Iran Vows Resilience Amid Intensifying US Economic War and Internal Divisions

Iran has vowed to withstand intensifying United States pressure and maintain control over the Strait of Hormuz despite acknowledging a severe economic toll caused by war and sanctions. President Masoud Pezeshkian stated that Iranian foreign trade has shrunk by approximately one third, with exports and imports falling nearly 35 percent due to a US naval blockade and sanctions. Annual inflation in Iran reached 66 percent last month. Supreme Leader Mojtaba Khamenei, who has remained out of public view since being injured in an attack on February 28, issued a written statement urging the government to address unemployment, inflation, and market management.

The conflict has entered a new phase as the Trump administration implements what Treasury Secretary Scott Bessent calls an economic D Day. This strategy focuses on economic asphyxiation to isolate Iran. The US Treasury has imposed sanctions on Egypt's Banque Misr for doing business with Tehran and targeted an entity in Hong Kong and an individual linked to Iran's Bank Melli. While Washington has warned of secondary sanctions for trade partners, it has not yet penalized major partners like China and India. China, Russia, and Turkey have indicated they will continue their agreements with Iran.

Internal divisions have emerged within the Iranian leadership regarding how to proceed. Pragmatists led by President Pezeshkian advocate for a conclusive agreement to ease domestic crises, citing a short lived June memorandum of understanding as a potential model. Conversely, hardline conservatives distrust Washington and argue that not losing the war constitutes a victory. This internal struggle is framed by center left sources as a pivotal power struggle between those seeking a deal and those prioritizing ideological endurance. Meanwhile, center right sources frame the situation as a failing US military effort that has shifted to an economic war which may be equally ineffective given Iran's use of ghost fleets to trade hydrocarbons.

Diplomatic efforts continue as Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani recently met with Iranian leaders in Tehran to discuss returning to open shipping through the Strait of Hormuz. Iranian officials described these talks as creative, though the IRGC maintains that Tehran is in no rush to reopen the strait and accuses the US of spreading false statements to manipulate energy prices.