Tehran, August 28 — Six months after the United States and Israel began their coordinated military campaign against Iran on February 28, the conflict has settled into a grinding economic siege that is reshaping the country’s survival prospects. The war’s immediate trigger was Israel’s October 7, 2023, invasion of Gaza, which weakened Iran’s regional network of allies and pushed Tehran and Tel Aviv into direct confrontation, culminating in a 12-day clash in June 2025 and the current U.S.-Israeli offensive.
Washington had previously tried “maximum pressure” under Trump, aiming to cut Iran’s oil exports to zero, but when that failed to force political change, it turned to force. Now, six months in, the campaign has returned to economic coercion, this time with far greater intensity. Tehran’s leadership has struggled to project stability.
After the opening strike killed Supreme Leader Ali Khamenei, his son Mojtaba was appointed just over a week later, presented as a sign of continuity. Six months later, he has not made a verified public appearance; his image appears only in portraits carried at ceremonies and in decrees issued in his name.
The state has also rebuilt its military command after the deaths of IRGC commander Mohammad Pakpour and armed forces chief of staff Abdolrahim Mousavi, appointing Ahmad Vahidi as IRGC chief and Ali Abdollahi as chief of staff in August 10 decrees. These moves signal a preference for loyalty over reform, but the need to restructure leadership mid-war reveals a system under strain, not one operating from strength. The economic toll is now unmistakable.
Before the war, Iran exported nearly 1.8 million barrels of oil per day; that figure has fallen below half a million. Inflation is approaching 90 percent, and food prices have more than doubled compared to a year ago.
The Treasury’s new Operation Economic Outcast, launched on August 24, intensifies secondary sanctions on oil shipments, targets Iran’s “shadow fleet,” and expands enforcement of international restrictions. These tools echo the pre-war “maximum pressure” era but are being applied more aggressively, sealing the economic chokehold. Iran’s vulnerability to this pressure stems from decades of structural weakness.
Sanctions have been in place since the 1980s, and UN Security Council resolutions have compounded the strain. Promises of stability through partnerships — such as the 25-year, $400bn agreement with China and a strategic treaty with Russia signed in early 2025 — have failed to deliver the security Tehran sought.
Even before the war, officials acknowledged that sanctions alone could not explain the crisis, pointing to failures in domestic governance. Now, as the Strait of Hormuz remains closed since Iran’s retaliation on February 28, the naval blockade has fused with the closure into a single chokehold on trade. The result is a deepening divergence between narratives: one acknowledging governance failures, the other framing the crisis as purely external. The practical upshot is clear — Iran’s survival is no longer just a military question, but an economic one with no end in sight.
What comes next will be watched closely by those tracking how long this siege can last.
