, the government now has an opportunity to address some of those grievances rather than assuming that national solidarity during the war erased them.

His position on foreign policy is similarly difficult to reduce to a conventional “hardliner versus moderate” divide. Khatami remains deeply distrustful of Washington and strongly critical of Israel, but he has also backed President Masoud Pezeshkian’s decision to negotiate with the United States and argued that Iran should avoid steps that could restart the war.

Iranians cannot be expected to live indefinitely under conditions of permanent conflict, he argued, making the case that protecting the country does not require rejecting diplomacy. Khatami has also challenged the continuation of wartime restrictions at home. While acknowledging the security pressures Iran faced during the conflict, he argued that prolonged internet restrictions are damaging and increasingly impractical in a country where millions of people depend on online access for work, commerce and everyday life.

Khatami is a former reformist president and has spent years criticizing important aspects of the Islamic Republic. His comments might therefore be dismissed as predictable opposition from Iran’s reformist camp. But the debate now unfolding over parliament’s proposed anti-infiltration legislation shows that the disagreements extend considerably further into the political establishment. As Iran Unfiltered previously reported, parliament has advanced legislation intended to strengthen the state’s ability to combat foreign intelligence penetration. The proposal has generated concern because of provisions that could affect contacts with foreign media, universities, embassies and other international institutions.

What has happened since is particularly revealing. President Pezeshkian’s government has now formally opposed the legislation, arguing that parts of the proposal conflict with constitutional protections and citizens’ rights. Vice President Majid Ansari has warned that the bill has created serious concern among academics, researchers and scientific institutions and could accelerate the migration of highly educated Iranians while damaging the country’s international standing.

The criticism is not coming only from the administration. Some members of parliament have questioned whether the legislation goes too far. Ahmad Bakhshayesh, a member of parliament’s National Security and Foreign Policy Commission, has cautioned that people should not come away believing that the government is choosing the easiest solution to the problem of foreign infiltration by restricting ordinary citizens. He has argued that Iran does need stronger counterintelligence protections, but that the legislation requires careful revision.

Most strikingly, Parliament Speaker Mohammad Bagher Ghalibaf has now intervened with what Iranian media have widely interpreted as a warning about the controversy. Ghalibaf said parliament should focus on the country’s urgent priorities and avoid consuming its political capacity on proposals that “worry elites” or “anger the people.” He described public trust as the country’s most important asset. His comments did not explicitly call for the bill to be withdrawn, but their timing - immediately after the backlash - has prompted speculation in Iranian media that parliament’s leadership may seek to slow or revise the proposal.

Ghalibaf is not a reformist critic standing outside the governing establishment. He is the speaker of a conservative-dominated parliament, a former commander in the Islamic Revolutionary Guard Corps, and one of the most powerful political figures in the country. Yet on this issue, the political line does not fall neatly between the government and its opponents, or between reformists and conservatives.

There is broad agreement across much of Iran’s political establishment that the intelligence penetration exposed during the war represents a serious national security failure and that the country needs better tools to confront foreign espionage. The disagreement is increasingly about how far the state should go in responding to that threat and what costs Iranian society should be expected to bear in the name of security.

That disagreement extends beyond the anti-infiltration bill. Khatami can support Iran’s armed resistance to foreign attack while opposing permanent war. Pezeshkian can negotiate with Washington while publicly expressing deep distrust of U.S. intentions. Ghalibaf can take a hard line on the Strait of Hormuz while warning his own parliament against legislation that risks angering the public. Members of the National Security Commission can demand stronger counterintelligence capabilities while questioning whether restrictions on ordinary interactions with the outside world are an effective way to achieve them.

These are not minor differences in rhetoric. They reflect genuine debate over how Iran should govern itself and respond to the pressures created by the war. Nor are those arguments confined to political elites. Iranian journalists, academics, business owners and other professional groups have entered the debate over the proposed legislation, while economic policy, internet access, social restrictions and the future of negotiations with Washington continue to generate their own disagreements.

None of this erases the limits of Iran’s political system. Opposition groups face significant restrictions, elections are tightly controlled, independent media operates under pressure, and the state retains extensive powers over organized political activity. But those realities can coexist with another one: Iranian politics is considerably more contested than the image of a single “hardline regime” making decisions for a politically-passive society.

The debate following the war makes that particularly visible. Iran’s political establishment agrees on some fundamental questions, including defending the country against foreign attack, while arguing intensely over what should happen next.

Khatami sees the national solidarity produced by the war as an opportunity for political reform and reconciliation. Pezeshkian’s government is pushing back against legislation it believes could further restrict citizens and isolate Iran’s scientific community. Members of parliament are publicly questioning the scope of a security initiative originating inside their own institution. And Ghalibaf is warning that public trust, not simply additional state authority, is a national security asset.

Those disagreements do not make Iran a pluralistic democracy. But they do make it a political system in which the boundaries between “hardliner,” “moderate,” “reformist,” “pro-government” and “anti-government” are often less useful than they appear from outside the country. Understanding those arguments - rather than flattening them into a single story about the Iranian state and Iranian society - may be particularly important now, as Iran debates not only how to recover from the war, but what kind of country should emerge from it.

The statement followed a day of confusion over two Iranian ballistic missile launches in the Persian Gulf. The UAE military initially assessed that the missiles were heading toward the Emirates, but later said they were targeting vessels in the Gulf. Iran denied targeting the UAE.

It is not yet clear, however, that the UAE statement represents a new economic measure or an actual change in policy. The statement did not directly link the trade restrictions to the missile incident, instead saying that all economic exchanges with Iran had been halted in light of regional escalation.

Esfandyar Batmanghelidj, an economist and expert on Iran’s political economy, argued that the statement may not represent a new suspension of trade at all. He noted that Abu Dhabi never formally announced a resumption of economic ties after suspending them at the outset of the war, even as flights, shipping and other commercial activity began to recover. Iranian flights continue to land at Dubai International Airport, while vessel traffic has not shown an immediate disruption.

In Batmanghelidj’s reading, the statement may instead be intended to reaffirm the UAE’s official position amid growing U.S. pressure and ahead of expected new economic measures from the Trump administration. He argues that Abu Dhabi may maintain a tough public position while continuing to protect its own economic interests and retaining significant autonomy over how aggressively it enforces restrictions on Iran.

That interpretation cannot yet be confirmed. But the timing of the UAE statement is significant. Last week, Treasury Secretary Scott Bessent said Washington was preparing economic measures against Iran that had “never been seen” before and indicated that additional announcements could come this week. President Donald Trump subsequently said the United States intended to hit Iran hard economically.

The Trump administration has already sanctioned Iran heavily, though the ongoing maritime blockade adds a new dimension to the pressure on the Iranian economy. The Trump administration could seek to expand sanctions designations on actors who still engage in significant trade with Iran, though such moves may either target actors insulated from American trade - and thus be ineffective - or risk blowback in the form of countermeasures.

Whether the UAE statement becomes another significant component of that pressure will depend less on its wording than on what Abu Dhabi actually does next. For Iran, the stakes are considerable because the UAE is not simply another trading partner. Iranian customs figures show that the UAE accounted for roughly 31 percent of the value of Iranian imports during the first seven months of the previous Iranian year, making it Iran’s largest source of imports by value during that period, ahead of China.

Much of that trade does not consist of goods actually produced in the Emirates. The UAE functions as a major re-export hub through which Iranian companies obtain machinery, components, raw materials and consumer goods originating elsewhere. Dubai and Jebel Ali also provide access to logistics companies, commercial intermediaries and financial channels that have become particularly important as sanctions have restricted Iran’s ability to conduct business directly with companies around the world.

This means the crucial question is not whether trade between Iran and the UAE formally exists, but how much access Iranian companies retain to the commercial infrastructure centered in the Emirates. That question is becoming more important because Iranian manufacturers are already struggling with the accumulated effects of nearly six months of war.

The latest data from the Iran Chamber of Commerce show that factories have recovered some of the production lost during the initial shock of the conflict, but the broader picture remains weak. Businesses continue to report declining orders and shrinking stocks of raw materials, while shortages of foreign currency, difficulties importing goods, energy disruptions and limited access to financing are making it harder to maintain normal production.

One particularly worrying sign is the availability of raw materials. Iranian businesses reported that their inventories of raw materials fell for the fifteenth consecutive month, suggesting that many factories are drawing down supplies faster than they can replace them. If the UAE now begins enforcing its stated restrictions more aggressively against financial transactions, re-exports or Iranian-linked businesses, manufacturers dependent on imported components, machinery and intermediate goods could face an additional obstacle to replenishing those supplies.

Concerns about the longer-term health of Iranian industry are increasingly being voiced inside the country. This week, a senior official at the Ministry of Industry, Mines and Trade warned that signs of “deindustrialization” are emerging in parts of the economy and that continued deterioration could threaten Iran’s industrial base. At the same time, the spokesperson for parliament’s Industries and Mines Committee called on the government to establish a crisis task force for industries damaged by the war and demanded an operational plan to return affected businesses to production.

These warnings do not mean Iranian industry is already in collapse. Rather, they point to a risk that temporary wartime disruptions could turn into longer-term damage if factories cannot replenish supplies, obtain financing and restore normal production. The government has attempted to prevent that outcome. Early in the conflict, authorities approved a package containing 106 measures intended to support businesses, including provisions related to customs, trade, financing, taxes, foreign currency and imports.

But assessments from Iran’s private sector suggest implementation has been far less successful than the size of the package might imply. According to a recent assessment by the Iran Chamber of Commerce, satisfaction among businesses with implementation of the government’s wartime support measures was below 10 percent. Roughly one-third of the measures dealt with trade and customs, while others addressed financing, taxation, registration of imports and access to foreign currency.

Business representatives say many of the measures have either been implemented slowly or provided temporary breathing room rather than addressing the underlying problems facing production. The Chamber has identified three particularly serious wartime pressures: damage to some upstream industries that has spread through downstream supply chains, a sharp decline in demand, and prolonged uncertainty created by a conflict with no clear endpoint.

Manufacturers are therefore being squeezed from both sides: producing goods is becoming more difficult and expensive while consumers and businesses are becoming less willing or able to buy them. Iran does have alternatives to some of its traditional trade routes. As Iran Unfiltered recently reported, Tehran has dramatically expanded its use of overland commerce as maritime access has become more difficult. President Masoud Pezeshkian said the number of trains arriving from China had increased from roughly one per week to as many as three per day, while the government has sought to expand trade corridors through Central Asia and neighboring states.

Those routes have helped Iran keep goods moving despite the naval blockade and provide Tehran with alternatives that did not exist at the same scale during earlier periods of sanctions. But trains and trucks solve only part of the problem. Moving goods through another country is one thing; replacing the financial, logistical and intermediary services Iranian companies have long accessed through the UAE would be another. Iran may be able to redirect more shipments through China, Central Asia and neighboring countries, but establishing alternative payment mechanisms and commercial relationships could prove more difficult.

For now, there are important reasons not to assume that the UAE statement will suddenly sever those networks. Flights continue, vessel traffic has not stopped, and Iran and the UAE have powerful economic incentives to preserve at least some degree of commercial engagement. But the situation bears watching because the difference between a largely declaratory UAE policy and aggressive enforcement could be economically significant for Iran.

Nearly six months into the war, economic pressure on Iran is increasingly moving beyond oil exports and headline sanctions. Iranian factories must secure raw materials, finance imports, cope with energy constraints and maintain supply chains at the same time that domestic demand remains weak. The government’s own business-support program has so far struggled to address those problems.

Washington is now promising another round of economic pressure, while the UAE is publicly emphasizing that its restrictions on commerce with Iran remain in place. Iran has demonstrated that it can reroute trade when established channels are disrupted. The next question could be whether those adaptations will be enough to keep its factories supplied if access to one of its most important commercial hubs becomes substantially more difficult.

The clearest evidence of Iran’s remaining leverage is in the Strait itself. President Donald Trump has repeatedly claimed in recent days that the United States controls Hormuz and has gone so far as to say that he will declare the Strait U.S. territory after the war. Actual shipping traffic looks very different. Preliminary Kpler data show only six commodity vessels crossed the Strait on Monday, after just three on Saturday and two on Sunday. No very large crude carriers or LNG tankers were recorded. Oil shipments through the Strait have fallen from roughly 18 million barrels per day before the war to around 2 million barrels per day.

Nearly six months into the war, Iran has therefore retained the practical ability to keep one of the world’s most important energy corridors operating at a fraction of normal capacity. What has not materialized is the economic collapse that some Iranian officials expected such a disruption to produce. For decades, a closure of Hormuz was treated as a potential doomsday scenario for global energy markets, and early Iranian calculations appeared to assume that sustained disruption would send oil prices dramatically higher and rapidly create unbearable pressure on Washington and its allies.

Instead, Brent crude remains around $90 a barrel - higher than before, but not necessarily debilitating. Strategic reserve releases by the United States and other major consumers, China’s enormous oil inventories and reduced demand have given the global economy considerably more capacity to absorb the disruption than many expected. China in particular entered the conflict with stockpiles estimated to cover more than 100 days of consumption and has reduced its dependence on Middle Eastern imports.

But the ability to absorb the shock should not be confused with eliminating it. The U.S. Strategic Petroleum Reserve has continued to decline and is now at its lowest level since 1982. Oil around $90 has also kept upward pressure on American gasoline and diesel prices. The oil market increasingly appears to be treating restricted Hormuz traffic not as a temporary emergency but as a prolonged new reality.

That creates a different kind of pressure on Washington that is slower and less dramatic than Tehran may initially have hoped, but could prove more sustainable politically over time. Trump’s approval rating has now fallen to 33 percent, the lowest of his presidency, while 80 percent of Americans say they are concerned the Iran war will become prolonged and only about one in five believe the conflict has been worth its costs. Rising fuel prices are not the only reason for Trump’s political difficulties, but the economic consequences of the war are increasingly part of a broader cost-of-living problem facing the administration ahead of the midterm elections.

The latest military confrontation has also tested Washington’s assumptions. After the Islamabad agreement broke down, the United States and Iran returned to intensive strikes. The United States inflicted significant damage on Iranian military and infrastructure targets, but Iran continued firing missiles and drones at American positions across the region. Iranian attacks on U.S. forces in Jordan killed American service members and triggered another round of U.S. retaliation.

The failure of U.S. defenses to protect American personnel was significant enough to prompt speculation among some analysts that Iran’s increasingly accurate and effective strikes may reflect technological or intelligence assistance from China or Russia. Combined with repeated reports that the war has significantly depleted stocks of some U.S. precision munitions and air-defense interceptors, the episode has raised further questions about assumptions that superior American military power can translate into a rapid or decisive victory.

The disparity in conventional military power remains enormous. But the renewed fighting demonstrated again that superior U.S. firepower has not produced a clear military path to ending the conflict on Washington’s terms. Iran has retained enough missiles, drones and operational capacity to impose casualties and costs on U.S. forces even after months of sustained attacks.

It is against this backdrop that the political signals emerging from Tehran over the past several days become particularly important. After the collapse of the Islamabad process, the political trajectory inside Iran initially appeared to be moving away from negotiations. Hardliners criticized the agreement, reports suggested that Supreme Leader Mojtaba Khamenei opposed further talks, and personnel changes in the national security establishment - including the appointment of Mohsen Rezaei as secretary of the Supreme National Security Council - reinforced perceptions that Tehran was preparing for a more confrontational phase.

The signals now look more complicated. Parliament Speaker Mohammad Bagher Ghalibaf, who played a central role in the Islamabad negotiations, has moved from a relatively defensive posture over the agreement to an explicit public defense of it. Today, Tuesday, he acknowledged that the ceasefire and temporary easing of the blockade created by the memorandum gave Iran valuable time to increase its economic resilience and rebuild its defensive capabilities.

More importantly, Ghalibaf explicitly presented the implementation of the Islamabad agreement as the route out of the current confrontation. He said the Strait of Hormuz would not reopen until the United States lifts its blockade, frees Iranian frozen assets, removes restrictions on Iranian oil exports, ends military operations and fulfills the other conditions Tehran says were included in the agreement.

A similar message is now coming from the IRGC. Yadollah Javani, the Guard’s deputy commander for political affairs, said Monday that the war should end on the basis of the Islamabad memorandum and that Hormuz would reopen once Washington fulfills its commitments under it.

The significance is not simply that Iranian officials are defending an old agreement. It is that influential figures from the political and military establishment are now publicly defining a possible exit from the war at a moment when the 60-day negotiating period has formally expired.

There has been some movement on the Hormuz question itself. Iran says its negotiations with Oman over shipping arrangements have advanced to the point that the two sides have agreed on a navigation route and are discussing the language of a joint statement. Tehran has stressed that an agreement with Oman would not automatically mean reopening the Strait. Qatar, however, says mediators are waiting for the Iran-Oman arrangement to be finalized because resolving the Hormuz issue would make a return to broader U.S.-Iran negotiations considerably easier.

The emerging Iran-Oman arrangement may therefore be important not simply as a technical agreement over shipping, but as a possible face-saving mechanism for both Tehran and Washington. Based on what has emerged publicly so far, there is little indication that Iran has simply agreed to abandon its control over shipping through the Strait. Iranian officials continue to insist that full reopening remains conditional on U.S. implementation of the Islamabad terms. That raises the possibility that the Oman channel is developing an arrangement that allows commercial traffic to increase while Iran preserves at least some of its leverage, giving Washington a way to ease the disruption without publicly accepting Tehran’s demand that it has lost control of Hormuz.

Trump’s recent rhetoric adds another wrinkle to the situation. His comments about bombing Oman, amid negotiations over the Strait, further reinforce that Washington has been applying significant pressure on the Oman channel. The fact that Tehran continues publicly to insist it has not surrendered its conditions - while mediators describe an Iran-Oman understanding as the potential gateway back to broader negotiations - suggests that any workable formula will give both sides something they can present domestically as a success.

Signals from Washington and the region reinforce the impression that diplomacy is continuing beneath the public confrontation. Jared Kushner has described U.S. contacts with different elements of the Iranian government as unusually active, while acknowledging that no final understanding has been reached. Turkish President Recep Tayyip Erdogan has now spoken directly with President Trump and urged continued negotiations with Tehran, offering Türkiye’s assistance in efforts to end the conflict.

None of this means a new agreement is imminent. Trump says he does not want to simply extend the previous arrangement, Tehran continues to threaten a more offensive military posture if diplomacy fails, and another incident in Hormuz could rapidly trigger a new escalation. Today, Tuesday, a vessel was struck by an unidentified projectile while leaving the Strait, killing a crew member and underscoring how easily the military and diplomatic tracks can collide.

But the strategic picture is different from where it stood when the Islamabad agreement was reached. Iran has learned that restricting Hormuz can impose sustained costs on the global economy but cannot easily produce the immediate economic shock that would force Washington to change course. The United States has learned that strategic reserves and alternative energy supplies can soften the impact of Hormuz disruption, but at growing economic and political cost. And the latest fighting has again shown that even after months of bombardment, Iran retains sufficient capacity to inflict casualties on U.S. forces and disrupt regional shipping.

Neither side has demonstrated that it can force the other to capitulate. The next test may therefore come not on the battlefield but in the Iran-Oman negotiations. If those talks can produce a formula that restores significant shipping without requiring Iran to publicly surrender control of the Strait or Washington to acknowledge that military pressure failed to reopen it, they could provide exactly the kind of face-saving off-ramp both governments need. That, in turn, could create the space Qatar, Turkey, Pakistan and other mediators are seeking to move Washington and Tehran back toward broader negotiations.

For now, Iran’s strategy of outlasting the United States has not delivered a decisive victory. But Washington’s strategy of using overwhelming military and economic pressure to force Iran into submission has not done so either. After nearly six months of war, that mutual failure may be creating a stronger incentive for diplomacy than either side’s battlefield successes.

The 19-article “Plan to Counter the Infiltration of Intelligence Services and Foreign Governments or Institutions” emerged amid growing concern in Tehran over foreign intelligence operations. Those concerns have taken on greater urgency following the war and revelations about the extent of Israeli intelligence penetration inside Iran. Supporters argue that existing espionage laws have not kept pace with modern intelligence operations, which they assert involve social media, academic relationships, journalism and professional networks rather than traditional clandestine methods.

The concern over foreign infiltration is not difficult to understand. The more difficult question is whether the proposed response draws a sufficiently clear line between intelligence activity and ordinary engagement with the outside world. Right now, the legislation appears to muddle espionage with normal cross-cultural exchange, posing risks to ordinary people and inhibiting opportunities for greater understanding.

Among the most consequential provisions are restrictions on foreign media. Interviews with outlets financed by the United States or Israel could carry a six-year prison sentence, while interviews with other foreign media would require authorization from the Intelligence Ministry. Sending photographs, videos or other information to foreign media or individuals involved in media activities abroad could carry additional prison terms.

The proposal would also extend government oversight into academic cooperation. The Intelligence Ministry would maintain a list of foreign governments, universities and institutions approved for scholarships, research grants, memoranda of understanding and scientific events. Academic cooperation outside that approved framework could potentially expose Iranian professors, researchers and students to criminal penalties.

Civil society organizations would face similar constraints. NGOs, associations, political organizations and other groups seeking financial support or formal cooperation with foreign governmental or nongovernmental institutions could be required to obtain government authorization. Violations could lead not only to prison sentences for those involved but also to organizational and professional penalties.

The draft also regulates certain contacts with foreign embassies and institutions and includes provisions covering cultural and educational activities. Some of its most serious penalties concern individuals accused of acting under foreign direction or training and attempting to influence government policy or public decision-making in ways deemed contrary to the country’s fundamental interests.

While the provisions are presented as safeguards against foreign intelligence activity, they could give security institutions considerable opportunity to crack down on international engagement that is not ordinarily understood as espionage or efforts to compromise national security. Secretly providing classified military information to a foreign intelligence service is one thing. Speaking to a foreign journalist, collaborating with a university researcher, attending an academic program or working with a civil society organization is another. A legal framework that does not distinguish these activities with sufficient precision risks creating uncertainty over where legitimate international engagement ends and prohibited foreign cooperation begins.

The implications are especially important for Iranians living abroad, including the Iranian-American community. Consider an Iranian-American journalist interviewing a source inside Iran, a U.S. university conducting research with Iranian academics, or a diaspora organization working with Iranian civil society. The activity may be entirely lawful and routine on the American side while potentially creating reporting requirements, authorization requirements or legal risks for the Iranian participant.

Some provisions of the reported draft also explicitly contemplate individuals outside Iran. In certain circumstances involving contacts covered by the proposal, Iranians abroad would be expected to obtain authorization through an Iranian embassy or consulate. The potential impact on the diaspora therefore should not be understood as entirely indirect.

This could matter even in the absence of widespread prosecutions. Laws governing international communication can influence behavior simply by creating uncertainty about what is permissible. A journalist who is unsure whether speaking with an American outlet could create legal trouble may decline an interview. A professor may decide that collaborating with an American university is not worth the risk. An Iranian organization may avoid working with a diaspora group rather than determine whether government authorization is required.

The cumulative effect could be to further narrow already limited channels between Iranian society and the outside world. For Iranian Americans, those channels have already been constrained by decades of political tension, sanctions, the absence of diplomatic relations and restrictions on financial and institutional exchanges.

The same issue matters for understanding Iran itself. Foreign journalists, researchers and policymakers frequently depend on conversations with people inside the country to obtain perspectives that cannot be captured through official statements alone. If fewer Iranians feel comfortable speaking with people abroad, the result may be greater isolation not only for those inside Iran but also less reliable information about Iranian society for the outside world.

The proposal should not be interpreted as establishing a general prohibition on communication between Iranians and their relatives or friends abroad. Routine family contact is not the same as the institutional and professional activities targeted by the reported provisions. Much will depend on the final definitions of terms such as “cooperation,” “communication,” “foreign institution” and foreign “direction,” as well as how authorities interpret them in practice.

For now, the proposal has not yet been adopted into Iranian law. The legislation remains subject to the parliamentary process, individual provisions can be amended or removed, and any final legislation would require review by the Guardian Council before taking effect. That process will determine whether lawmakers narrow the proposal around genuine counterintelligence concerns or preserve its broader restrictions on media, academic and civil society engagement.

Iran’s concern about foreign intelligence penetration is grounded in real security failures exposed during the conflict. Yet this response risks impacting journalism, scholarship and civil society. That is ultimately what makes this legislation consequential beyond Iran’s internal security debate. If its final language clearly distinguishes espionage from ordinary international engagement, it could remain primarily a counterintelligence measure. If those boundaries remain broad or ambiguous, the legislation could instead make routine contact with the outside world increasingly subject to security oversight, further complicating connections between Iranians inside the country and communities abroad, including in the United States.

While the economy has in many ways adapted to ongoing warfare, a fundamental question remains: how long can those adaptations compensate for the loss of normal access to maritime trade?

The most immediate signs of pressure have emerged in the energy sector. As Iran Unfiltered reported earlier, domestic gasoline consumption is running above production, while the government says the maritime blockade and financial constraints have made replacing the shortfall through imports increasingly difficult. Reports of supply limitations have emerged in several parts of the country, while an attempt in Kerman Province to introduce a new pricing system for consumption above existing subsidized quotas was quickly suspended.

But gasoline is only one part of the problem. Iran historically conducts much of its foreign trade through its southern ports, and shifting that volume to roads and railways carries significant logistical and financial costs.

Majidreza Hariri, chairman of the Iran-China Chamber of Commerce, has emerged as one of the most outspoken Iranian business figures warning about the economic consequences of a prolonged maritime blockade. Hariri has argued that if the blockade continues over the long term, its impact on Iran’s economy could exceed that of years of sanctions.

According to Hariri, even redirecting trade through neighboring countries such as Turkey and Pakistan cannot replicate the capacity of Iran’s southern ports. Iran lacks sufficient land-border logistics to move comparable volumes of goods, he said, while transportation costs for some shipments have already risen to four or five times their pre-blockade levels. The result, he warned, would be more expensive goods as well as reductions in the quantity and quality of imports.

Hariri has therefore called ending the maritime blockade an economic priority, arguing that it should be broken through negotiations if possible and, in unusually stark language for a business official, by force if negotiations fail. His warning highlights an important limitation of the strategy the Iranian government is now pursuing. Overland routes can reduce the impact of the blockade, but they cannot fully replace maritime trade.

President Masoud Pezeshkian nevertheless says Iran is rapidly expanding those alternatives, and has already moved from one train from China entering Iran per week to three such trains per day now. Pezeshkian said Iran would not remain passive in the face of pressure and blockade, and the uptick in rail traffic with China is indicative of that proactive

The increase, if sustained, represents a striking expansion in rail capacity. At one train per week, the route would amount to roughly 52 trains annually. Three trains per day would represent a theoretical pace of more than 1,000 trains a year.

Pezeshkian said the government is also working to activate additional trade routes through Azerbaijan, Russia and other regional corridors. He presented the effort as part of a broader strategy of expanding economic relations with neighboring countries and making greater use of organizations including the Eurasian Economic Union, BRICS, the Shanghai Cooperation Organization and the Economic Cooperation Organization. “We are finding alternative routes and creating new capacities,” Pezeshkian said, describing the objective as maintaining trade, supplying the country’s needs and increasing economic resilience.

The contrast between Pezeshkian’s comments and Hariri’s warning captures the central economic challenge facing Iran. Tehran appears to be finding ways around the blockade, but circumventing it is substantially more expensive and cannot easily reproduce the enormous carrying capacity of maritime shipping.

Yet another development complicates the picture further: Iran’s stock market has hit a record high, even though this does not translate to a booming economy. The Tehran Stock Exchange’s benchmark index entered the 5.6 million range this week, the highest level in its history. According to official Securities and Exchange Organization figures cited by BBC Persian, more than 135 trillion tomans in retail investor money entered investment funds between the beginning of the 40-day war on February 28 and August 10.

Since the beginning of the war, the benchmark index has risen approximately 52 percent, compared with roughly 41 percent official inflation over the same period. The stock market has also outperformed gold and the dollar, making equities one of Iran’s best-performing major asset classes during the war.

At first glance, a record-setting stock market appears difficult to reconcile with an economy simultaneously dealing with war, a maritime blockade, high inflation and growing logistical problems. Indeed, looks can be deceiving. Several characteristics of the Iranian market help explain the apparent contradiction. A large share of Iran’s biggest publicly traded companies are exporters or commodity producers, including petrochemical, refining, mining and metals companies. A weaker rial can increase the rial value of their foreign-currency revenues even when the actual volume of production or exports does not increase.

The exchange rate used for many corporate transactions has also risen sharply since the war began. As a result, companies can report significantly higher revenues and profits in rial terms without necessarily producing or exporting more goods.

Inflation itself has a similar effect. Consumer prices in July were nearly 88 percent higher than a year earlier, according to Iran’s Statistical Center. In an economy experiencing that degree of inflation and currency depreciation, rising nominal asset prices are not necessarily evidence that the underlying economy is becoming more productive.

One particularly revealing measure is the dollar value of the stock market. Despite the record-high rial-denominated index, the market’s total dollar value has fallen from roughly $110 billion last August to around $90 billion today. In other words, Iranian equities are worth more rials than ever, but the market remains considerably smaller when measured in dollars.

Government intervention has also played a role. Following the market’s reopening after a nearly three-month wartime closure, authorities introduced extensive measures intended to prevent panic selling, including restrictions on sales by institutional investors and market makers and injections of liquidity through state-supported market stabilization funds.

The stock market rally therefore should not be read simply as evidence that Iran’s economy is thriving despite the war. But neither should the mounting problems caused by the blockade be interpreted as evidence that economic activity has stopped.

Instead, Iran increasingly appears to be developing a wartime economy built around adaptation: substituting land routes for maritime trade where possible, expanding rail connections with China and other neighbors, prioritizing essential imports, and absorbing higher transportation costs while companies and investors adjust to inflation and currency depreciation.

The question is whether that model is sustainable. Railways and highways can keep essential goods moving and prevent a maritime blockade from completely isolating the country. Iran’s large domestic market, energy resources and extensive trade relationships with neighboring states also provide buffers that smaller economies might not possess.

But geography imposes limits. Moving containers thousands of kilometers by rail or truck is considerably more expensive than moving them by sea, and the capacity of Iran’s land borders cannot easily replace its southern ports.

That is why Hariri’s warning is significant. That the head of the Iran-China Chamber of Commerce warned that overland trade is not a permanent solution to the blockade, at precisely the moment when the government is celebrating the expansion of trade with China, suggests that deep challenges remain.

For now, Iran appears to be absorbing the economic pressure rather than being paralyzed by it. Trains are replacing some ships, trade is being redirected, and the Tehran stock market is setting records. But each workaround comes with costs, and the longer the maritime blockade continues, the harder it will become to compensate for what Iran has lost at sea.