Iranian president says war has worsened economic crisis

Iranian President Masoud Pezeshkian conceded on Saturday that the country's economic conditions have significantly worsened since the onset of hostilities with the United States and Israel, citing collapsing oil revenues and widespread industrial damage. In remarks carried by Iranian media, he attributed rising consumer prices to higher import costs and reduced state income resulting from a sharp decline in petroleum exports. "We used to sell oil, but now we cannot sell it," he stated, acknowledging the severe impact of international pressure on the nation's primary revenue source.

Industrial destruction and tax revenue collapse

Pezeshkian revealed that military strikes during the conflict have destroyed a substantial number of factories, further compounding the economic downturn. The damage has not only disrupted production but has also eliminated tax revenue streams from the industrial sector. "We can no longer collect taxes from factories," he said. "Not only that, but we also have to provide them with funds so they can continue operating." The president noted that Iran's challenges have "multiplied many times over" while revenues have simultaneously declined, creating a unsustainable fiscal gap.

Supply chain disruptions and regional context

The Iranian leader explained that imported goods now reach the country through alternative, less direct routes, driving up final consumer costs. The economic strain comes amid broader regional tensions that escalated on Feb. 28 when Israel and the US launched coordinated strikes targeting Iranian military, nuclear, and energy infrastructure. Tehran responded with missile and drone attacks on American and Israeli assets across the region. Although Iran and the US signed a memorandum of understanding on June 18 through Pakistani and Qatari mediation, which ended active hostilities and initiated negotiations toward a final agreement, talks have since stalled over disputes concerning maritime security and freedom of navigation through the Strait of Hormuz—a critical export route for Gulf energy supplies.