4 weeks after shopkeepers in Tehran’s grand bazaar shut their shops in protest over the tanking financial system, a lot of Iran is underneath an web blackout as protests, which swelled to mass demonstrations towards Iran’s clerical rule, have quietened.
The lots of of 1000’s of people that took to the streets within the wake of the shopkeepers’ protest are actually reported to be staying at house following the deaths and detention of many protesters.
Iran’s authorities has not launched an official dying toll, and estimates about how many individuals have died within the protests differ. However the widely-cited US-based Human Rights Activists Information Company (HRANA) put the dying toll at 2,615 on Wednesday this week. Iran’s authorities claims numbers have been vastly exaggerated.
Tensions with the US escalated this week when US President Donald Trump threatened to take motion if killings continued, however then appeared to again down on Wednesday night time when he stated he had acquired assurances from Tehran that the killings would cease and executions of detained protesters wouldn’t happen.
However whereas protesters could have been silenced for now, their considerations stay removed from resolved. The specter of intervention by the US remains very real, and, critically, the dire financial situations that first prompted protest within the closing days of 2025 have solely worsened.
Why have protests erupted over the financial system?
“The latest unrest was undoubtedly rooted in financial misery,” Hassan Hakimian, emeritus professor of economics at SOAS, advised Al Jazeera. “Many years of continual corruption and in depth financial mismanagement had been accentuated by worldwide financial sanctions, including to the distress of huge swaths of odd folks.”
On high of this, Hakimian stated, Iran has suffered extreme environmental-related issues in latest months – “essential water shortages, energy outages and crippling air pollution – producing an ideal financial storm”.
The worth of the Iranian rial, whose close to collapse on December 28, when it fell to a record low towards the greenback, first prompted the protest, stays at a low.
Banking ATMs are offline, flights and foreign money transactions stay restricted, casualties of the shutdown of the Nationwide Data Community, Iran’s state-controlled domestic intranet, which is basically the nation’s web.
“In case you consider the shutdown as having run for round a month, then we are able to pretty say that Iran’s financial system has run at round 50 p.c capability over that interval,” Djavad Salehi-Isfahani, an economics professor at Virginia Tech, stated. “Assuming that’s right, you’re a lack of round a tenth of the nation’s GDP if that extends to a month. How a lot that’s in {dollars} is determined by what foreign money conversion you employ. They alter on a regular basis, however, over a yr, it’s possible someplace between $20bn and $90bn.”
How have sanctions affected the Iranian financial system?
Iran’s financial system at the moment is unrecognisable from that on the time of the 1979 Islamic revolution, as battle, sanctions and shifting financial priorities have slowed it to a crawl, specialists say.
One of many essential causes is that Iran is without doubt one of the most heavily sanctioned international locations on the planet.
Financial sanctions on Iran, starting with these imposed by the US within the immediate wake of the revolution, adopted by additional tranches imposed by the United Nations over its nuclear programme in 2006, have performed a central position in tilting Iran’s financial system to the purpose of collapse earlier than Israel’s assault in June final yr, which resulted in a 12-day battle between the 2 international locations, additional undermined confidence.
The US first imposed sanctions on Iran in 1979, when the Islamic revolution overthrew the shah, or monarch, Mohammad Reza Pahlavi, whose forces notoriously used repression and torture to maintain him in energy, with out a democratic mandate.
In 1979, Washington additionally halted oil imports from Iran and froze $12bn in Iranian belongings.
In 1995, then-President Invoice Clinton issued government orders stopping US corporations from investing in Iranian oil and fuel and buying and selling with Iran. A yr later, US Congress handed a legislation requiring that the US authorities impose sanctions on international corporations investing greater than $20m a yr in Iran’s vitality sector.
In December 2006, the United Nations Safety Council imposed its personal sanctions on Iran’s commerce in nuclear-energy-related supplies and expertise and froze the belongings of people and firms concerned in actions pertaining to it.
In subsequent years, the UN toughened sanctions and the European Union additionally adopted go well with.
In 2015, Iran signed a nuclear deal – the Joint Complete Plan of Motion (JCPOA) – with the US, EU, China, France, Germany, Russia and the UK. Below that, Iran agreed to chorus from any uranium enrichment and analysis into it for 15 years.
However in 2018, throughout his first time period as president, Trump introduced withdrew the US from the nuclear treaty and reimposed all sanctions on Iran.
In 2019, the Trump administration designated Iran’s Islamic Revolutionary Guard Corps (IRGC) a International Terrorist Group. Moreover, he imposed sanctions focusing on petrochemicals, metals (metal, aluminium, copper) and senior Iranian officers.
On January 3, 2020, after the US assassinated Qassem Soleimani, the pinnacle of the IRGC’s elite Quds Pressure, in a drone strike in Baghdad, Iraq, it additionally imposed extra sanctions on Iran.
In September 2025, the UN’s sanctions had been reimposed on Iran over its nuclear programme when the UNSC voted against completely lifting financial sanctions on Iran.
At the moment, underneath US and different worldwide sanctions, almost all of Iran’s oil revenues stay frozen. Moreover, belongings held abroad are frozen, commerce is restricted, and banks have been focused.
Monetary networks and firms linked to the event of Iran’s nuclear, ballistic-missile community and entities, such because the Islamic Revolutionary Guard Corps, which many within the worldwide neighborhood maintain accountable for home repression, are additionally sanctioned and should not permitted to do enterprise with the US or different nations levying sanctions.
Now, China buys greater than 80 p.c of Iran’s shipped oil, knowledge for 2025 from analytics agency Kpler reveals. A lot of it’s transported by a “shadow fleet” of oil tankers which fly false flags or change off monitoring gadgets to keep away from sanctions.
How has this affected odd folks in Iran?
Even earlier than the battle with Israel final yr, many economists regarded Iran’s financial system as locked in a interval of “stagflation”, as sluggish development – estimated by the Worldwide Financial Fund at simply 0.6 p.c per yr – mixed with hovering costs, robbed many in Iran of their final hopes for a steady future for themselves and their households.
Economists usually contemplate an annual financial development price of two to three p.c to be perfect.
Over the previous eight years, Iranians’ buying energy – the worth of the cash they must spend, in contrast with costs – has fallen by greater than 90 p.c. Meals costs have soared by a median of 72 p.c in contrast with final yr, because the rial has collapsed towards the US greenback, official statistics present.
In December 2025, one US greenback was priced at about 1.36 million rial within the open market, the rial’s worst rate ever.
Then, in early January, as protests had been in full swing, the Iranian rial dropped even additional to 1.42 million towards the US greenback – a 56 p.c drop in worth in simply six months and a pointy decline from about 700,000 in January 2025.
In the meantime, almost one in 5 younger folks is out of labor.
Why is the rial alternate price essential?
“One of many key financial indicators that basically issues to folks is the alternate price,” Iranian American economist Nader Habibi defined. “Individuals pay actual consideration to the place the greenback is towards the rial and, as their uncertainty grows, so does the quantity of exhausting foreign money they retailer, similar to {dollars} or gold.”
In line with Habibi, shortages within the provide of exhausting foreign money following Israel’s assault in June final yr, in addition to competitors for funds from a authorities scrambling to rebuild and keep its defences after 12 days of battle, despatched confidence within the Iranian financial system reeling and accelerated the collapse of the rial.
“The fast devaluation of the rial was greater than even conservative parts of society, such because the Bazaaris, might address,” Habibi stated, referring to the widespread identify for the shopkeepers who work within the grand bazaar.
“Think about you need to promote a TV. Say you promote it and the subsequent day it is advisable to purchase one other to replenish your stock,” he defined. “Every part is determined by the flexibility to purchase a brand new TV at a value decrease than that which you bought the final one for. Nevertheless, after the rial collapsed, that was one thing the Bazaaris now not felt they might do, in order that they shut their retailers and took to the streets.”
What’s going to occur now?
“The protests have calmed within the final two or three days due to the sheer variety of folks killed. That’s why folks didn’t exit,” one Tehran resident, who didn’t want to be named, advised Al Jazeera.
Nevertheless, folks stay indignant in regards to the state of the financial system, specialists say. “The truth is that the regime has no fast repair to alleviate the dire scenario it confronts this time. Even when it had been to achieve suppressing the protests by brute drive, the underlying points is not going to be going away,” Hakimian, the economics professor, stated.
Outdoors intervention by the likes of the US is unlikely to assist, he added.
“These favouring kinetic motion overlook its poor file within the area and its probability to complicate an already troublesome scenario, whether or not via collateral injury in Iran or wider regional battle.”
