Trump’s ‘economic D-Day’ targets Tehran: Ordinary Iranians face even more pain

Dubai: The rial is collapsing, inflation is eating into incomes and ordinary Iranians are struggling to afford everything from food to medicine. Yet decades of sanctions have taught Tehran not only how to evade Western pressure, but how to shift much of its cost onto its own population while protecting the institutions essential to the regime’s survival.

That uncomfortable reality lies at the heart of US President Donald Trump’s latest attempt to bring Iran to its knees economically.

US Treasury Secretary Scott Bessent declared on Monday that an “economic D-Day” had begun against Tehran, promising the “single greatest financial offensive ever” and warning that countries continuing to enable the Islamic Republic risked becoming “global pariahs”, AFP reported.

Iran responded with defiance.

Deputy Foreign Minister Kazem Gharibabadi portrayed Washington’s resort to financial warfare as evidence that its military campaign had failed, while Foreign Ministry spokesman Esmaeil Baqaei warned countries against cooperating with the US effort, saying doing so would “definitely have its own consequences”.

But behind Tehran’s defiance, ordinary Iranians tell a very different story.

“It’s really very difficult. I don’t think people can really take this much longer,” Sarah Hassanbeigi, a 32-year-old pharmacist in Tehran, told AFP.

People are already paying

By the Iranian government’s own admission, the economic situation is dire.

“We are apologetic that these problems exist,” President Masoud Pezeshkian said, describing Iran as being in a full-scale economic, military and security war, according to state media cited by CNN.

Iran’s inflation rate reached 66 per cent in July, while food prices were 128 per cent higher, Reuters reported. The rial has continued to lose value, squeezing household purchasing power.

CNN spoke to Iranians describing empty markets, unaffordable goods and shortages. One Tehran resident said some essential medicines were becoming difficult to obtain.

THE PRICE IRANIANS ARE PAYING

• 66% — July inflation

• 128% — rise in food prices

• 80% — fall in oil exports through Hormuz

• ½ — monthly medication one kidney patient says she can afford

• $9billion — Iranian shadow-banking activity through US correspondent accounts in 2024

• THE SANCTIONS PARADOX

• People: Higher prices → weaker purchasing power → medicine shortages → pressure on jobs and businesses

• Regime: Sanctions-evasion networks → oil revenue → politically connected intermediaries → key institutions protected

• Result: Iran can become poorer without its regime necessarily becoming weak enough to capitulate.

A 34-year-old woman with kidney disease said she could afford only half her monthly medication. She said some patients were unable to attend dialysis appointments, while others had stopped chemotherapy because they could no longer afford it.

These are the people likely to feel the next round of economic pressure first.

Energy strategist Umud Shokri told CNN that further sanctions would weaken the rial, push inflation higher and increase the cost of imports, hitting wage earners, pensioners, small businesses and lower-income families particularly hard.

Iran is already losing vital oil revenue

The latest squeeze comes as Tehran is already suffering a dramatic loss of oil income.

Iran’s oil exports through the Strait of Hormuz have plunged from around 2 million barrels a day before the war to just 400,000 barrels a day by mid-August, according to maritime tracker Kpler, AFP reported — a fall of about 80 per cent.

Yet Iran has survived crushing international sanctions for decades.

Before the war, it continued exporting large quantities of oil, overwhelmingly to China, while building an elaborate sanctions-evasion system involving front companies, brokers, exchange houses, shadow banking and a “dark” tanker fleet.

Oil can be moved through ship-to-ship transfers and opaque ownership structures, while payments can bypass the dollar through Chinese yuan, barter and other arrangements.

The result is a peculiar resilience: Iran can become considerably poorer without its regime necessarily becoming incapable of functioning.

Politically connected institutions and intermediaries can also be partly insulated from the pain, CNN reported, with some benefiting from smuggling, currency distortions and control over scarce imports.

Ordinary households have no such protection.

Whose ‘pain threshold’?

That helps explain why economic pressure that has inflicted enormous hardship has repeatedly failed to force the Islamic Republic to capitulate.

“They are willing to weather the storm, and they are willing to go through the pain,” Dina Esfandiary, Middle East geoeconomics lead at Bloomberg Economics, told CNN.

She argues that none of the measures Trump is contemplating is likely, by itself, to make Iran surrender.

But there is a crucial distinction in describing Iran as having a “high pain threshold”: the pain is not distributed equally.

The leadership does not experience a collapsing household budget like a pensioner. The security establishment does not confront medicine shortages like a chronically ill patient.

For the regime, the critical question is whether it can continue financing and protecting the institutions necessary for its survival.

For many Iranians, the question is whether they can afford basic necessities.

What Tehran really fears

There is, however, a point at which public suffering becomes dangerous to the regime: when economic pain turns into political revolt.

Before the war, soaring prices and the collapsing currency helped drive Iranians onto the streets. Economic grievances broadened into demands for political change, prompting a severe government crackdown.

Reuters has reported that Iran’s rulers are again concerned about unrest as economic conditions deteriorate.

That distinction is crucial. Tehran has demonstrated that it can tolerate enormous economic hardship provided the hardship remains politically manageable.

There are also signs of pressure within the leadership over how long the conflict should continue.

Last week, Pezeshkian said Iran should “bring the war to an end now”, arguing that it could do so from a position of “power and dignity”. His comments came as Supreme Leader Mojtaba Khamenei moved in a harder direction, appointing hardliners to key security positions.

Hassanbeigi, the Tehran pharmacist, was more direct.

“My personal opinion is that Iran should compromise now,” she told AFP.

Can Trump break the model?

For Washington, the challenge is to make sanctions hurt the regime rather than principally the population.

Experts say genuinely choking Tehran’s revenues would mean targeting the central arteries of its sanctions-evasion network — major oil buyers, refineries, banks, tanker managers, insurers, ports and companies facilitating ship-to-ship transfers.

That inevitably raises the stakes with China, the principal buyer of Iranian oil.

Trump has threatened “tremendous economic consequences” for countries providing Tehran with a lifeline, while Bessent’s warning of “global pariah” status suggests Washington is increasingly prepared to target Iran’s enablers.

The coming offensive will therefore test not simply how much economic pain Washington can inflict, but where that pain lands.

Iran’s experience under decades of sanctions offers a sobering lesson: an economy can crack without the regime cracking with it.

For Tehran, the danger may come only when the suffering it has learned to withstand — and pass down to its people — becomes anger it can no longer contain.