U.S. sanctions on Iran are taking a massive toll on the economy. Considered an energy superpower because it holds about 10% of the world's proven oil reserves, it has nevertheless been suffering through an energy crisis since early 2024.
Inflation is reported at 35%, but it's probably higher given that a large part of Iran's economy takes place underground. The Islamic Republic's GDP growth rate is an anemic 3%. Sanctions and the "Maximum Pressure" campaign by the U.S. have created a huge unemployment problem with youth unemployment (15-24) at 20%. For university graduates, the rate is 12.4%.
The last thing that the Iranian leadership wants to do is negotiate over its nuclear program with the Great Satan's most hated representative, Donald Trump.
The "last thing" has arrived, and the Iranian clerical fascists are backed into a corner.
Iran's President Masoud Pezeshkian paints a stark portrait of the choices facing his country. He claims that the economic conditions have not been this bad since the Iran-Iraq War of the 1980s. The private fear being expressed in Iran by the less religious and ideological leaders is that the nation is close to another spasm of protests of the kind that have roiled the Islamic Republic since the early part of this century.
"There is no question whatsoever that the man who has been the Supreme Leader since 1989 [Ayatollah Ali Khamenei] and his foreign policy preferences are more guilty than anybody else for the state of affairs," said Alex Vatanka, director of the Iran Program at the Middle East Institute think-tank in Washington.
In the Middle Class in Iran, most families have reached the end of their endurance.
"The situation worsens daily. I can't afford my rent, pay my bills, or buy clothes for my children," said Alireza Yousefi, 42, a teacher from Isfahan. "Now, more sanctions will make survival impossible."
Trump, realizing the moment for negotiations that would be of maximum benefit for the U.S. has arrived, sent a letter to Supreme Leader Khamenei inviting him to the negotiating table.
Khamenei spurned the advance.
"If we enter negotiations while the other side is imposing maximum pressure, we will be negotiating from a weak position and will achieve nothing," Iran's top diplomat Abbas Araqchi told an Iranian newspaper.
And your point, sir? It's either that or stand by for the coming explosion of protests. You choose.
"The other side must be convinced that the policy of pressure is ineffective — only then can we sit at the negotiating table on equal terms," he said.
Bravely spoken. And utterly meaningless.
One senior Iranian official said there was no alternative but to reach an agreement, and that it was possible, though the road ahead would be bumpy given Iran's distrust of Trump after he abandoned the 2015 deal.
Iran has staved off economic collapse largely thanks to China, the main buyer of its oil and one of the few nations still trading with Tehran despite sanctions.
Oil exports slumped after Trump ditched the nuclear deal but have recovered in the past few years, bringing in more than $50 billion in revenue in both 2022 and 2023 as Iran found ways to skirt sanctions, according to U.S. Energy Information Administration estimates.
Yet uncertainty looms over the sustainability of the exports as Trump's maximum pressure policy aims to throttle Iran's crude sales with multiple rounds of sanctions on tankers and entities involved in the trade.
For Iran, it's not going to get any better anytime soon. Leaders will probably realize at some point soon that they can get a better deal now rather than later. The clock is ticking down to the next popular explosion.
Since 2002, the mass protests that bubble to the surface every couple of years have been put down with increasing brutality. From September 2022 to September 2023, 550 people were murdered by authorities during the protests over the death of the young Kurdish woman Mahsa Amini, who was taken off the streets by morality police and died a short time later in the hospital. At least four people were executed for "religious" crimes.
Khamenei and his thugs don't want a repeat of those demonstrations. That prospect may force the ayatollah to swallow his pride and come to the table.
