Lines have grown outside gas stations across Tehran in recent weeks as the United States has tightened its blockade and threatened more severe sanctions, with some people waiting for two hours or more to fill up. The uncertainty deepened on Tuesday, after U.S. Treasury Secretary Scott Bessent vowed to fully sever the country from the global economy.
In recent days, Iranian officials have spoken of a possible reduction in heavy gas subsidies as they seek to endure the tightening blockade. The war has already battered Iran's economy and inflicted mounting pain on ordinary people. But there's no sign yet that it has brought Iran's leaders to their knees, or that it will reignite the anti-government protests that convulsed the country in January.
The lines had been growing longer well before Bessent's announcement, amid shortages caused by the American blockade and existing sanctions. And with double-digit inflation and the rial currency at a record low, Iranians are struggling to afford more than just fuel. Inflation has soared during the war, and the currency hit a record low ahead of Bessent's announcement.
Iran's President Masoud Pezeshkian accused the U.S. of resorting to economic pressure after failing to defeat Iran militarily. He said it was trying to create “social problems and economic dissatisfaction in order to throw Iran into chaos.” “Should we bow down to the problems and surrender? Absolutely not,” he was quoted as saying by the semiofficial Fars and Tasnim news agencies.
No signs of unrest, but resilience has its limits There are no signs yet that the economic discontent has translated into protests in Iran, where authorities violently crushed demonstrations at the start of the year, killing thousands. Iran has been under heavy international sanctions for decades due to its nuclear program and support for armed groups. Oil sales to China have long provided a lifeline, and it's unclear if the U.S. can cut them off.
Still, there are “always limits to resistance and resilience,” said Mohammad Farzanegan, a professor of Middle Eastern economics at the University of Marburg in Germany. UAE decision to cut trade ties could hit hard At the moment, the most effective economic pressure has come from the naval blockade. But last week's announcement from the United Arab Emirates that it was cutting off all trade and financial transactions with Iran could have longer-term effects if the country follows through, said Sascha Bruchmann, an analyst with the International Institute of Strategic Studies' Middle East office in Bahrain.
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