Irans

There is a “strong indication” that Iran played a role in Sunday’s suspected terror plot near Royal Air Force (RAF) Fairford base in South West England, the prime minister confirmed Wednesday, Anadolu reports.

“There is indeed a strong indication that Iran played a part,” Andy Burnham confirmed in an interview with Sky News.

However, he added: “This remains, though, a complex and very serious police investigation. So I can’t say any more at this stage.”

Five men from London, age between 23 and 25, were arrested on suspicion of explosives offences and terrorism.

The incident came after a farmer discovered three vans blocking a road near the RAF base in Gloucestershire at 1.30 am local time (0030GMT).

Later, it was understood that one of the suspects had contacted authorities around an hour before, a development first reported by The Times newspaper.

READ: UK foreign minister denounces Netanyahu government, vows tougher action over Gaza

The Strait of Hormuz remains the most perilous choke point on the global map as Iran continues to disrupt traffic by attacking vessels. A recent proposal by the Islamic Republic to open the waterway within seven days raised hopes that the situation could go back to normal. United States President Donald Trump, however, rejected the offer.

To understand the strategic calculus behind his high-stakes decision, one must look beyond the immediate tactical noise and peer into the deeper logic of deterrence.

On its surface, the rejection of a temporary truce in the world’s most vital energy corridor appears to be a reckless gamble – a provocation inviting the very conflagration the West seeks to avoid. But viewed through the lens of cold realism, the rejection was not only a calculated necessity; it was the right decision.

The Iranian regime’s proposal was a classic exercise in asymmetric diplomacy. It offered a brief window of stability, a transactional pause, in exchange for what would have amounted to a de facto relaxation of American pressure. To accept such terms would have meant embracing the delusional belief that a terrorist power can be bribed into good behaviour by accepting its terms of engagement.

Had Washington accepted, it would have validated Iran’s self-assumed right to turn the spigot of global commerce on and off at will. By flatly rejecting the offer, Trump signalled that freedom of navigation is not a chip to be bartered in a week-long bazaar, but an absolute, non-negotiable prerequisite of international order.

The timing of this gambit – on the eve of the critical midterm elections – has naturally drawn the ire of the domestic political class. Critics argue that risking an energy crisis and a subsequent spike in oil prices weeks before Americans head to the ballot box is an act of political self-immolation. This view, while superficially plausible, misunderstands both the nature of the electorate and the psychology of our adversaries.

The Iranians chose this moment to put forward their proposal precisely because of the midterm elections. They are sophisticated observers of American domestic politics. They calculated that an administration facing an electoral test would be paralysed by the fear of rising fuel prices and would eagerly grasp at any diplomatic lifeline, however flimsy, to keep the peace until November.

Had Trump capitulated to save Republicans a few points at the polls, he would have handed Iran a profound psychological victory. He would have demonstrated that American foreign policy is subservient to the domestic election calendar – a vulnerability that every autocracy from Moscow to Beijing would immediately exploit.

By taking the gamble before the midterm elections, Trump has turned the tables. He has demonstrated that his administration is willing to absorb short-term political pain in pursuit of long-term strategic clarity. This is the essence of credible deterrence.

Deterrence is not merely a function of military hardware; it is a function of perceived will. When an adversary believes you are too weak, too compromised, or too worried about the next election cycle to defend your core interests, deterrence fails. By rejecting the seven-day proposal, the Trump administration proved it could not be blackmailed by the electoral calendar.

Trump’s decision reflects a sophisticated understanding of the regime in Tehran. The Islamic Republic is currently facing an acute internal economic crisis, a direct consequence of the sustained American maximum-pressure campaign.

The seven-day proposal was not a gesture of Iranian confidence; it was a sign of desperation disguised as a diplomatic overture. It was an attempt to buy breathing room, fragment the expanding international coalition against Tehran and project an image of being in control to its own restive population.

To grant Iran that reprieve would have been to throw a lifeline to an antagonist regime on the ropes. Clearly, this offer was only made because US strategy is working and Iran’s economy is cratering.

History teaches us that truces with terrorist regimes are rarely precursors to permanent peace; they are merely opportunities for the aggressor to rearm, recalibrate and choose the next moment of confrontation on more favourable terms. A short-term guarantee of open shipping lanes implied that any day, the threat could return, magnified by the legitimacy Washington would have afforded to Iran’s leverage.

The critics who cry havoc at this decision are the heirs of the foreign policy establishment that spent decades managing decline through endless, inconclusive and failed negotiations. They prefer the comfortable fiction of a temporary deal to the hard reality of a sustained geopolitical contest.

President Trump’s gamble is risky, yes. The potential for miscalculation in the narrow waters of the Gulf is always present. But the risk of inaction, or of a pliant accommodation, is far greater.

By holding the line, the administration has reaffirmed a foundational principle of US global stewardship: the US will not permit rogue states to hold the global economy hostage.

The rejection of the Iranian proposal is the correct path because it chooses clarity of American resolve over partisan political convenience. It signals to the regime in Iran that its leverage is artificial and its economic isolation is permanent unless its behaviour changes.

This November, American voters will decide the composition of the US Congress based on a multitude of domestic and foreign policy factors. But on the global stage, Trump remains steadfast by demonstrating that principle trumps political expediency.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.

Donald Trump has rejected Iran’s latest proposal to end the war and reopen the Strait of Hormuz as experts say the United States president believes Washington has more to gain by waiting than by accepting Tehran’s terms at this moment.

“I reject their proposal,” Trump told reporters on Saturday, arguing that Iran wants an agreement because it is “losing so badly”.

“They want to make a deal, and I think that’s fine,” Trump said. “I’d like to make a deal too. But that deal would not be acceptable.”

On Sunday, Iranian ⁠⁠Foreign ⁠⁠Minister Abbas Araghchi said Tehran had ⁠⁠seen the initial reaction from ‌‌Trump to its proposal but had yet to receive a response through ⁠⁠mediators. In the latest diplomatic efforts, Qatar has played a role in mediating talks between Iran and the US on the sidelines of the United Nations General Assembly meeting in New York.

Iran’s seven-day proposal included Washington lifting its naval blockade of Iranian ports, waiving sanctions on Iranian oil sales, releasing an estimated $12bn in frozen Iranian assets and observing a wider regional ceasefire, including in Lebanon and Yemen.

Iran would then reopen the Strait of Hormuz and begin negotiations with Washington on a final agreement.

The latest proposals are similar to the June memorandum of understanding (MoU) the two countries signed. But the MoU collapsed last month due to differences on the terms of the deal, which resulted in an escalation in attacks, particularly in and around the Strait of Hormuz, which essentially remains under Iranian blockade.

According to experts, Trump’s rejection suggested that while both sides continue to publicly leave the door open for diplomacy, they remain far apart over who should make the first concessions.

“Trump’s calculation looks fairly straightforward. He believes the combination of the naval blockade and economic isolation is finally squeezing Iran hard enough that Tehran’s latest proposal is evidence of weakness rather than an offer Washington needs to seize,” Andreas Krieg, associate professor at King’s College London, told Al Jazeera.

His public argument that Iran is “losing badly” is important because it suggests he thinks time is improving the US bargaining position, Krieg said.

Why does Trump think he can wait?

A key part of Trump’s calculation appears to be a belief that the economic pressure on Iran has not yet run its course.

The Trump administration has escalated economic pressure on Tehran, tightening its naval blockade while imposing sanctions targeting Iranian oil revenues and threatening secondary sanctions against countries doing business with Tehran.

Last week, the US imposed aviation sanctions on Iran, disrupting flights. This came weeks after US Treasury Secretary Scott Bessent announced an economic pressure campaign against Iran, promising to target Tehran’s financial interests across the world.

Richard Weitz, a senior nonresident associate fellow at the NATO Defence College, told Al Jazeera that the White House may believe it can “wait a bit and get better terms”.

There is also concern in Washington about Iran’s proposed sequencing, he said.

Therefore, Weitz said Washington may be calculating that “economic pressure over time will induce the Iranian government to make more concessions”.

“This is what occurred arguably a decade ago, leading to the 2015 Iran nuclear deal as the Iranian government decided it [the US] needed to end the economic sanctions in return for making concessions on its nuclear programme,” he added.

It is, therefore, possible that “we could see the same kind of trade-off in the coming months”.

Iran could make Trump ‘pay’

However, waiting for a deal also carries considerable political risk for the US president, experts said, because his Republican Party could lose November’s midterm elections.

A late August Reuters/Ipsos poll suggested 63 percent of Americans opposed the US-Israel war on Iran while 31 percent supported it. Rising fuel and transportation costs could also feed into broader cost-of-living concerns before the elections.

The problem for Trump is that time does not only increase pressure on Iran, Krieg said. “The gamble is that time cuts both ways,” he noted.

With the midterms approaching, Trump does not want to appear to lift the blockade, waive oil sanctions and release Iranian assets simply to regain access to a waterway that Iran itself disrupted, Krieg said.

“But every additional week also means elevated energy prices, continued military exposure and mounting pressure on Gulf partners.”

The essential closure of the Strait of Hormuz has disrupted oil and gas flows from the Gulf nations, which depend on energy exports to finance their budgets.

Mohamad Elmasry, a professor at the Doha Institute for Graduate Studies, told Al Jazeera that Iran’s proposal could be viewed as “kind of throwing a bone to Trump” by offering a potential route towards lower oil and gas prices before the vote.

However, Iran may decide “to make Trump pay for declining the proposal and the increased economic pressure the country is under”, he told Al Jazeera.

“They may decide that this is the time to escalate … just as the midterms are approaching.”

The Republican Party is not doing well in the polls, and a number of its candidates are “distancing themselves” from Trump, he noted. Polls indicated that Republicans could lose their slim majorities in the US Congress.

It’s not just the Iranians under severe economic pressure because of the US naval blockade and ongoing sanctions, “it’s also the Trump administration,” Elmasry said.

Trump’s wait for more Iranian concessions could ‘backfire’

Trump “wants Tehran to reopen Hormuz without Washington paying the full economic and political price Iran is currently demanding”, Krieg said.

“The danger is that he is confusing Iranian pain with Iranian willingness to capitulate. Those are not the same thing.”

Iran is undoubtedly under pressure. Krieg said the sanctions and blockade are “biting”, which is precisely why Tehran needs an agreement.

But additional pressure does not necessarily produce additional concessions.

Iran could instead increase the costs of the conflict for its adversaries, Krieg said, including through the Strait of Hormuz, regional infrastructure and potentially Bab al-Mandeb, another strait between Yemen and the Horn of Africa.

In recent weeks, the strategic weight of Bab al-Mandeb has increased dramatically after the Iran-aligned Houthis expanded their control of Yemen’s Red Sea coastline.

This advance in effect has handed the Houthis unrestricted access to the narrow waterway, a worrying development for global shipping given the group’s track record of targeting vessels, including Israeli-linked ships, in solidarity with Palestinians in Gaza.

The Houthis have already declared a naval blockade on Saudi ships in the Red Sea, which Riyadh began to use as an alternative shipping route to Hormuz for its oil exports.

“So this can backfire,” Krieg warned. “Trump thinks Iran’s clock is running faster than America’s. Tehran thinks the opposite: that Qatar, Saudi Arabia, the UAE, global energy markets and ultimately Trump himself have a lower tolerance for prolonged disruption than Iran has for economic punishment.”

Ross Harrison, a senior fellow at the Middle East Institute, similarly told Al Jazeera that Tehran may now be “less worried about overplaying their hand than they are underplaying their hand”.

According to Harrison, Tehran now sees the risk of escalation as less costly than agreeing to something prematurely or appearing willing to compromise, particularly after Washington’s response to the proposal.

In an interview with Al Jazeera that aired on Saturday, Iranian President Masoud Pezeshkian said his country no longer trusts negotiations with Washington after attacks occurred during previous rounds of talks and were followed by sanctions.

“We have no trust in the American side and do not know on what basis an understanding can be reached with it,” Pezeshkian said.

Tehran betting ‘heavily’ on time

US-based analyst Harrison noted that Tehran was probably “not surprised at all” by Trump’s rejection and viewed the offer partly as a way to demonstrate to Iranians and the American public that it remained willing to negotiate.

Experts said Tehran understands the US president wants an exit he can present as a victory.

“Iran is betting heavily on time. … Its strategy is to keep the pressure high enough that he eventually comes back to negotiations while making that exit progressively more expensive,” Krieg said.

“The Iranian calculation is essentially: Do not give Trump the deal cheaply when he may need it more badly several weeks or months from now.”

Harrison said the Iranian offer was a “show of goodwill” intended to demonstrate Iran’s willingness to negotiate to both its domestic audience and the American public.

According to Krieg, “protraction” of the conflict was the “most likely outcome”.

“Both sides need a deal, but both currently think waiting will improve the deal they eventually get,” he added.

Remnants claimed to be photographed in Iran have been identified as belonging to a Raytheon ADM-160 Miniature Air-Launched Decoy (MALD). The wreckage was reportedly recovered after an Iranian interception that occurred earlier in the day, although the exact location and circumstances remain unconfirmed and there is reason for caution. Iranian state and military media have a long record of presenting unverified or exaggerated claims, especially during periods of conflict, and imagery released through those channels warrants independent scrutiny. Still, the MALD identification appears credible based on the visible wreckage, but its provenance, location, and the circumstances of its loss have not yet been independently established. MALDs were likely used at least in the opening stages of Operation Epic Fury, as well.

With that being said, the showing off of the MALD wreckage, regardless of its original use case, is something of a reminder that U.S. and Israeli forces are continuing to evaluate Iran’s electronic order of battle, which can include probing activities that leverage deception and decoys to better understand the state of Iran’s air defenses and command and control architecture. This is critical information that needs to be constantly updated for contingency and future potential air campaign purposes.

Iranian sources today reported the destruction of an Orbiter-type reconnaissance drone over the Strait of Hormuz, before the separate imagery emerged showing what appears to be the wreckage of a MALD. It is not yet clear whether the two reports refer to the same incident or separate losses.

The appearance of the wreckage could also shed a light on how the U.S. and Israel can conduct ongoing air operations against Iran, even if kinetic actions have largely slowed to a trickle.

MALD is an expendable store, launched from another aircraft. The ADM-160 family was developed to provide a flexible way of decoying and distracting an enemy’s air defenses, while also adding to the survivability of allied aircraft and standoff weapons. Raytheon won the U.S. Air Force development contract for the current-generation ADM-160B in 2003. The B design is significantly different from the initial A-model from Teledyne Ryan (later Northrop Grumman), the development of which had started in the late 1990s. The B also features a more powerful turbojet engine and possesses greater range.

The ADM-160B is approximately 6.5 feet long, has a wingspan of roughly 5.6 feet when deployed, and is powered by a small turbojet. It has an operational range of around 550 miles.

Rather than carrying a conventional warhead, the MALD carries equipment intended to reproduce the radar signature of specific aircraft or standoff weapons. It can therefore provide additional and often highly enticing tracks for an adversary’s radar operators and surface-to-air missile crews to respond to. It can be programmed to fly intricate routes to better rival the target it is emulating and to provoke the attention of air defenders.

The related ADM-160C MALD-J adds an electronic warfare capability, allowing it to perform stand-in jamming and other forms of active electronic attacks against enemy air defense nodes. Further improved variants of the MALD, which the U.S. Navy has also been acquiring, have since been developed as you can read more about here.

The exact variant involved in today’s incident cannot be established from all publicly available imagery at this stage.

The possibility that the United States had used MALDs against Iran had already attracted considerable attention following Operation Midnight Hammer, the U.S. strike against Iranian nuclear facilities in June 2025.

During the operation, U.S. officials described a complex deception plan involving aircraft and other decoy measures designed to prevent Iran from determining the true direction and composition of the attack.

This strongly pointed to MALD as one likely component of that deception architecture.

The opening hours and days of Operation Epic Fury also likely saw MALD employments. ADM-160s have also been used extensively by Ukraine against Russia, primarily for provoking air defense systems into radiating and as penetration aids for cruise missiles.

MALD® Operational Scenario & Capabilities

In the Strait of Hormuz context, the MALD could serve a dual purpose. It could act in its primary role, as a defensive measure for allied aircraft and standoff weapons, drawing Iranian air defense systems away from it and toward the decoy. It can also be used more independently, triggering Iranian defenses and revealing their locations and operating characteristics, as well as the state of Iran’s command and control for those assets. Surveillance platforms, especially those in the air, can then soak up all that signals data. This can then be used to generate intelligence for future operations, and all without putting a person or an expensive piece of equipment at risk.

The unique nature of the current state of the Iran conflict would allow for MALD to be used in this unique manner. While kinetic actions have become sporadic, they are still occurring, so firing a decoy that looks like something much more threatening to Iranian air defenders would not be an unprecedented escalation.

Iran has characterized the incident as a shoot-down. If Iranian forces did successfully engage the MALD, that would represent a real air defense interception of a U.S. deception system, although these are expendable by design. It is equally possible that the MALD malfunctioned or just flew its route and ran out of fuel and crashed, as designed.

The wreckage also does not, by itself, identify the aircraft that launched the MALD.

The system has been integrated with a broad range of U.S. aircraft. In the course of U.S. operations against Iran, we have notably seen Air Force A-10C Thunderbolt II attack jets returning from theater with markings depicting MALD missions.

It is also worth noting that the MALD wreckage has appeared at the same time as reports of unusual, UAP-like objects over Iran, with videos and eyewitness accounts circulating online. Their authenticity and nature remain unclear.

A number of videos are circulating showing an unidentified object in the skies above Tehran, Iran, it’s not immediately clear what is being filmed. pic.twitter.com/bHNAQGFPNv

— OSINTdefender (@sentdefender) September 21, 2026

Such reports come amid an increasingly sophisticated use of low-end drones, decoys, and other forms of deception. These kinds of systems can be employed not only to stimulate adversary air defenses, but also to distract populations and probe how information moves out of a denied area. In such an environment, unusual aerial sightings should be viewed with caution — but not necessarily dismissed as irrelevant. We have been talking about how new forms of misdirection and guile will leverage relatively low-end technologies in future conflicts for many years now. While it isn’t clear if this light show in the sky over Iran was such an activity, it is certainly a reminder to keep that possibility in mind.

I don’t know what this is, or if it’s legit BUT remember we are in a new age of misdirection, decoy and guile. Specifically using low end drone technology. There are more ways to stimulate an enemy air defense system, distract a populous, assess the flow of public info from a… https://t.co/wW7YVlbayB

— Tyler Rogoway (@Aviation_Intel) September 21, 2026

Meanwhile, the prospect of renewed U.S. strikes is increasingly being raised on both sides. Iran’s central military command said Sunday that it had received information that Washington was preparing to resume attacks, while President Donald Trump told Fox News that he was in a “deciding mode” and was considering further military action alongside economic pressure and a deal.

Trump had also told Axios last week that he was approaching a major decision on whether to resume large-scale military operations, with U.S. forces in the region being maintained at current levels through the end of the year.

Iranian officials have warned that a renewed U.S. attack would trigger retaliation against American forces and interests across the region. At the same time, Qatar and Pakistan are pursuing diplomatic efforts to restart negotiations.

This situation is exactly why keeping as detailed intelligence on the status of Iran’s air defense overlay would be so critical. Building a highly detailed electronic order of battle and maintaining it is critical to the effectiveness of future air operations. There is usually an observable burst of such activity prior to a major operation kicking off, as well. There are also many unseen assets that help with this, from those in space to those in the air and even those under the sea. There have been reports of Israel’s secretive RA-01 stealth flying wing drone being spotted over Iran and of course the U.S. has its own RQ-170 and RQ-180 aircraft, just to name a couple known penetrating assets that are likely highly capable of collecting this information.

Regardless, the U.S. and Israel will have a lot of ‘maintenance’ to do in order to roll back any air defense capabilities Iran has been able to reconstitute should hostilities break out in full again, and a lot of critical intelligence data will need to be up-to-date in order to support such an operation.

Contact the author: thomas@thewarzone.com

United States President Donald Trump has rejected a roadmap submitted by Iran to open the Strait of Hormuz within a week.

“I reject their proposal,” Trump told reporters outside the White House on Saturday, before departing for Tennessee by helicopter.

Iranian Foreign Minister Abbas Araghchi said on Friday that Tehran formally submitted a seven-day roadmap to the US via mediator Qatar, and was awaiting Washington’s response.

“It appears as though the proposal is dead in the water,” said Al Jazeera’s Mike Hanna, reporting from Washington, DC.

Late on Friday, US media reports indicated Trump would reject the proposal.

Trump was “privately sceptical” that Tehran would meet his demands, and reportedly told aides that he expects a renewed bombing campaign on Iran after the November US midterm elections, The Wall Street Journal reported, quoting unnamed US officials.

“President Trump has vacillated between extreme optimism, saying that ‘talks are going well’ to ‘I want to annihilate Iran’,” Hanna said about the recent diplomacy between Washington and Tehran.

“There is no consistency in terms of the [Trump] administration’s reaction,” he said.

But “the one thing that has been made clear by President Trump is that he is content to stay in the status of limbo”, Hanna added, despite concerns from much of the American public that the Iran conflict is turning into another “never-ending war”.

The Strait of Hormuz, a waterway key to the world’s oil supply, is central to the conflict between the US and Iran, which is at an impasse after nearly seven months, though new mediation efforts took place this week.

Earlier in the week, Araghchi held talks with Trump’s envoy Steve Witkoff, and previously set out conditions for ending the war and reopening the vital shipping channel.

On Friday, the top Iranian diplomat said: “Iran has conveyed to the United States, through Qatar, a concrete seven-day plan. If the necessary conditions are met, the strait can be reopened, and normal maritime passage restored within seven days.”

He was speaking at the United Nations in New York, where he and other senior Iranian officials were attending the General Assembly.

Under the plan, Washington would lift its naval blockade of Iranian ports, waive sanctions on Iranian oil sales, release an estimated $12bn in frozen Iranian assets and observe a ceasefire covering the region, including Lebanon and Yemen.

“The choice now rests with the United States. Iran does not accept coercion, threats or intimidation, and Iran will not surrender its sovereign rights under pressure,” Araghchi had said.

On Saturday, Iranian President Masoud Pezeshkian told Al Jazeera that Tehran no longer trusts negotiations with the US after previous rounds of talks were followed by attacks and sanctions.

“We have no trust in the American side and do not know on what basis an understanding can be reached with it,” said Pezeshkian, who was also in New York for the UNGA.

He denied that Iran was responsible for blocking the Strait of Hormuz, saying the US “closed the routes before us”. He described the closure as “a natural response when routes are cut off to Iran”.

The Iranian president said the crisis could be resolved through negotiations rather than force, and that the waterway would reopen to commercial shipping if talks ended the war.

Iran says it has put forward a plan to the United States to reopen the Strait of Hormuz within seven days, as Qatar passes messages between the two countries at the United Nations General Assembly in New York.

Speaking on the sidelines on Thursday, Iran’s Foreign Minister Abbas Araghchi said the timetable could begin as soon as Washington accepted the proposal.

Both sides have described the indirect contact facilitated by Qatar in New York positively, but neither has indicated any diplomatic breakthrough as the war approaches its seven-month mark.

Analysts have told Al Jazeera a firm peace deal remains unlikely, with Iran still wanting to follow the approach set out in an earlier agreement, which would give it and Oman a main role in managing the strait before moving on to discussing terms for a broader peace deal.

For its part, the US, which has claimed to be “in total control” of the Strait of Hormuz, wants Iran’s nuclear programme to be the subject of discussions straight away.

Iran has previously made clear that it will not engage with broader peace talks, including addressing the issue of its nuclear programme, until the US naval blockade of its ports in and around the Hormuz strait is lifted, sanctions are repealed and the US provides a guarantee of an end to strikes, among other conditions.

Here’s what we know.

What has Iran proposed?

Araghchi told reporters in New York that Iran had presented its plan to the US through intermediaries. “If certain conditions are met, the Strait of Hormuz would be open on the end of the seventh day and [peace] talks would restart,” he said.

He did not give details but said the proposal resembles the June 17 memorandum of understanding (MoU) signed by Iran and the US, which briefly eased the conflict before breaking down. “The moment they accept this plan, from the next day, this timetable can start, and after seven days, the strait will be open,” he said.

Under the June agreement, Iran undertook to allow ships to pass through the strait without paying tolls for 60 days – that was the period of time given for peace talks to take place. But the MoU left open what would happen after that period.

Araghchi did not say whether the same arrangement formed part of his new proposal. Nor did he spell out what Washington would have to do before the seven-day timetable began, how either side would verify those steps, or what rules would govern shipping once the strait reopened.

It is highly unlikely Iran would be offering to cede control of the Strait of Hormuz, analysts say.

Urban Coningham, a research fellow at the Royal United Services Institute, told Al Jazeera that Tehran is unlikely to receive the sanction relief it has previously demanded and, therefore, sees the strait as its primary ticket to helping it recover from the war economically.

“Hormuz is a clear Iranian red line,” he told Al Jazeera. “The Iranians will not get reparations for the war, so control of the strait is the only way they can recover economically. I cannot see them backing down from that.”

Why does the June agreement matter?

The MoU signed in June set out an immediate halt to military operations on all fronts, including in Lebanon, where Israel has launched strikes and occupied part of the country, and triggered a 60-day period for negotiations on a lasting peace settlement. It included US waivers for Iranian oil exports and provisions to restore maritime traffic through the strait.

It deferred other issues, including the future of Iran’s enriched uranium stockpile, to broader peace talks.

But the agreement unravelled the following month amid renewed confrontation over shipping routes through the strait.

Coningham told Al Jazeera that Iran’s latest proposal follows this earlier model: “Open the strait within seven days, then start talks on the nuclear file.”

But “the US does not want to compartmentalise the issues, it wants them discussed as one package”, he said.

How else does this new proposal place pressure on the US?

Coningham also sees a political calculation in making the offer publicly at the UN as Americans contend with high fuel prices. “By explicitly saying this may be the only chance before the midterms, Iran is putting pressure on Trump over oil and gas prices and the strait,” he said. “It is a tactic to put more pressure on the US.”

The strait, which runs between Iran and Oman, is a vital route for oil and gas exports from the Gulf. Disruption to shipping has driven up energy prices far beyond the region, giving both governments an economic reason to reach an agreement despite their differences.

With the US midterm elections approaching, a deal to get it reopened could give Trump a chance to bring down fuel prices before voters go to the polls – potentially giving the Republican Party a much-needed electoral boost before the midterms.

Trump has presented the electoral calculation differently, however. In his address to the General Assembly on Tuesday, he accused Iran of waiting to see how his Republican Party performs in November and predicted a deal would happen after the vote. He also threatened to “annihilate the Islamic Republic” if there was no agreement.

Trump claimed the election did not affect his own decision-making on Iran: “The only thing that does is that Iran will never have a nuclear weapon.”

That leaves an open question about whether the prospect of lower energy prices is enough to persuade his administration to accept Iran’s proposed order of talks. Coningham doubts it. “Trump is prepared for this to go on through the midterms,” he said. “The same problem remains where the proposal does not answer questions about the nuclear file.”

Where do broader US-Iran peace talks stand?

Araghchi met US envoy Steve Witkoff and Trump’s son-in-law Jared Kushner on Tuesday in talks mediated by Qatar. The Iranian foreign minister described the exchange as productive and said messages continued to pass between the sides.

US Secretary of State Marco Rubio said it would be wrong to describe the meeting as a major breakthrough, however.

Burcu Ozcelik, a senior research fellow for Middle East security, told Al Jazeera that the major blockage for Washington and Tehran is that each is making different assumptions about how much pressure they can exert on the other. The Trump administration is unlikely to revive the failed MoU, she said, because it assesses its naval blockade and tighter sanctions as working.

“The US appears to believe it can wait this out until Tehran is prepared to make meaningful concessions,” Ozcelik said.

“But Iran remains defiant despite indications that it is hurting economically.”

Flights operated by Iranian airlines to and from the UAE suspended as part of broader efforts to enforce US aviation sanctions on Iran.

The United Arab Emirates has halted flights operated by Iranian airlines, joining several other countries in adopting United States sanctions aimed at pressuring Tehran’s aviation sector.

On Thursday, a statement carried by the Emirati WAM news agency said, “The General Civil Aviation Authority announced the suspension of all flights operated by Iranian airlines to and from the UAE.”

It said the decision was “based on the US sanctions imposed on Iranian airlines preventing them from using airports around the world”.

The UAE has joined Oman, Iraq, Azerbaijan, Georgia and Turkmenistan in restricting or suspending access for Iranian airlines amid the new US sanctions threat.

Dubai, the UAE’s commercial hub, is a major destination for Iranian carriers, with multiple daily flights, a large Iranian community and close business links.

An Iran Airtour flight from Tehran to Dubai was cancelled shortly before its scheduled departure on Thursday morning, after tickets had already been issued, according to the AFP news agency.

The UAE, which was repeatedly hit by Iranian missiles and drones throughout the US-Israel war on Iran, suspended trade and financial exchanges with Iran last month.

On Wednesday, the UAE’s central bank blocked transactions involving Iran’s Bank Melli, claiming the financial institution had violated rules on money laundering, terrorism and arms proliferation.

The US Treasury announced sweeping sanctions on Iran’s aviation sector earlier this month, targeting 27 airlines and dozens of companies that support them. The measures aim to cut off Iran’s air links entirely, warning that any airport or company still servicing Iranian carriers risks being cut off from the US dollar system.

Iran’s Civil Aviation Organization spokesman Majid Akhavan said: “Diplomatic and aviation talks are under way to remove the restrictions and restore flights” to the UAE.

Akhavan added that Turkmenistan also turned back a flight from Tehran to Dushanbe on Thursday.

“Turkmenistan’s refusal to allow the Iranian aircraft to pass through its airspace meant the flight could not continue on its route and had to return,” Akhavan told the Iranian IRNA news agency.

Several smaller Iranian airlines continue flying to China and Armenia, both of which have resisted US pressure, while routes to Turkiye remain open for some carriers.

In a defiant speech at the United Nations General Assembly, Iran’s President Masoud Pezeshkian has delivered a sharp rebuke to a threat by US President Donald Trump from the same rostrum the previous day to annihilate the country, but left the door open for diplomacy to end nearly seven months of war.

“The US president called us terrorists but we are the victims of terrorists,” Pezeshkian said on Wednesday.

During his speech, Pezeshkian held up a picture of former Supreme Leader Ayatollah Ali Khamenei – assassinated in a joint US-Israeli strike at the start of the war in February – as well as photos of schoolgirls killed in an alleged US air attack on their school in the southern city of Minab.

“They hit us, but we did not bow our heads or bend the knee,” Pezeshkian added.

As the Iranian president began his speech, an official from the US delegation walked out of the vast hall. The Israeli delegation also boycotted the address.

“[Trump] must know that the resistance of the Iranian people will only grow in the face of sanctions and increased pressure and bullying,” Pezeshkian said.

But Pezeshkian, a relative centrist in the Iranian ruling system, also left the door open for negotiations, saying, “Iran extends its hands towards the world.”

“We invite the world and call to it, not out of weakness, but out of a deep belief in our own power and steadfastness to cooperate and collaborate out of a deep understanding that no one in this region will have security alone,” he said.

‘Very good meeting’

On Tuesday, Trump said his son-in-law Jared Kushner and Steve Witkoff, who are both leading negotiations with Tehran, had held a three-hour meeting with Iranian officials.

“They had a very good meeting, a very productive meeting,” Trump told reporters at the UN, adding that he believed there was “a lot of momentum” towards an agreement. Trump later said talks were continuing and that he believed a settlement would eventually be reached.

The remarks came after Trump used his speech before UN delegates to again threaten Iran’s destruction.

“Will a deal be made with Iran that lets them rebuild and create a far greater country than it ever was before?” Trump said. “Or do I annihilate the Islamic Republic and do it quickly, never giving them a chance to kill and destroy people and countries again?”

Strait of Hormuz

Addressing the US naval blockade of Iran and Tehran’s campaign to choke off trade in the Strait of Hormuz, Pezeshkian said Iran would resist what he called US efforts to use the critical sea lane to expand its war on the country.

“In the Strait of Hormuz, we cannot have some free access and gain their independence from that waterway while at the same time use that waterway to impose their aggressions upon us and to impose insecurity upon us; to forbid us access to our own waterways,” he said.

Negar Mortazavi, a senior fellow at the US-based Center for International Policy, said the Iranian president’s speech showed usual flashes of defiance, but notably signalled an appetite for a diplomatic off-ramp.

“Iran wants a way out of this war. They’ve kept the door to diplomacy open,” she told Al Jazeera.

“Reading between the lines of the Iranian president’s speech, it seems Iran may even show some flexibility as far as a return to some sort of agreement that may not be exactly along the lines of the June Memorandum of Understanding that US President Trump doesn’t seem interested in returning to,” she said. The memorandum, which has expired, called for a halt to fighting, lifting the US naval blockade and opening the Strait of Hormuz to maritime traffic.

Compromise still a possibility

Drawing parallels between the US and Israel bombing of Iran and Israel’s attacks in Gaza, Pezeskhian said Israel’s genocide in Gaza “revealed the double standards to which Iran is held by the international community”.

“They kill and we are sanctioned and we are punished,” Pezeshkian added.

Joey Hood, a former US diplomat and ambassador to Tunisia, said the speech leaned heavily into familiar Iranian official rhetoric and represented a lost opportunity to seek compromise.

“Instead of coming to the United Nations with something new and bold, we heard the same things that we’ve heard before,” Hood said, adding that a concrete peace offer or proposal posed to the US in the speech might have focused Washington’s attention.

“That would actually put Donald Trump on the backfoot, and he would have to respond. The Iranian president didn’t do any of that,” Hood said.

Amid the US-Israel war on Iran, the country’s economy has suffered a sharp contraction, with its crucial oil and gas sector taking the biggest hit as the United States tightens its economic and military pressure on Tehran.

Data released by the government-administered Statistical Center of Iran showed gross domestic product (GDP) shrank by 10.1 percent year-on-year between March 21 and June 20, the first quarter of the Persian calendar.

The period covers the opening months of the US-Israel war on Iran, which began on February 28.

The economic downturn has come as Iran struggles to export its oil, one of its most important sources of foreign currency, while also contending with high inflation, a weakening rial, and disruptions to trade and industry.

Here is what you need to know:

What does the economic data say?

The headline GDP number masks an even steeper decline in Iran’s energy industry. Crude oil and natural gas activity contracted by 26.4 percent compared with the same period a year earlier. GDP excluding oil, by comparison, fell by 4.6 percent.

The damage has spread beyond the energy sector. Industry and mining contracted by 14.7 percent, services declined by 4.8 percent, and manufacturing contracted by 2.5 percent. Agriculture was the exception, growing at 2.3 percent.

Those figures come amid an already difficult economic situation in the country. Earlier this month, Iran’s 12-month average inflation reached 69.9 percent, while food, beverage, and tobacco prices rose at nearly twice that rate. Official unemployment climbed to 9.1 percent in the spring.

The rial, meanwhile, fell from about one million to the US dollar a year earlier to more than 2.2 million in early September.

What is the latest with Iran’s oil exports?

Iran’s ability to sell crude has been dramatically curtailed by the US naval blockade, imposed for most of the war.

Iranian crude and condensate loadings collapsed from about two million barrels per day in March to roughly 740,000bpd in July and just 220,000-255,000bpd in August, according to estimates from Kpler and Vortexa.

TankerTrackers.com told the Reuters news agency that 29 tankers, carrying 36.11 million barrels of crude, were trapped in the Strait of Hormuz. Meanwhile, Vortexa estimated total Iranian crude afloat had fallen from 135 million barrels at the end of July to 107 million barrels by late August.

Is Trump winning the economic war on Iran?

By several economic measures, Washington’s pressure campaign is inflicting damage on Iran’s economy.

On September 6, total trade had fallen by 25 to 35 percent, President Masoud Pezeshkian said, with imports hit harder than exports. The US blockade of the Strait of Hormuz has made it hard for ships carrying imports to reach Iranian ports.

Tehran has also explicitly linked the end of the war to economic relief. Iran’s security chief Mohsen Rezaei told Al Jazeera on Saturday that its conditions include “the release of our frozen funds and an end to the naval blockade”.

In addition to the naval blockade, US Treasury Secretary Scott Bessent last month announced an economic pressure campaign against Iran, pledging to target its financial interests across the world. He said the US would target all of Iran’s sources of revenue, including oil, to prevent other countries and companies from doing business with Tehran.

The US-Israeli attacks and Iran’s retaliations have disrupted Tehran’s trade with one of its main economic partners, the United Arab Emirates.

The UAE last month announced an indefinite trade embargo on Iran after accusing its forces of carrying out several ballistic missile attacks, which Tehran denied, calling it a “false flag operation” by Israel and the US.

Chris Beauchamp, market analyst at IG Group, said, “Most wars are contests of stamina more than anything else.”

“The 10 percent drop in Iranian GDP is a sign that the US is succeeding in putting pressure on its foe. But the question rests, as it has done since March, on whether Iran can weather the fall in economic activity better than the US can stand the surge in energy costs,” he told Al Jazeera.

“For a regime prepared to do anything to stay in power, this news will make little difference, so long as the security forces remain loyal,” he added.

What is the latest with diplomatic efforts to end the war?

While Iran has taken a defiant stance against US economic and military pressure, it has indicated repeatedly that it remains open to diplomatic means to end the nearly seven-month-old war.

On Saturday, Rezaei told Al Jazeera that Iran conveyed a formal set of conditions to Washington through Qatari mediators for ending the war.

Iranian state media outlet IRNA reported on Monday that Pakistani Interior Minister Mohsin Naqvi was set to visit Tehran, without specifying the agenda or other details.

Mediators Qatar and Pakistan have been working to re-establish negotiations between the two sides since their memorandum of understanding (MoU) expired last month.

Meanwhile, Iranian Foreign Minister Abbas Araghchi will stop briefly in Qatar before going to New York for the UN General Assembly, IRNA reported.

Iran has repeatedly said it remains ready for any new strikes by Washington.

Rezaei said on Saturday Tehran did not rule out a new US strike against Iran, calling the possibility “very much on the cards” based on his country’s military assessments.

Mark Pfeifle, a Republican strategist and former White House and national security official, said Iran and the US are still willing to strike a deal.

“Sometimes in diplomacy it’s what’s taken off the table,” he told Al Jazeera.

Pfeifle said when Rezaei reiterated his demands for talks with the US, he spoke of “ending the blockade, releasing the frozen funds [and] stopping the attacks”.

“But he left off reparations and reconstruction money, which tells me that there’s a concrete sign that amongst all the rhetoric, which is still very strident, that the pressure campaign that the US is putting on Iran is having some effect,” he said.

“And it tells me that both sides are still looking for room to negotiate in the coming weeks.”

Tehran threatens retaliation as Trump weighs military action while Qatar pushes to revive talks.

Iran’s central military command says it has received information that the United States is preparing to resume strikes on the country.

The warning, issued on Sunday by the Khatam al-Anbiya Central Headquarters, which oversees Iran’s armed forces, raises the prospect of a new round of fighting after months of reduced direct attacks.

Tehran said any renewed US assault would bring retaliation against American bases and interests in the Middle East and warned regional countries against helping Washington.

The military command said states that allowed their territory or facilities to support US attacks would be “considered complicit” and could face an Iranian response.

US President Donald Trump told Fox News on Sunday that he was in a “deciding mode” over Iran and said his options included further military action, economic pressure or a deal.

He also said he would be open to meeting Iranian President Masoud Pezeshkian on the sidelines of the United Nations General Assembly in New York this week.

Iran’s Foreign Minister Abbas Araghchi left Tehran on Sunday evening for the UN General Assembly in New York, state media announced, adding that he is making a brief stopover in Qatar.

Parliament Speaker Mohammad Bagher Ghalibaf told lawmakers on Sunday that Tehran should use military force to push back its opponents before turning to diplomacy to secure any gains.

Tehran has told Qatari and Pakistani mediators that conditions for renewed talks include an end to the war and US attacks, the release of frozen Iranian funds and the lifting of the US naval blockade on Iranian ports.

Ghalibaf said the Strait of Hormuz would remain closed until Washington met what Iran says are its commitments under an earlier agreement.

Al Jazeera correspondent Tohid Asadi, reporting from Tehran, said Iranian officials were sending a deliberate two-track message, signalling that they remained open to diplomacy while preparing for renewed fighting.

Qatar, a Gulf state mediating between the two sides, says its officials are travelling between capitals and exchanging proposals aimed at restarting negotiations.

Qatari Foreign Ministry spokesperson Majed al-Ansari said Doha had heard assurances from US officials that Washington wanted an agreement.

The confrontation is already disrupting the Strait of Hormuz, a narrow waterway linking the Gulf to the Arabian Sea and a key route for global energy shipments.

Shipping data showed 12 commodity vessels crossed the strait over the weekend, down from 35 the previous weekend. The war began in late February after joint US-Israeli strikes on Iran.

A 60-day memorandum reached in June reduced full-scale fighting but expired last month, with attacks around Hormuz increasing since then.

Mark Pfeifle, a Republican strategist and former White House national security official, told Al Jazeera that both countries were “locked in this frozen conflict” and trying to increase pressure before possible diplomacy around the UN gathering.

Iran’s security chief Mohsen Rezaei has laid out Tehran’s latest set of conditions to end its war with the United States.

In an exclusive interview with Al Jazeera on Saturday, Rezaei said that Tehran has conveyed its conditions to the US via Qatari mediators, but added that Tehran was more battle-hardened now than in the first 40 days of the war, which began in late February following joint US-Israeli strikes on Iran.

“We will confront America with greater force, and with more numerous and more painful strikes,” said Rezaei.

While full-scale fighting has been paused for months, the two sides are nowhere close to peace. A June 17 memorandum of understanding (MoU) between the US and Iran expired last month. Since then, attacks have risen, especially in and around the Strait of Hormuz, which Iran has effectively closed, while the US maintains a blockade of Iran’s southern ports.

The escalating attacks on oil tankers attempting to pass through the strait and the effective Houthi control of the Red Sea route, which Saudi Arabia used to export oil, have caused oil prices to cross the $100 mark in recent weeks.

Al Jazeera’s Tohid Asadi, reporting from Tehran, described Rezaei’s remarks as part of the “two-sided, twofold message” Iran has maintained throughout the conflict – combining openness to diplomacy with continued preparations for war”.

So what are Iran’s latest conditions, and do they differ from the June MoU?

What are the Iranian conditions to end the war?

Here is what Rezaei told Al Jazeera:

• An end to the war on all fronts, including, in particular, Lebanon.
• The release of its frozen funds that run into billions of US dollars.
• An end to the naval blockade on Iranian ports.
• An end to US interference in Iran’s internal affairs.
• An end to US cooperation with “the opponents of our revolution”.
• An end to all US attacks on Iranian territory.

“It is in Washington’s interest to accept these conditions. Trump’s threats will not achieve any results. We are prepared for a decisive war,” said the security chief.

On Sunday morning, Iran’s Parliament Speaker Mohammad Bagher Ghalibaf reiterated Tehran’s stance on the Strait of Hormuz, saying the critical waterway will remain closed until the US fulfils its commitments.

“Until these conditions are met, the legitimate rights of the Iranian nation are recognised, and American commitments are fulfilled, there will be no opening for a return to the previous state of negotiations or for the reopening of the Strait of Hormuz,” said Ghalibaf.

What is different to the June MoU?

Iran’s latest set of conditions bears similarities to its demands under the MoU deal signed in June. That agreement also included an end to the war on all fronts, including in Lebanon; respect for each side’s sovereignty and not meddling in internal affairs; an end to the naval blockade by both sides; and the release of Iran’s frozen funds.

The MoU also called for a $300bn US-backed reconstruction plan, while the two sides also agreed that Iran would not procure or develop nuclear weapons and that Tehran would open the Strait of Hormuz for the safe passage of vessels.

It also required the US to issue waivers for the export of Iranian crude oil and other services, no new sanctions on Iran, and no deployment of additional US forces in the region.

In the interview, Rezaei did not mention war reparations from the US as Tehran has been demanding previously.

While there is little genuinely new in the substance of Iranian demands, what has changed is the timing and the channel through which it was delivered, said Adel Abdel Ghafar, a senior fellow focusing on the Middle East at the Australian Strategic Policy Institute.

“With the Islamabad MoU dead and … Rezaei delivering the conditions through Qatar, Iran is putting the onus back on Washington and doing it publicly, for maximum effect,” Abdel Ghafar told Al Jazeera.

Both sides are in a stalemate, he explained, with the US able to sustain the naval blockade and hold air superiority but unable to compel capitulation from Iran.

Iran, meanwhile, cannot break the blockade but “keeps enough asymmetric leverage to make things difficult for everyone”, he said.

“Basically Iran is betting [on the] war’s unpopularity and [that the] US midterms [will] shift things in its favour, so it’s going public with demands and putting the ball in Trump’s court.”

Rezaei, in his interview with Al Jazeera, rejected the US accusation that Tehran violated the MoU by striking an oil tanker in the Strait of Hormuz, stating that Iran’s actions came only after US attacks on Bandar Abbas and an Iranian surveillance platform there.

He said any agreement, including the MoU, required recourse to a dispute-resolution committee agreed between Ghalibaf, Iran’s chief negotiator, and US Vice President JD Vance, which Washington unilaterally withdrew from.

What did Rezaei say on Iran’s nuclear progamme, Yemen and others?

On the nuclear programme, Rezaei said Iran could have withdrawn from the Nuclear Non-Proliferation Treaty following attacks by the US and Israel – something that Tehran would not rule out in the future.

“We were indeed threatened, but we have not withdrawn from the treaty to this day,” he said.

For now, however, the country continues to abide by a fatwa (decree) from the former Supreme Leader Ayatollah Ali Khamenei prohibiting nuclear weapons, said the security chief.

“But we do not know what will happen in the future,” he said, citing further sanctions or a UN Security Council referral of Iran’s nuclear file as potential future pressure.

On the intensifying war in Yemen, Rezaei denied any Iranian involvement, adding that it could offer mediation between the warring sides. He also said Tehran was not exploiting the conflict “for its own political ends”.

“We are fully prepared to help achieve peace between Yemen and Saudi Arabia,” said Rezaei.

The security chief also dismissed speculation, including inside Iran, that it could close the Bab al-Mandeb Strait to pressure global energy markets, stating the waterway “is a Yemeni matter” relating to the Houthi movement, not Iran.

On the Strait of Hormuz, Rezaei said Tehran came within “a short step” of announcing a deal with Oman to manage it, but it may require regional endorsement before being made public.

What has been the US response?

The US has not yet responded to Iran’s new conditions. Rezaei said Iran is “waiting for the Americans to accept and implement” them.

The US did, however, on Saturday warn its citizens in Iraq, Bahrain, Oman, Saudi Arabia, Iran, Qatar, Lebanon, Kuwait and Jordan to exercise “heightened vigilance”, stating that “the security environment remains complex with the potential for unforeseen escalation”.

US President Donald Trump also cut his weekend short from his trip to Camp David, returning to Washington, DC on Saturday from the secluded presidential complex in rural Maryland, the White House said. No explanation was given for the early return, which comes as fighting between Saudi Arabia and the Houthis has escalated.

According to Rob Geist Pinfold, a lecturer at King’s College London, Trump may take Iran’s memo seriously – in an effort to end the war before the US midterm elections in November.

“Trump very much wants a deal to wind up the war before the midterms,” Pinfold told Al Jazeera.

“The US’s Gulf allies will also likely push for a renewal of talks. But it doesn’t mean there still aren’t significant substantive gaps between the parties, which make a comprehensive deal unlikely anytime soon.”

David Des Roches, a former Pentagon director of Arabian Peninsula affairs, however, told Al Jazeera that Washington was unlikely to see Iran’s terms as a serious opening.

“At first glance, probably not serious; they would be viewed as surrender,” Des Roches said.

But he pointed to Iran’s apparent abandonment of war reparations as a sign of movement.

Tehran, Iran – Hossein, a 32-year-old marketing specialist based in Tehran, has been thinking of replacing his 13-year-old Iranian-made car with a newer model.

Even though he earns about four-and-a-half times the minimum wage after a recent pay rise – his salary is now close to 900 million rials (about $390 at the current exchange rate) – imported vehicles are not even remotely affordable for him.

Even finding a locally made car might be out of his budget, with an economic crisis gripping the country since the United States and Israel launched a surprise war on Iran on February 28 and later enacted a crippling siege and sanctions on the country.

“I’m losing hope of ever being able to buy a new domestic production car too, unless the country opens up and becomes a bit more normal again,” Hossein, who asked to keep his full name confidential for security reasons, told Al Jazeera.

His old manual Peugeot 206 model, an originally French-made car but now produced domestically after foreign counterparts left Iran due to sanctions, can fetch up to 10 billion rials ($4,350) if he sells it towards making a new purchase. However, his replacement options are limited.

Upgrading to a slightly improved Peugeot 207 with an automatic gearbox could cost him 28 billion rials ($12,170) now. This means that, after selling his car, he would need more than 20 months of his entire salary.

A domestic sedan Shahin model costs more than 31 billion rials ($13,480), and a crossover Reera is priced at more than 43 billion rials ($18,700).

With these options, he would need to save about 24 months and 37 months of his whole salary, respectively, and that is if prices remain stable and he does not spend a rial on anything else. But the reality of the fast-rising living costs and lagging incomes in Iran means he can barely put aside any money, let alone afford a new car.

Domestic car prices have mostly risen 40 to 80 percent since the start of the war, while some vehicles sell for more than 130 percent of their September 2025 costs.

The costs of maintaining the vehicles are also rising much faster than people’s salaries. Domestically produced tyres, motor oil, brake pads and clutch kits have at least doubled since last year, with some car parts having more than tripled in price.

Domestic vehicles have generally low safety standards, meaning that they contribute to staggering road accident deaths. At least 1,609 Iranians have been killed so far on intercity roads in the current month of Shahrivar of the solar Hijri calendar, which ends on September 22. More than 20,000 people lose their lives on the roads every year. In comparison, fewer people in the whole of the European Union, nearly five times Iran’s population, died on roads last year.

Iran’s fuel-guzzling cars also contribute to smoke-congested city streets, degrade vehicles faster and increase fuel costs, just as petrol prices have risen for users.

How did we get here?

Experts say, due to a combination of protected state-linked businesses, privileged access, economic isolation and a curtailing of imports, Iranian households have no choice but to pay exorbitant prices – compared with their salaries – to buy low-quality cars.

The damage from the war, including the extensive bombing of multiple steel giants by Israel and the US, has only added insult to injury. The naval blockade of Iran’s southern ports has prevented goods coming in from popular neighbouring markets like the United Arab Emirates.

Under such circumstances, domestic vehicle manufacturers have little incentive to improve.

End customers are also beset by government charges, currency and financing costs, margins levied by murky intermediaries – and in numerous documented cases, industry corruption.

“People are forced to buy expensive low-quality cars whose real prices should be a quarter of global prices, and this is a direct harm done to them,” Mohammad Rashidi, a member of the presiding board of Iran’s parliament, told local media on Saturday. “The traces of a mafia system are visible throughout the process.”

His claims echo those of other officials and state-linked media, who have openly described the industry as resembling an organised crime operation.

According to the latest figures released by state media, about 233,000 cars were manufactured or assembled in Iran in the first five months of 2026, compared with 366,000 the year before. Only about 25,000 vehicles were imported in that period.

Only a handful of state-linked companies or intermediaries are allowed to import vehicles, with duties plus value-added tax increasing final prices up to 200 percent.

The government and parliament have discussed lowering import tariffs this year, with no agreement announced so far.

The premiums are more visible for high-end cars, with a 2026 Toyota Land Cruiser VXR going for approximately 660 billion rials ($287,000) in Iran at the moment, while the same model is available for about $86,000 in the UAE. The same story applies to most other models, at different rates depending on the rarity of the vehicle and the availability of parts.

The price of a mid-range Chinese-designed SUV sold as Exeed VX in international markets is listed at about $32,000 in China, while it is priced at about $42,000 in the UAE. The same car, assembled from imported parts by a state-linked company in Iran under a different name, currently costs Iranian customers the equivalent of $53,000.

The bizarre situation was on full display during a three-day “international” car exhibition in Tehran last week that mostly featured Chinese-manufactured vehicles. These remain available in Iran despite the US sanctions, since Tehran exports almost all of its oil to China and barters this for goods, including cars.

Some domestic manufacturers and importers were absent, either because they had no products to offer or because they had angry customers who registered months ago to get vehicles they never received. Spare parts for some of the vehicles on display are currently either not available in the Iranian market or cost several times their price in international markets.

Even the cheapest vehicles offered at the exhibition were completely unaffordable to the average Iranian. It would take a worker on the minimum wage with standard allowances 50 years to buy an XPENG G9, a Chinese-made electric SUV priced at 120 billion rials ($52,150), on his or her salary, without spending a rial on food, housing or clothing.

Still, there were huge queues outside the exhibition centre each of the three days.

“It was sad because most people just came to take pictures with the cars they knew they could never afford,” a young man who attended the exhibition told Al Jazeera. “The doors of the cars were locked too.”

The Iranian lender has faced years of Western sanctions over alleged ties to Tehran’s nuclear programme.

Turkiye’s banking watchdog has revoked the operating licence of Iranian lender Bank Mellat’s branch in the Turkish city of Istanbul.

“It has been decided to revoke the operating licence of Bank Mellat, Head Office in Tehran, Istanbul Turkey Central Branch,” read the decision by the Banking Regulation and Supervision Agency (BDDK), published in the Official Gazette on Saturday.

The regulator said the decision was taken under a clause of Turkiye’s banking law allowing a bank’s licence to be revoked or withdrawn if its continued operation is deemed to pose a risk to depositors’ rights or to the security and stability of the financial system.

Bank Mellat has been subject to Western sanctions for years over accusations that Tehran was pursuing a nuclear weapon under the cover of a civil nuclear programme.

Those sanctions were lifted as part of a landmark 2015 deal between Tehran and world powers to curb Iran’s nuclear ambitions. However, the United States unilaterally pulled out of the agreement in May 2018, reimposing economic sanctions on the country.

Bank Mellat was hit by further US and Gulf sanctions in 2019 after being named as one of 25 entities linked to Iran’s Islamic Revolutionary Guard Corps (IRGC).

The Turkish notice did not cite the US measures or specify operational issues.

Earlier this month, the US Treasury Department imposed sanctions on a small Turkish investment bank and two subsidiaries over alleged ties to Iran.

The Treasury Department accused Golden Global Yatirim Bankasi Anonim Sirketi (Golden Global Bank) of facilitating “tens of millions of dollars’ worth of transactions for the Islamic Revolutionary Guard Corps-Qods Force” and providing the Iranian government with banking access to move its funds internationally.

Golden Global Bank has denied the accusations.

Beijing: China’s Foreign Minister Wang Yi said Beijing was willing to “safeguard” Iran’s rights during talks with his counterpart Abbas Araghchi on Wednesday, as Beijing seeks to mediate in Tehran’s war with the United States.

China is “willing to strengthen dialogue and cooperation with Iran, and safeguard Iran’s legitimate rights and interests”, Wang told Araghchi as they met in the Chinese capital.

“We encourage Iran and the US to stay rational and restrained,” he added.

The talks come one week before an expected trip by Chinese President Xi Jinping to Washington, where he will meet US President Donald Trump.

China, a top economic partner of Iran, has long sought a detente in the months-long conflict in the Middle East, which has at times spilled over into neighbouring countries.

“We do not wish to see regional tensions spilling over into Yemen and the Red Sea,” Wang said.

Recent fighting that flared up in Yemen between government forces and the Iran-backed Houthis has displaced more than 100,000 people inside the country while thousands have fled abroad, according to the United Nations.

The war in Iran will be a closely watched topic at Xi’s meeting with Trump, among other thorny issues ranging from trade to competition over artificial intelligence.

Beijing refuted this week US media reports that Chinese entities supplied Tehran with satellite images of a military base housing US troops in Jordan, before and after an Iranian strike killed three American soldiers.

Trump has warned Beijing not to sell weapons to Iran, and Washington sanctioned three China-based satellite companies in May for enabling Iran’s military operations.

Work at a specialized underground weapons test site in New Mexico, contracted earlier this year, was linked to planning for a potential new operation targeting Iranian nuclear facilities, according to a report from CNN. The U.S. military has notably left Iran’s hardest-to-reach site under Pickaxe Mountain untouched so far, but President Donald Trump and other U.S. officials have been openly talking about striking it.

On February 27, the day before U.S. and Israeli forces launched their initial wave of strikes on Iran, the Pentagon’s Defense Threat Reduction Agency (DTRA) quietly announced it had awarded a sole-source deal to Pate Construction Co., Inc., for new construction at the so-called Alternate Seismic Hardrock in Situ Test (ALT-SHIST) site. The work was needed to support an upcoming classified live-fire test. ALT-SHIST is situated within the White Sands Missile Range (WSMR), a sprawling U.S. Army-managed complex in New Mexico’s Jornada del Muerto desert basin. DTRA is a relatively small and obscure organization that plays a leading role in U.S. military efforts to develop new and improved ways to respond to Weapons of Mass Destruction (WMD) threats.

WSMR and DTRA have come up in discussions about strikes on Iran in the past. The U.S. military’s heaviest conventional air-dropped weapon, the 30,000-pound-class GBU-57/B Massive Ordnance Penetrator (MOP) bunker buster bomb, has been extensively tested at multiple sites there in the past. DTRA was also directly involved in its initial development. MOPs made their combat debut during U.S. strikes last year on underground Iranian nuclear facilities at Fordow and Natanz as part of Operation Midnight Hammer. The possibility has been raised that a different site within WSMR may have been used to test the plan of attack against Fordow, which involved two ventilation shafts being hit with six GBU-57/Bs each. The bombs were dropped in rapid succession, with each one burrowing deeper and deeper into the facility below. WSMR also happens to contain the site of the first atomic bomb test in 1945.

“The plans for the test [at ALT-SHIST] were connected to the Iran war,” CNN said in its story, published yesterday, citing unnamed sources “familiar with the matter.” Beyond that, the planned testing was tied to a “need to develop a way to target Iran’s deepest-buried underground facilities and, likely, simulate U.S. strikes against specific nuclear facilities.”

CNN said it was unable to independently verify whether or not the test in question had occurred.

A formal justification for the sole-source contract to Pate Construction that DTRA released in February did not mention Iran or elaborate on the need for the new testing at ALT-SHIST, but stressed there was an urgent requirement critical to U.S. national security.

“The services required are the immediate and mission-critical enabling services for a ‘real-world’ national security ordinance [sic; ordnance] test. This is not routine construction; it is the highly specialized remediation and operational preparation of a unique, subterranean test facility at White Sands Missile Range (WSMR),” according to the justification document, which DTRA officials had approved on February 24. “The work is a critical path dependency for a live-fire test designed to validate classified capabilities against rapidly emerging threats.”

“As the incumbent contractor for over a decade, Pate Construction Co., Inc. possesses unparalleled and non-transferable tacit knowledge of this specific subterranean test facility. This is a unique Government structure with complex geological and security considerations, and Pate Construction Co., Inc.’s direct, hands-on experience is a tangible asset that no other source possesses,” the document adds. “Pate Construction Co., Inc. is the only contractor that
currently maintains a fully mobilized presence at WSMR with the specific heavy equipment and security-cleared operators required.”

CNN‘s piece says apparent work at ALT-SHIST was visible in satellite imagery of the site between mid-February and mid-March, but the outlet said it was unable to confirm whether or not this was related to the contract with Pate Construction.

ALT-SHIST is an active test site, and any work observed there earlier this year could well have been linked to other projects. For instance, additional publicly available DTRA contracting documents offer details about planned work on a specific part of the ALT-SHIST site, called Tunnel 7, tracing back to last year, as part of a project nicknamed Millstone Willemite 6 (MW-6).

“This task requires the construction contractor to repair and address the damage to Tunnel 7 caused by prior incidents, in accordance with government-provided designs, specifications, and other contract documents,” according to one contracting document dated September 15, 2025. “The contractor will also be responsible for providing support during testing activities, as well as safing after each test and general support between tests. All tunnel construction must be completed by 15 June 2027.”

“The contractor shall repair a D-shape tunnel and overburden using the D-shape of 20 feet depth and width, inside the tunnel. The contractor shall remove and repair any damage to the ribs, crown, and invert to Tunnel 7,” that same document continues. “After the repair of Tunnel 7, the contractor shall provide general construction support to instrument the tunnel in preparation for testing and then safe the tunnel for re-entry post-testing.”

The schedule for the MW-6-related work indicates that it is separate from what Pate Construction was hired to do at the site back in February.

ALT-SHIST, which was first established in 1995, is also not the only site DTRA makes use of within WSMR. As its name indicates, it is an alternate to the original SHIST site, use of which began in 1993.

“There was a small addition made to the SHIST site, but that area has been heavily used since 2007,” according to an environmental impact study the U.S. Army Corps of Engineers (USACE) completed in 2015. “The granite bedrock at these sites has been fractured and damaged by extensive testing. There are no existing granite areas adjacent to those sites where similar testing can be performed.”

USACE conducted that study in support of the establishment of a new test site at WSMR, simply called the Granite Test Site, to succeed the original SHIST. The Granite Test Site is now in use. There are many more sites within the range complex designed to simulate underground and otherwise hardened targets. This is also just one aspect of the wide array of testing that occurs on a daily basis at WSMR.

However, the presence of large areas of undisturbed granite is a key factor here, as that is particularly relevant for testing weapons designed to penetrate into extremely deeply buried facilities. CNN‘s piece yesterday noted that Iran’s Pickaxe Mountain site is built underneath a granite mountain.

“The mountain in White Sands, they specifically picked mountainous areas that were solid rock, and they used state-of-the-art tunneling technology to make the kind of cavities in the mountain that you would put this kind of [Iranian nuclear] facility in,” Gary Stradling, a retired scientist who previously worked for the Department of Energy’s Los Alamos National Laboratory (LANL), told TWZ in an interview last year. “I think that there is a lot of work that DOD has done in these kinds of facilities that is highly classified, and I couldn’t talk to you about it. This is very sophisticated work. It is not casual, and it’s not speculative. These are real experts who are doing the work. Careful, technical, quantitative work to be able to deliver this kind of war-fighting capability to the services.”

TWZ spoke to Stradling, who did work tied to earth-penetrating munitions at various points during his lengthy career, in the wake of Operation Midnight Hammer.

Me, standing at the edge of a MOP crater on a mountain top at White Sands Test Range, where detailed studies of massive earth penetrators were studied for effectiveness against deeply buried targets by the Defense Threat Reduction Agency (DTRA) —formerly Defense Nuclear Agency.… pic.twitter.com/JYq1V2xO6q

— Gary Stradling (@gary_stradling) June 24, 2025

GBU-57 MOP test

The U.S. military notably did not strike Pickaxe Mountain, which is situated immediately to the southwest of Iran’s nuclear facility at Natanz, during Operation Midnight Hammer. The site also went untouched by Israel during last year’s 12 Day War. American and Israeli forces did not target it during major combat operations earlier this year, either. All of this underscores the targeting challenge the site presents, even for strikes using MOPs, which TWZ explored in detail earlier this year and that has continued to make it a point of particular discussion.

CNN‘s report yesterday was primarily focused on a new assessment of ongoing construction at Pickaxe Mountain from the Center for Strategic and International Studies (CSIS) think tank in Washington, D.C.

Satellite “images reveal more road activity at Pickaxe Mountain in 2026 than at any point in the site’s history,” according to a report CSIS published yesterday. “There is a clear surge in construction activity in 2026 that corresponds to the raising and hardening of the portal accesses, paving of the internal road network, reinforcement around access areas, and the flattening and removal of excavation spoil.”

“This assessment can neither refute nor substantiate the Israeli intelligence claim that Iran moved centrifuges into Pickaxe Mountain,” CSIS’s report also noted. “The continuous construction, the absence of an increased internal security posture, and the lack of observed nonconstruction vehicles and equipment suggest the underground facility is not yet capable of enrichment work, if that is the intended purpose. Further analysis of daily activity would be needed to establish the site’s pattern of life beyond its current construction footprint.”

This is in line with TWZ‘s own previous reporting on Pickaxe Mountain back in July, when there were already signs of growing activity following the establishment of a shaky ceasefire between the United States and Iran the preceding month. As we wrote at that time:

“As with the strikes on Fordow, multiple bombs could be dropped on the same impact point to try to penetrate further down into Pickaxe Mountain. Whether there might be similar ventilation shafts or other weak points that could be exploited at Pickaxe Mountain is unknown. …”

“A strike ‘right in the front door’ on the tunnel entrances at Pickaxe Mountain would be another option to at least hamper access to the facility inside for a time. This could be combined with strikes aimed at sections of the tunnel networks that run deeper inside the facility, but that are still close enough to the surface to be reachable by available conventional munitions. For instance, MOPs may not be able to hit the main cavern areas, but they could possibly hit certain tunnels that might lead to them.”

“Even a combined strike on entrances and shallow tunnels at Pickaxe Mountain could still present certain challenges. Firm intelligence on exactly where the tunnels snake under the mountain could be limited, making it difficult to select the best impact points. This is exactly why the U.S. military has been investing heavily in advanced, void-sensing fuzes for MOP and other bunker buster bombs for decades now. These fuzes detect when a munition has penetrated into a sufficiently large space, such as a room or tunnel in an underground facility, to help maximize damage. Fuzes that can effectively ‘count’ floors also help to ensure the munition has burrowed sufficiently deep before detonating.”

…

“…the U.S. military could conduct follow-on strikes on the entry points at Pickaxe Mountain to disrupt any attempt to regain access, as well.”

“Destroying Pickaxe Mountain will be a scientific and targeting challenge,” CSIS also noted in its report yesterday. “It is an underground fortress buttressed by granite. It is one of the only facilities in Iran’s nuclear program that the United States has not yet struck. Structurally degrading Pickaxe Mountain requires more than just kinetic force – it takes actionable high-confidence intelligence and sophisticated mathematical modeling.”

With all this in mind, it is not at all hard to imagine how new testing at ALT-SHIST, as well as other sites, would be essential for exploring additional options for striking Pickaxe Mountain and/or other deeply-buried targets in Iran using MOPs and/or other munitions.

It’s also worth noting here that GBU-57/Bs are understood to be in relatively short supply, though it is unknown how many of them are currently in inventory. Furthermore, the U.S. Air Force’s B-2 Spirit bombers are currently the only aircraft certified to employ the huge MOPs operationally. There was a report in 2024 that prime contractor Boeing was working to expand its capacity to produce these bombs. A MOP successor, the GBU-76/B Next Generation Penetrator (NGP), is in development now, but prototyping work is expected to run through the end of Fiscal Year 2028.

President Donald Trump certainly has raised the prospect of a strike on Pickaxe Mountain publicly on several occasions since July. He has also repeatedly said that the site is being persistently surveilled, particularly from space.

“There’s another place called Pickaxe Mountain, another nice place. We may have to give them a shot there, too, because someone said there was a little movement at the site,” Trump said yesterday during a speech at a convention the Republican Party is hosting in Dallas, Texas, ahead of this year’s midterm elections. “We don’t need much. We see everything, you know, because of Space Force.”

“We may hit Pickaxe [Mountain] very soon,” the President also said while speaking to reporters at the White House last Friday.

Trump on Pickaxe Mountain: We may have to give them a shot there too. We see everything. We can the see tag on their coat. “Muhammad Al-Fayed” It’s never Muhammad Jones. pic.twitter.com/UQm939OruL

— Acyn (@Acyn) September 10, 2026

Whether growing activity at Pickaxe Mountain finally prompts a U.S. strike at the site, either alone or as part of a larger operation, remains to be seen. If and when such a mission is launched, past and future testing at sites like ALT-SHIST in New Mexico will all but certainly have played an important part.

Contact the author: joe@twz.com

Iran’s Revolutionary Guards said Wednesday they attacked two US vessels, eight oil tankers and 10 “non-compliant vessels” trying to pass through the Strait of Hormuz, state media reported.

“Two US vessels, eight oil tankers, and 10 non-compliant vessels attempting to pass through the prohibited and unsafe zone of the Strait of Hormuz were targeted,” the Guards said in a statement published by the official IRNA.

Meanwhile, six cargo ships transited the Strait of Hormuz yesterday, Tuesday, compared to nine ships the previous day and an average of about 12 ships over ten days, according to shipping data released today, Wednesday.

These numbers may change, as some ships typically choose not to operate their transponders during the voyage.

Preliminary data from Kpler at 0200 GMT showed that five of the six ships entered the strait while one exited, and the group included a Panamax-sized tanker and a medium-sized tanker.

The US-Israeli war on Iran escalated yesterday, Tuesday, as Houthi militia in Yemen, allied with Tehran, launched attacks on Saudi cities, further involving the kingdom in the conflict.

Simultaneously, US forces targeted several Iranian oil tankers, while Iran struck a US base in Jordan.

Meanwhile, 25 cargo ships transited the Bab El-Mandeb Strait yesterday, Tuesday, with 11 ships entering and 14 exiting the other vital Middle Eastern waterway.

This compares to an average of about 27 ships transiting the Bab El-Mandeb Strait over the past ten days.

Among the ships that transited the Bab El-Mandeb Strait were two Suezmax tankers, eight Aframax tankers, and a Very Large Crude Carrier.

New fuel pricing targets consumption above 110 litres monthly, doubling costs to 100,000 riyals per litre.

Iran has raised petrol prices for motorists again as the government struggles to manage declining revenues and sustain a costly subsidy regime.

The price of petrol will remain the same for the first 60 litres (16 gallons), state media reported, but there will be a higher price bracket for the next 50 litres (13 gallons). Prices will double from 50,000 riyals to 100,000 riyals ($0.07) per litre (0.3 gallons) for motorists who consume more than 110 litres (29 gallons) a month.

Iran has some of the lowest petrol prices in the world, but due to ongoing economic difficulties amid the war with the US, including punishing sanctions and a siege on Iranian ports by US forces, Iranian officials have for months considered adjusting fuel subsidies to make up for lost revenues.

“If we consume it properly, we can manage with the amount of gasoline we produce in the country,” Mohammad Bagher Ghalibaf, speaker of the Iranian parliament, said in a TV address earlier this month. “What is clear is that we need to save gasoline in our consumption. Of course, part of the responsibility for this high consumption does not lie with our people; it lies with our industry.”

Iran depends on oil exports for about 90 per cent of its budget, but these have declined from about 4 million barrels per day (bpd) to about 2.2 million bpd in August. The country is also consuming more oil than it produces domestically.

In a sign of the energy crisis, videos circulating on social media reportedly show long queues at petrol stations in Tehran.

It is the second time petrol prices have increased since December, with concerns about further increases prompting unrest.

Huge antigovernment protests in 2019 started after anger over fuel price increases. Iranians are already feeling the impact of a downturn in economic activity, high inflation, and a drop in the value of the rial.

China is buying ninety percent of Iran’s oil exports, settling transactions in renminbi, and hiding the rest beneath layers of shell companies. This is not defiance. It is a demonstration, conducted in plain sight, of exactly how far American economic reach actually extends.

Scott Bessent promised, when he launched Operation Economic Outcast last week, that no one would be above the reach of US sanctions. China’s foreign ministry responded by saying Beijing would do everything necessary to safeguard its own rights and interests. That exchange, watched by the rest of the world, is not really about Iran. It is about whether the threat of American secondary sanctions can force a country that has already fought several trade wars with Washington to a standstill into changing its economic behaviour. The answer, which China has been demonstrating methodically for months, is no.

How China Made Itself Immune to US Secondary Sanctions

The architecture of Chinese-Iranian trade has been specifically designed to sit outside dollar-system jurisdiction. Chinese banks and companies that buy Iranian oil settle transactions in renminbi or through barter arrangements, making them effectively immune to American extraterritorial authority. The handful of Chinese entities that still touch dollar-denominated transactions do so through shell companies that can be discarded and replaced faster than Washington can identify and sanction them. The result is the regulatory whack-a-mole problem that American Treasury officials privately acknowledge, eliminate one entity, and three more appear in its place, each more obscured than the last.

Washington could escalate by sanctioning major Chinese banks and companies that have no Iran ties at all, using them as leverage to pressure Beijing to rein in those that do. That option exists on paper. In practice, it would constitute a declaration of economic war against China’s financial system at a moment when the US economy is already strained by six months of conflict with Iran, oil prices are elevated, and midterm elections are eight weeks away. The Trump administration knows this, which is why Bessent’s ultimatum came with no major Chinese institution on the sanctions list. The threat was real. The enforcement mechanism was not.

What a US Victory in Iran Would Cost Beijing

China sources roughly forty percent of its oil imports from the Gulf, with Iran accounting for ten percent of that total. If the US wins this war convincingly, meaning Iran’s government collapses or capitulates and Washington reinstalls itself as the dominant security guarantor across the Gulf, the energy architecture that China has spent two decades building becomes dependent on American goodwill. Every barrel of Gulf oil that China buys would effectively pass through a security framework Washington controls.

The regional knock-on effects compound that problem. The Mecca pact between Saudi Arabia, Turkey and Pakistan, the SCO’s deepening trade and financial architecture, the China-brokered Saudi-Iran normalisation of 2023: all of these represent years of Chinese diplomatic investment in a Middle East that is gradually reducing its security dependence on the United States. An Iranian defeat that pushes regional states back under the American umbrella undoes that investment at a stroke. From Beijing’s perspective, the cost of buying Iranian oil at a discount and absorbing American secondary sanctions is considerably lower than the cost of losing the regional influence that Iran’s survival helps sustain.

Neither Ally Nor Bystander

The SCO summit in Bishkek last week illustrated Beijing’s position with more precision than any official statement. Xi met Putin and Modi bilaterally. Iran’s President Pezeshkian attended the summit and held consultations at foreign minister level. He was not invited to Beijing. He did not get a Xi bilateral. That calibrated distance is deliberate, and it reflects a Chinese calculation that is more sophisticated than either alliance or abandonment.

Beijing does not want Iran to lose. It also does not want Iran to win so completely that Tehran’s regional hegemony destabilises the Gulf relationships China has been cultivating. The Chinese position, buying Iranian oil, refusing to arm Iran, keeping diplomatic engagement at arm’s length, is designed to keep Iran functional without making China responsible for Iranian behaviour. It is the foreign policy equivalent of keeping a fire burning without touching it.

Xi’s scheduled visit to Washington later this month, coming directly after the Bishkek summit, reinforces this reading. Beijing is simultaneously demonstrating to Iran that it has economic backing and demonstrating to Washington that it has strategic restraint. Both demonstrations serve Chinese interests. Neither requires China to choose a side.

Five Things Worth Watching

• Whether Xi’s Washington visit produces any concrete understanding on Iran-related secondary sanctions. If the two sides agree on a framework that gives China cover to quietly reduce Iranian oil purchases over time, the sanctions architecture gains traction it currently lacks. If the summit produces only standard language about constructive competition, Operation Economic Outcast’s China problem remains unresolved.
• The SCO Development Bank’s progress toward implementation. If the bank moves from agreement to operational institution in the coming months, it creates dollar-independent financing infrastructure that makes secondary sanctions significantly less effective not just for China-Iran trade but for the broader Eurasian trade network the SCO is building.
• Whether any Chinese entity on the August sanctions list is large enough that its designation produces real disruption rather than being absorbed and routed around. The signal from August’s first wave was that Washington sanctioned deliberately small targets. The size and visibility of the next wave’s targets will tell you how seriously Washington is willing to press China.
• India’s position on renminbi settlement for its own Iranian oil purchases. If Delhi follows Beijing’s approach and expands non-dollar settlement for energy trade, the secondary sanctions architecture faces a second major exemption that Washington is even less able to address given how carefully it has been courting India.
• Iran’s currency trajectory. The rial has hit record lows despite Chinese oil purchases continuing. If the currency continues to deteriorate even with Chinese demand stable, it suggests Operation Economic Outcast is landing on Iran’s non-oil economy in ways that the Chinese lifeline cannot fully offset which changes the pressure calculus regardless of whether Beijing complies.

The Bottom Line

Washington designed Operation Economic Outcast to isolate Iran. What it has demonstrated is the outer boundary of American economic jurisdiction in a world where China has spent a decade building the infrastructure to sit outside it. Renminbi settlement, dark fleet shipping, teapot refineries, shell company networks, these are not improvised workarounds. They are a parallel financial architecture, constructed precisely for this contingency, and it works well enough to keep Iranian oil flowing at volumes Washington cannot stop.

The deeper problem for the Trump administration is not that China is defying its sanctions. It is that China is proving, transaction by transaction, that the sanctions cannot be enforced against a country of sufficient size and sufficient preparation. That demonstration has an audience well beyond Beijing and Tehran. Every country currently watching whether to comply with American secondary sanctions is learning the same lesson: the reach of US economic power has a ceiling, and China has found it.