How long can Iran withstand the economic pain of the U.S. blockade?

Prices of staples like rice, meat have risen sharply in recent weeks, adding to the burden on Iranian households

- Benoit Faucon, Georgi Kantchev & Sune Engel Rasmussen

There is only so much that can be done to prevent a complete collapse of the economy even with the help of allies.

At the turn of the year, Iran’s regime faced its biggest protests in years as anger spread over spiraling prices and a crumbling economy. Thousands were killed in a vicious crackdown.

Now, battered by war and suffocated by a U.S. naval blockade, the country is in even worse shape as Washington presses Tehran into a deal to reopen the Strait of Hormuz, leaving its leaders weighing whether they can withstand the pain long enough to extract more concessions.

Already, the blockade has choked off oil export revenue and raised the risk that Iran will have to shut down wells as it runs out of places to store crude. Iranian officials are urging people to conserve fuel, electricity and water—a sign that the economic squeeze is spreading from oil terminals and factories into daily life. Critical industries have been damaged. More than a million Iranians have been left out of work as the national currency falls to record lows.

Prices of staples such as rice, meat, bread and cheese have risen sharply in recent weeks, adding to the burden on Iranian households and raising the pressure on the government to prevent a repeat of the last wave of street protests. Iranian President Masoud Pezeshkian and other pragmatists realize the slide will have to be stemmed if they are to maintain stability, meaning the worsening economic picture is becoming a key pressure point in the negotiations with Washington.

“The main war is in the economic field,” Pezeshkian told members of the Tehran Chamber of Commerce Wednesday. “If you fail, the country fails.”