A split in Iran’s leadership has grown sharper recently, revealing increased impatience with the current stalemate as the economy continues to crash.
Moderate officials in particular have expressed anxiety with hardliners’ aggressive military-first approach, signaling that time is running out to obtain some economic relief as the U.S. and Iran remain in limbo with no sign of diplomatic progress.
“No matter how strong we are militarily, if the people are hungry and we do not have financial circulation, economic growth and domestic production, we will not endure,” parliamentary speaker Iran’s chief negotiator Mohammad Bagher Ghalibaf said while visiting Iraq on Friday.
In another swipe at Iran’s hawks, he added, “As someone who has experienced war, we understand the true value of peace.”
Also on Friday, President Masoud Pezeshkian, who is responsible for Iran’s economy, similarly pushed back on hardliners’ criticism about the ceasefire deal with the U.S., saying it didn’t represent capitulation.
In comments carried by state media, he also called for the war to wind down, hinting that Tehran has leverage that it must use sooner rather than later.
“It is better to end it today, as we are in a position of strength and dignity,” Pezeshkian said. “The whole world acknowledges our victory and emphasizes that America has attacked our schools, hospitals and infrastructure in violation of all regulations and is hated around the world.”
In addition, Iran’s central bank governor, admitted on state TV this week that the U.S. blockade has prevented Iran from selling it oil, a top source of revenue for the regime.
“It is a reality that we are not exporting oil,” Abdolnaser Hemmati said. “The Americans have frozen our foreign exchange reserves and do not allow us to access them.”
The blockade is also preventing critical products from coming into Iran. On top of that, the United Arab Emirates’ decision this week to impose a total embargo on trade and financial transactions with Iran will cut off a vital lifeline.
Indeed, the deputy head of Iran’s Energy Optimisation Organisation flagged limitations in fuel imports, forcing the industry to significantly tap reserves in recent months.
The stark, public remarks contrast with similar concerns that were aired anonymously about Iran’s economy and the damage being inflicted on it by the U.S. naval blockade.
Still, some officials have been on the record as well. Iran’s deputy foreign minister has said the economy desperately needs sanctions relief that a deal with the U.S. could provide.
And the head of the Iran-China Joint Chamber of Commerce has warned the U.S. blockade will have far worse consequences for the economy than the war will.
Iranian Presidential Office / AFP via Getty Images
The economic toll is already catastrophic. Inflation has soared above 80%, with prices for certain food staples up 100%. The currency, which triggered nationwide protests late last year after it collapsed, has lost a further 30% of its value this year.
The International Monetary Fund said in April Iran’s economy will shrink 6.1% this year, the worst contraction in decades. And a labor ministry official estimated that more than 1 million jobs had been lost by late May.
Experts have cautioned that Iran’s repressive regime is unlikely to be swayed by the suffering of ordinary citizens and is prepared to wait out economic hardship longer than the U.S. public can endure high gas prices.
In fact, Supreme Leader Mojtaba Khamenei recently reshuffled the country’s leadership, elevating hardliners who favor a return to war than another ceasefire deal.
An adviser to Khamenei also said Iran has shifted its military posture to be more offensive, suggesting preemptive attacks to extract concessions rather than a reactive stance focused on retaliating against U.S. strikes.
And Brig. Gen. Yadollah Javani, a senior official in the Islamic Revolutionary Guard Corps, told state media that “Iran’s actions are defensive, although they may also take on an offensive aspect in the future.”
Such tough talk comes as the U.S. has seen its own military options narrow amid depleted inventories of key munitions and readiness concerns among the Navy ships pointed at Iran.
President Donald Trump has repeatedly shied away from resuming all-out war, even after Iran crossed his “red line” by killing more U.S. troops.
Instead, he has pivoted to sanctions and recently vowed an “economic D-Day” against Iran, teasing an unprecedented level of economic warfare and isolation.
Details of the plan are thin, but Treasury Secretary Scott Bessent indicated it would entail secondary sanctions on nations and companies that engage with Iran.
“If you insist on doing business with them, then the U.S. Treasury and U.S. government will put its full might and force against you,” he told CNBC. “It’s time for our allies and the rest of the world to make a decision.”
