“To me, this isn’t D-Day. It’s Desperation Day.” That was the verdict of Aaron David Miller, a former US diplomat now at the Carnegie Endowment, on the sanctions Treasury Secretary Scott Bessent unveiled with a reference to the 1944 landings in France.
Six months after US and Israeli forces attacked Iran on February 28, killing its supreme leader and maiming his son and successor, the government is under economic siege. It still holds power. Analysis in the Sunday Times called the war’s endgame “a costly stalemate.”
From missiles to money
The latest US measures shifted the fight from missiles and airstrikes to Iran’s oil revenues, banks and trading partners. Bessent said Washington will cut off the financial lifelines sustaining the economy, while a US-led naval blockade restricts Tehran’s oil exports and its access to hard currency.
Iran’s own figures show the damage. Annual inflation reached 66 percent in July, and consumer prices were 87.9 percent higher than a year earlier, according to the Statistical Centre. Food prices rose 128 percent year on year. President Masoud Pezeshkian conceded as much: “Our problems have multiplied several times over, while our income has also fallen.”
The State Department sees it as a winning hand. “The Iranian economy is in free fall and the regime’s military has been decimated,” spokesperson Tommy Pigott said. “President Trump holds all the cards, and we are cutting off every financial lifeline the regime has remaining.”
Will it work?
Skeptics are not hard to find. Alan Eyre, who worked on Iran as a US diplomat, doubts Washington has the international support or the bureaucratic machinery to make the sanctions stick. Unlike the multilateral campaign before the 2015 nuclear deal, he said, these measures rest on public threats instead of sustained diplomacy with allies.
Tehran is betting Trump will not take the last step: enforcing secondary sanctions on the countries keeping its economy afloat, above all China and India. A senior Iranian official told Reuters that China would not stop cooperating with Iran merely to serve US interests. “If the pressure increases, Iran’s approach will change too,” he said.
Michael Knights of Horizon Engage argued that the blockade may matter more than the sanctions, since Iran’s problem is now how to break out of pressure, not how to survive it. He said Iran could copy its Houthi allies in the Red Sea, with periodic attacks and intermittent talks aimed at making the conflict too costly for Gulf states to tolerate.
The Gulf states want the conflict contained without an Iranian victory. Abdulaziz Sager, chairman of the Gulf Research Center, said they are unconvinced that sanctions alone can rapidly change Iran’s behaviour. Significant political change, he said, is unlikely to come quickly.
Survival is not strength
The Al-Rawabit Center for Research and Strategic Studies makes a related point: the Iranian economy has absorbed shock after shock, and that persistence can be mistaken for resilience. Households cut spending, burn through savings and take second jobs. Businesses stop investing and protect what they have. An economy can keep functioning, the center wrote, while losing the resources it needs to recover.
The regime has its own worry. Hardship has repeatedly erupted into nationwide protests, and in January demonstrations over economic distress were crushed by the Revolutionary Guards and the Basij, with thousands killed. This month Hossein Taeb, an architect of earlier crackdowns, was appointed to lead the Basij.
Sources
- The Hidden Cost of Survival: Iran’s Eroding Economic Resilience
- ANALYSIS | After six months, the Iran war has reached its endgame: a costly stalemate
