Manila, August 28 — Six months after the United States and Israel launched their coordinated military campaign against Iran on February 28, the conflict has settled into a grinding economic siege that is reshaping daily life across the country. The war’s origins trace back to the October 7, 2023 Gaza conflict, which weakened Iran’s regional allies and pulled the two powers into direct confrontation, culminating in a June 2025 clash and the current campaign.
Tehran’s leadership now faces a stark choice: survive the military assault or endure an economic strangulation with no end in sight. The human cost is visible in Tehran’s streets, where inflation has surged to extremely high levels and food prices have more than doubled since last year. Iran’s oil exports, once near 1.8 million barrels a day, have fallen below half a million, choking state revenues. The Treasury’s Operation Economic Outcast, launched on August 24, has intensified secondary sanctions on oil shipments and targeted the so‑called shadow fleet, tightening the chokehold on Iran’s remaining financial lifelines.
A leadership vacuum deepens the uncertainty. After the opening strike killed Supreme Leader Ali Khamenei, his son Mojtaba was appointed just over a week later, but six months on he has yet to make a verified public appearance.
His portrait is carried through city squares and at mourning ceremonies, and decrees are issued in his name, while rumors about his condition persist. This absence has forced the state to rebuild its military command structure in the middle of a war, appointing Ahmad Vahidi as IRGC chief and Ali Abdollahi as chief of staff on August 10. The appointments signal continuity but also highlight a command still in flux.
The economic pressure is compounding Iran’s long‑standing vulnerabilities. Years of reliance on sanctions dating to the 1980s and UN resolutions have left its economy structurally exposed, a reality acknowledged even by officials like Pezeshkian and Ali Khamenei before the war.
Neither the 25‑year, $400 bn partnership with China nor the strategic treaty with Russia in early 2025 delivered the stability Tehran sought. Now, as Washington enforces a naval blockade of the Strait of Hormuz — closed since February 28 and never reopened — the siege is forcing a longstanding divergence in Iran’s crisis narratives into the open. The state’s ability to withstand this economic war will determine not just its survival, but the future of a region already frayed by conflict.
What comes next will depend on whether Tehran can find new allies or if the pressure will finally fracture its resolve.
