Tehran, August 29, 2026: Iran’s top leadership has acknowledged the growing economic toll of its war with the United States, with Supreme Leader Ayatollah Mojtaba Khamenei urging the government to address worsening economic hardship and President Masoud Pezeshkian saying foreign trade has declined by nearly a third amid US sanctions and a naval blockade.
Despite the mounting economic pressure, Tehran showed no sign of retreat on Saturday, vowing to withstand Washington’s campaign, continue pursuing diplomacy and maintain what it described as control over the Strait of Hormuz, the strategically vital waterway through which Iran can exert significant leverage over global energy markets.
The Iranian government said tackling economic pressures caused by sanctions and the war had become a central priority. Its measures include efforts to curb inflation, stabilise markets, create employment, channel investment into domestic production and gradually reduce dependence on the US dollar.
The developments come six months after the United States and Israel launched military action against Iran. Diplomatic negotiations remain deadlocked, while President Donald Trump’s administration has intensified financial pressure on Tehran under what it has described as an “economic D-Day” campaign.
Washington has warned countries to reduce business ties with Iran or risk secondary sanctions, although the US Treasury Department has so far stopped short of imposing penalties on major Iranian trading partners such as China and India, moves that could have wider repercussions for the US and global economies.
The Treasury recently imposed sanctions on Egypt’s Banque Misr over its dealings with Tehran and proposed measures that would restrict the bank’s branches in the United Arab Emirates from accessing dollar transactions.
Egypt’s central bank said it and the foreign ministry were in contact with US officials, while stressing that the measure was limited to Banque Misr UAE’s US dollar transactions with correspondent banks.
Banque Misr said it was reviewing the Treasury notice and maintained that its UAE branch continued to provide banking services in accordance with applicable rules and procedures.
The United States also imposed sanctions on a Hong Kong-based entity and an individual linked to Iran’s Bank Melli, according to a notice published by the US Treasury.
The latest sanctions have added to the economic damage caused by the war, with Iran’s annual inflation reportedly reaching 66 per cent last month.
Supreme Leader Mojtaba Khamenei, who has not appeared publicly since the February 28 attack that killed his father and predecessor, Ayatollah Ali Khamenei, called on the government to take urgent steps to address the economic crisis.
“There is the need to seriously address the chain of economic and livelihood challenges, such as inflation, unemployment, management of prices and the market for goods and services,” Khamenei said in a written statement attributed to him.
President Pezeshkian separately told Iranian state media that the country’s exports and imports had fallen by nearly 35 per cent because of US sanctions and the naval blockade of Iranian ports.
Despite the disruption, Pezeshkian said Iran had managed to sell around 90 million barrels of oil during the short-lived memorandum of understanding reached with Washington in June, when the United States temporarily permitted Iranian oil exports.
While Washington continues its economic pressure campaign, regional countries have stepped up diplomatic efforts aimed at reviving negotiations and ending the conflict.
Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani met Iranian leaders in Tehran on Thursday and stressed the importance of restoring unrestricted commercial shipping through the Strait of Hormuz.
Iranian Foreign Minister Abbas Araqchi described the discussions as “creative”.
In a statement issued Saturday, Tehran said diplomacy and defence represented “two complementary, coordinated and inseparable wings” for safeguarding Iran’s national interests, security and territorial integrity.
The government said it would pursue both diplomatic and defence tracks in a balanced manner, signalling that negotiations would continue without abandoning its military posture.
Qatar, a US ally and neighbour of Iran, and Pakistan previously helped broker an Islamabad memorandum of understanding that led to a brief ceasefire. However, disagreements over the Strait of Hormuz subsequently contributed to the collapse of the arrangement.
Before the war, the strategic waterway carried around 20 per cent of global oil and liquefied natural gas supplies, making any prolonged disruption a major concern for international energy markets.
US military commanders have claimed that American forces cleared sea mines from the strait that had allegedly been laid months earlier by Iran’s Islamic Revolutionary Guard Corps.
President Trump has repeatedly said that the Strait of Hormuz remains open. The Revolutionary Guards’ naval forces, however, rejected the claim, calling it “an obvious lie” and maintaining that the waterway remains closed to vessels without Iranian permission.
Preliminary shipping data indicated that only seven commodity vessels transited the strait on Thursday, down from 17 the previous day and below the 10-day average of 15.
