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US Vice President JD Vance claims Washington has “destroyed” Iran’s nuclear programme and degraded its military, as Tehran demands US compensation and an end to the naval blockade before reopening the Strait of Hormuz.

A funeral was held for the victims of last week’s US strike on Iran’s Qeshm Island, where a couple and their two-year-old child were killed. Iran’s chief negotiator and parliamentary speaker, Mohammad Bagher Ghalibaf, vowed the US would “pay the price” for their deaths.

July 31 (UPI) — The United States military is preparing to launch a fresh wave of airstrikes on Iran as early as this weekend, unnamed sources told several news outlets Friday.

Sources told CBS News the attacks are likely to target energy infrastructure, but President Donald Trump is yet to give the final order to begin the assault.

The Israeli military might also be included in attacking Iran for the first time in weeks, Axios reported.

“We will be hitting them very hard,” Trump told reporters at Camp David on Friday. “At some point, they’re going to say, ‘We just can’t take it anymore.'”

Striking civilian infrastructure is a war crime under international humanitarian law.

Israeli Defense Minister Israel Katz on Tuesday said, “We very much want to strike Iran’s energy targets.”

“The United States is not approving it at the moment because of the concern that Iran would attack neighboring countries, causing a global oil crisis,” he told the country’s Channel 14, as reported by The Times of Israel.

“As far as we’re concerned, we’re prepared to set [Iran] back 40 years,” Katz added.

Pentagon spokesperson Sean Parnell would not comment on specific targets before the strikes.

“The Department of War is locked and loaded, ready to execute the President’s directives at a moment’s notice,” Parnell said in a statement to CBS News.

One senior Iranian official was quoted as saying attacks against infrastructure are a form of “madness” and the country was prepared to retaliate, Al-Jazeera reported.

The official added Iran’s response would include “the vital infrastructure of the Zionist regime and the energy infrastructure of the US in the region.”

July 27 (UPI) — President Donald Trump said Monday that the United States paused attacks on Iran at Iranian leaders’ request but said he would order “strong military action” if negotiations fail.

However, there were mixed messages on what those talks entailed Monday. Iran’s Foreign Ministry said there were no new negotiations with the United States, CNN reported, though there are discussions with Oman over the Strait of Hormuz.

The United States halted attacks on Iran three days ago after 13 consecutive days of nightly bombing.

“We are in very deep talks with Iran,” Trump told Axios during an interview Monday. “If they don’t work out, we will go back to very strong military action.”

The president said in that interview that he isn’t willing to give much time to diplomacy, and that “either it goes fast or not at all.”

The Guardian reported that Trump later told reporters on Air Force One that, “They want to meet, and we’re meeting. Without what we did, they wouldn’t even be talking to us. … They would not have requested the meeting if we were doing poorly. The only reason they want to meet is because we’ve been hitting them very hard.”

Later yet, at a rally in Michigan, Trump said there are “very friendly negotiations” going on.

Oman’s Foreign Ministry said Foreign Minister Badr Al-Busaidi held calls with his counterparts from Iran, Saudi Arabia, Qatar, Kuwait and Egypt in a diplomatic push.

Al-Busaidi said in a statement that the talks between Iran and Oman “focused on ways to enhance the prospects for reaching practical, fair and sustainable arrangement for maritime navigation … throughthe Strait of Hormuz,” Axios reported.

Esmaeil Baghaei, a spokesman for Iran’s Foreign Ministry, said Tehran “would never allow the United States to determine the timing of war and peace.”

“Mediators may convey messages from the American side to us regarding current developments in the region,” he said, the Guardian reported. “But at present we are not engaged in any negotiations with the United States.”

Baghaei said the talks with Oman were “useful and constructive” but that they have nothing to do with the United States.

Tehran, Iran – Iran and the United States have returned to mediated talks, and their military action is temporarily suspended, but the war continues to impact international maritime corridors beyond the Strait of Hormuz as well as domestic markets.

The near-total closure of the strategic waterway, disruptions in the Red Sea by the Iran-aligned Houthis in Yemen and Ukraine attacking an Iranian vessel in the Caspian Sea have all kept tensions high.

Iran’s government is also facing more tough choices, including a potential fuel price hike amid high social and economic discontent, as the US military enforces a naval blockade of the country’s southern ports for a second time.

The Ministry of Petroleum said on Saturday that Iran has sold $11.5bn of crude oil during the war without specifying the exact dates and $6.5bn during the period of the now-suspended memorandum of understanding (MoU) signed with the US last month. It said the combined figure represented 60 percent of the full-year oil revenue target in the budget.

The signing of the June 17 MoU led to the partial reopening of the Strait of Hormuz and lifting of the US naval blockade on Iran, which eased some of the pressure on global oil markets and allowed Iran to export oil stored on supertankers waiting to sail from its territorial waters. Iran’s Petroleum Ministry said increased oil prices generated about $3bn in additional value in the first half of the year and $11bn from the yields has so far been transferred to government coffers despite US embargoes.

During the previous blockade that was imposed on April 13 and lasted a little over two months, Iranian authorities attested to near-zero crude exports. A prolonged second blockade risks further reducing Iran’s export revenues and piling pressure on Kharg Island, through which about 90 percent of Iran’s crude oil exports pass, and other Iranian storage and export sites, which could in turn affect production at petrochemical plants and make an eventual restart costlier and slower.

The US military’s Central Command (CENTCOM) said that as of Saturday, soldiers had redirected 12 commercial vessels trying to run the blockade that has been in place since mid-July, disabled two that did not comply and boarded two “to ensure total compliance”.

The US military also showed footage of heavily armed soldiers rappelling down from a helicopter onto the deck of the Charminar, an Iran-linked oil tanker subject to US sanctions since last year for allegedly being part of the Shamkhani network. The US says Iranian oil magnate Mohammad Hossein Shamkhani plays a central role in Iranian and Russian shadow fleet operations.

Iran has also said it has been redirecting multiple ships each day to keep the strait closed as its armed forces emphasised that they will not bow to pressure. On Sunday, Iranian media reports said a vessel blew up after hitting a naval mine in the Strait of Hormuz.

Still, CENTCOM has stopped extensive bombing strikes against Iran for two nights with US Ambassador to the United Nations Mike Waltz saying President Donald Trump is giving talks with Tehran “some space”.

Iran has also stopped retaliatory attacks across the region while Ministry of Foreign Affairs spokesman Esmaeil Baghaei said discussions with Oman on reopening the Strait of Hormuz have been productive.

The domestic picture

The oil export constraints, however, are still adding to Iran’s existing economic woes, which are linked to domestic structural issues and mismanagement as well as years of harsh sanctions.

Iran’s infrastructure has also suffered significant damage during the war launched by the US and Israel in late February and may fare worse if the conflict escalates.

The government said last month that about 230 million cubic metres (300 million cubic yards) per day of Iran’s pre-war natural gas output of roughly 650 million cubic metres (850 million cubic yards) was lost due to US and Israeli bombing, worsening electricity and petrochemical shortages.

Sekhavat Asadi, managing director of the Pars Special Economic Energy Zone, said on Sunday that Iran expects to restore more than 100 million cubic metres (130 million cubic yards) per day of that lost production capacity within the coming months.

Authorities are also managing a fuel imbalance as the country faces a deficit of more than 20 million litres (5.3 million gallons) per day of petrol. The shortage is managed through limited but costly imports, blending fuel components, tapping inventories stocked before the war and repeatedly asking citizens to consume less.

The Petroleum Ministry said tighter monthly fuel consumption caps may be imposed if the imbalance persists.

The government said this week that it is seriously considering doubling the price of a third tier of monthly petrol quotas allocated to individuals.

Another petrol price hike was made in December, weeks before the country was swept by a wave of nationwide protests, in which thousands of people were killed in a government crackdown in January. An overnight fuel price increase in November 2019 also triggered deadly nationwide protests.

The capital, Tehran, and cities across the country are facing rolling electricity cuts, which also create water and communications disruptions. President Masoud Pezeshkian said he has ordered industries not to be cut off until late September to avoid further inflaming a bruised jobs market.

The closure of the Strait of Hormuz has also hit Iran’s commerce with China, its largest trading partner and buyer of oil, which has considerably curtailed its overall crude oil imports to adapt to conditions created by the war.

But nonoil trade with China has also deteriorated since the start of the war, falling by 75 percent in March and June when compared with a year before, according to Chinese customs data.

Two near-total internet shutdowns imposed by the authorities, first during the January protests and then during the war, only worsened conditions for Iran’s economy this year as it battles chronic inflation and a rapid dwindling of public purchasing power.

A report last year by the Saba Pension Strategies Institute, a think tank affiliated with Iran’s state-run pension fund, found that while a little more than 30 percent of Iranians lived below the poverty line five years ago, that rate was projected to have reached 45 percent this year – and was still rising.

Spread to Bab al-Mandeb, Caspian Sea

After repeated Iranian threats that escalating the war could spread the scope of maritime disruptions to the Red Sea, the Houthis in Yemen last week declared a blockade against Saudi Arabia, turning back or hitting vessels transiting near the strait of Bab al-Mandeb while also bombing Saudi oil facilities.

Dozens of commodity vessels have still continued their transit through the strait, including Chinese supertankers, but war-risk premiums have increased, raising import and insurance costs for all.

Saudi authorities, who lead a coalition backing Yemen’s internationally recognised government against the Houthis, have responded by launching major air attacks across Yemen.

And farther north, Ukraine has confirmed that it struck a vessel in the Caspian Sea with President Volodymyr Zelenskyy alleging it was carrying Iran-linked military cargo.

Iran’s authorities said it was a commercial vessel importing iron from Astrakhan, a port on the Volga River in Russia, and bound for Bandar Anzali in northern Iran. They said one sailor was killed and three were wounded.

The Iranian Ministry of Foreign Affairs summoned Kyiv’s charge d’affaires in Tehran to deliver a strong protest and a warning that “the act will not go unanswered”.

The incident has raised concerns that the Caspian Sea, a waterway previously used safely for trade, could also become the scene of more military confrontations.

Iran’s Caspian trade is primarily with Russia, Kazakhstan, Turkmenistan and Azerbaijan. It imports essential goods, such as wheat and other grains, corn, barley and animal feed as well as timber and fertiliser.

The country’s exports through the northern maritime route include construction materials, steel products, agricultural goods and some refined petrochemical products.

The war’s expanding disruptions have only prompted hardline state-linked analysts to advocate closer strategic partnerships with China and Russia.

“We can now say that the two war fronts in the Middle East and Ukraine are increasingly intertwined,” Mahdi Kharratiyan, a political analyst linked with Iran’s Islamic Revolutionary Guard Corps, wrote on X on Sunday.

Iran says it has halted ‘retaliatory operations’ in the Gulf but warns that if the US continues its attacks, the conflict will expand across the region. Army spokesman Mohammad Akraminia had a message for the US ahead of Israeli Prime Minister Benjamin Netanyahu’s visit to Washington.

Tehran, Iran – A public rift has emerged between Iran’s government and state television over how to portray the state of war and negotiations with the United States, as mediators try to nudge both countries towards diplomacy.

The Government Information Council on Friday accused state broadcaster IRIB of “censorship” after parts of a speech by President Masoud Pezeshkian earlier in the week were not shown to the public.

The broadcaster, whose head is appointed by the supreme leader, issued a response on Saturday rejecting the government’s “accusations and improper attributions”, and emphasised that it has a duty to prevent “an incorrect and unreal suggestion of duality in the country’s leadership pillars”.

In his speech, Pezeshkian had pointed out that after last year’s 12-day war with Israel, former Supreme Leader Ayatollah Ali Khamenei publicly said there would be no negotiations with Washington – but privately had given his approval.

“We went to the dear leader, explained the situation, and asked him what to do since he had said the ‘no war, no peace’ conditions are bad for the country,” the president said. “He ordered us to go negotiate. We started the talks based on his order.”

The government said in its statement the move to cut that section of the speech was part of a series of “unusual actions” taken by state television concerning recent comments made by the heads of the government, parliament and judiciary.

It pointed out that earlier this month, a part of the parliament speaker and chief negotiator Mohammad Bagher Ghalibaf’s interview with state television dealing with negotiations had also been cut. The government council added that a part of a speech earlier this week by judiciary head Gholam-Hossein Mohseni-Ejei was not aired either, in which he expressed backing for the president.

Foreign Minister Abbas Araghchi has also separately criticised IRIB, saying during an interview with a state-linked outlet released on Saturday that he “fought with a sword” in wartime interviews with US media such as Fox, CNN and others. The chief diplomat said he expected state television to show how Iran’s case was being strongly presented to US audiences and policymakers, but only one or two subtitles from the interviews ended up going on air.

Araghchi also rejected a notion raised by hardliners that the now-suspended memorandum of understanding signed with the US last month was “imposed” on new Supreme Leader Mojtaba Khamenei, as some hardliners have claimed. He characterised it as the best possible agreement under the circumstances.

In its own statement, the government blamed the actions on “a political faction within” state television, in an apparent reference to the Paydari Front of ultrahardliners, and said their actions could serve to undermine national security and social cohesion.

IRIB, in a statement published by its public relations department, countered that broadcasting the president’s segment would have propagated an appearance of division.

Both sides accused each other of undermining the decree issued last week by Mojtaba Khamenei to reach a “sacred unity” in face of military, economic and diplomatic pressure by the US.

Mohammad Mirzaei, a member of parliament and spokesperson of a committee tasked with exerting oversight on IRIB, said on Saturday that directors of the state broadcaster have been warned about the necessity to display different viewpoints and to act as a “sign of national unity”.

Conservative journalist Mohammad Mohajeri told local media that the broadcaster is now at its most expensive and least effective. Reformist activist Mohammad-Sadegh Javadi-Hesar described the deeper problem as “one government being installed and another government called IRIB operating against it”.

Reformist Entekhab news outlet reported, citing an unnamed source, that Pezeshkian sharply reprimanded IRIB chief Peyman Jebeli at a cabinet meeting after the row over the negotiations. Jebeli, who was appointed by Ali Khamenei in 2021, was media deputy at the Supreme National Security Council when Saeed Jalili, the only council member said to have voted against an interim deal with the US last month, was its secretary.

Hardline lawmaker Meysam Zohourian said the president has threatened to cut state television’s budget, but the administration has not confirmed this.

As the public sparring unfolded, mediators from Oman were in Tehran on Friday to discuss the management of the Strait of Hormuz, a vital waterway whose control has become a central point of contention between the US and Iran.

US President Donald Trump argued on Friday the war was going “extremely well” and that Israeli Prime Minister Benjamin Netanyahu will visit Washington in the coming days.

He said the two sides continued to talk through mediators, but that he did not expect any agreement soon.

The US president also refused to answer whether realising his threat of systematically attacking power plants and bridges in Iran in case of a war escalation would constitute war crimes.

Mohammad Bagher Zolghadr, the secretary of Iran’s Supreme National Security Council, on Saturday responded by saying missile and drone launches across the region will continue “until the full surrender of the enemy” and avenging the blood of civilians killed during the war.

Tehran, Iran – Iran’s judiciary has announced several executions this week linked to unrest over recent months, as part of a campaign against those accused of trying to “create divisions” during the war with the United States.

The judiciary’s official news outlet on Wednesday announced the execution of Mehdi Khanaki, who was identified as an “active element of a terrorist group” arrested during nationwide protests in January.

State television showed security forces raiding a home in Karaj near Tehran, where several handguns, ammunition and explosives were allegedly found. A “revolutionary court” in the city tried him for “operational action in favour of the Zionist regime, the United States and hostile groups”, among other things.

On Sunday, two more men were executed in connection with a 16-defendant case arising from deadly protests in Isfahan, in central Iran, on January 8. The authorities said the men played a role in the killing of several police officers, but foreign-based activists have countered the state narrative and alleged a lack of due process and the use of torture.

The protests started last December 28 in central Tehran over economic issues but quickly morphed into nationwide expressions of frustration at the establishment, as in previous rounds of demonstrations.

The authorities refer to the unrest, when thousands were killed across the country, mostly on the nights of January 8 and 9 , as a “coup” orchestrated by the US and Israel.

They also reject findings by Amnesty International and other international human rights organisations that security forces carried out “mass unlawful killings on an unprecedented scale” during a total internet and communications shutdown.

Tens of thousands have been arrested in the aftermath of the protests, as well as the US-Israeli war that started on February 28 .

The Coordinating Council of Iranian Teachers’ Trade Associations, a non-governmental body inside Iran, last week condemned what it called “intensified prison sentences and continued pressure on teachers’ guild activists” by the authorities.

Security-related offences follow a law passed after the 12-day war with Israel in June 2025, which aims to more severely punish “espionage” and other actions perceived to be cooperating with “enemies” and undermining national security.

Hundreds of Iranians, including businessmen and celebrities based in Iran and abroad, have also had their entire assets confiscated by the state.

State TV also periodically airs “confessions” from people arrested or executed for those charges.

The latest was broadcast on Monday, when a young man with a blurred-out face could be seen saying he posted Instagram stories that opposed the Islamic Republic during the current war. Tehran’s police force said the unidentified man released “norm-breaking and anti-homeland content” online in an attempt to “damage the psychological security of the society”.

“I made a mistake and I will not repeat it. I am now sure that we must all now stand together to build Iran, nobody else has a right to commit an aggression against our country,” he said.

On July 13 , Iran’s Ministry of Intelligence released a list of “hostile media” that included dozens of media networks, 61 individual “human-media” figures and 310 accounts or online pages. It warned that sending photographs, video or information to a listed outlet, person or account can trigger a prison sentence and permanent exclusion from public employment, unless authorities invoke a more serious charge.

‘Infiltrators’

The message goes along with rhetoric of steadfastness and togetherness that has been repeatedly emphasised by Iranian authorities during the war.

Earlier this week, Mojtaba Khamenei, who was selected as Iran’s new supreme leader in March after his father, Ayatollah Ali Khamenei, was killed in the opening salvo of the war, called for a “sacred unity” among the people and political factions.

Speaking during a televised meeting on Monday with President Masoud Pezeshkian and senior clerical judges in the judiciary, Chief Justice Gholam-Hossein Mohseni-Ejei doubled down on the same message – complete with heavy religious undertones.

“We must not allow devils among humans and jinn to infiltrate the ranks of believers and our people to create division and schism,” he said.

The judiciary chief said these “alarmists, rumour-spreaders, hypocrites and infiltrators” would not all declare themselves as such, instead disguising themselves as insiders who would set people against each other.

This comes as the US increasingly points to alleged rifts among Iranian authorities, and categorises them into a faction that wants to keep fighting, especially over the strategically vital Strait of Hormuz, and another group that wishes to reach a negotiated resolution soon in order to stop the country from being destroyed.

Iranian authorities have rejected such classifications.

Iranian strikes have targeted Kuwait’s power and water desalination plant. Al Jazeera’s Victoria Gatenby explains what that means for Kuwait and the rest of the Gulf Cooperation Council countries.

A message attributed to Iran’s Supreme Leader Mojtaba Khamenei has promised “unforgettable lessons” to Washington during their escalating conflict. But it also homed in on another theme that tempered some of the fire of his warnings against the US, amid eight nights of renewed fighting between the two countries.

Khamenei, who has not been seen or heard from since being made supreme leader in March, said Iranians must uphold “sacred unity” as a fundamental imperative, particularly against the United States.

His message also stated that it was a duty for the Iranian population and officials to refrain from “division, political disputes, and increases in social differences”. Iran’s enemies, he said, likely referring to the US and Israel, “must not detect any sign of weakness from us”.

The call for national unity comes against the backdrop of events in June, when another Khamenei statement stirred debate and controversy among some of the most hardline supporters of the Islamic Republic regarding the recently signed memorandum of understanding (MoU) with the US.

Khamenei said that although he “held a different view” about the agreement to pause four months of fighting, he approved it after President Masoud Pezeshkian, as chairman of the Supreme National Security Council, accepted responsibility for the deal.

This fired up unyielding supporters of the Islamic Republic who continue to take to city squares and streets at night with backing from armed security forces, angered about the deal.

Critics believe Khamenei was being forced into accepting a bad deal, and hardline clerical lawmaker Mahmoud Nabavian even resorted to reading from classified material on live television in an apparent attempt to derail the arrangement. He was removed from the parliament’s National Security and Foreign Policy Committee earlier this month.

Others went as far as accusing officials of treason, and the president and other officials linked to the deal were heckled during the funeral ceremonies for assassinated Supreme Leader Ayatollah Ali Khamenei earlier this month.

The MoU has been suspended by Tehran but was already effectively on the verge of collapse after Iran and the US traded fire over control of the strategic Strait of Hormuz over the past week.

Projection of military and political unity

Since Mojtaba Khamenei’s statement on Saturday, other officials have strived to present a united front between armed forces and the political and diplomatic apparatus, each with their own views on the MoU.

Ali Abdollahi, the head of Iran’s wartime joint command, vowed that the armed forces will heed Khamenei’s directive for “sacred unity and national cohesion”.

But he also warned the US, which he referred to as a “big Satan and criminal enemy”, that it will face a “decisive and destructive response” for its recent attacks on Iran, which has seen bridges, roads, and other civilian infrastructure destroyed.

President Pezeshkian thanked the supreme leader’s “wise” message and highlighted the part where he urged “trust” in the heads of government, parliament and judiciary.

“Adherence to the means of sacred unity and refraining from division and discord is the key to victory at this historic juncture,” he wrote on X.

Mohammad Bagher Ghalibaf, the parliament speaker who has faced harsh criticism from hardliners as chief negotiator in talks with the Americans, said following Khamenei’s directive is critical to Iran’s success.

“We must regard obedience to this religious and national decree of the supreme leader of the revolution as an important part of our historical role in national resistance and governance of the country,” he also tweeted in Persian on Sunday.

These messages appeared aimed at foreign audiences, coming shortly after senior US officials, anonymously briefing media in Washington, tried to blame the Hormuz escalation on an “errant” hardline faction inside Iran seeking to obstruct negotiations.

The state-linked Khorasan newspaper published an editorial on Sunday saying that Khamenei’s latest statement carried the message that “criticism is accepted, but never accusations” against officials.

“To those who claim to be revolutionaries, the supreme leader’s message was an ultimatum for you: Stop telling lies about the authorities,” the article read.

Iran’s military and political officials did not directly address the claim earlier this month, but released more statements proclaiming a unified view on how to address the conflict and regarding control of the Strait of Hormuz.

Speaking during an interview released on Sunday, Iran’s Foreign Minister Abbas Araghchi continued to back a negotiated end to the war, which has seen Iran’s civilian infrastructure systematically targeted in US air strikes over the past week.

“If we had reached the [April] ceasefire 10 days earlier, we still had Larijani, Khatib, Asaluyeh and Foolad Mobarakeh,” the chief diplomat said in reference to assassinated security chief Ali Larijani, intelligence minister Esmail Khatib, and the country’s heavily bombed petrochemical facilities and steel plants.

But as tit-for-tat strikes continue between the two sides, there is no sign of both parties returning to the negotiating table.

July 18 (UPI) — Iran’s supreme leader, Ayatollah Mojtaba Khamenei called the United States the “Great Satan,” ramping up the war of words amid an actual war in the Persian Gulf.

“Today, the Great Satan has once again revealed its true, unmasked face, so that this dark episode of criminality and broken promises serves as yet another indisputable testament to the U.S.’s dishonesty, irrationality, unreliability, and malicious nature,” a post on X from Khamenei’s account said Saturday.

He also said, in another post: “Coercion, totalitarianism, and brutality are inseparable components of the U.S. creed and doctrine.”

On his Telegram channel, Khamenei said, “The Great Satan has once again revealed its malicious nature.

“The repeated breaches of the agreement by the Great Satan [the U.S.] regarding the memorandum of understanding (MOU) signed by the Presidents of Iran and the United States have once again laid bare a fundamental truth: the signature of the U.S. President is utterly worthless and devoid of credibility. It further reaffirms that coercion, totalitarianism, and brutality are inseparable components of the U.S. creed and doctrine,” he said.

“The Great Satan” is an epithet for the United States and was coined by supreme leader Ayatollah Ruhollah Khomeini in November 1979, one day after 66 American diplomats and civilians were taken hostage at the U.S. embassy in Tehran. Most of the hostages were held for 444 days.

Iran and the United States have increased strikes in the region for the past week. Both countries are enforcing blockades in the Strait of Hormuz: Iran is preventing ships from passing, and the United States is blocking Iranian ships and ports. The strait is a vital waterway for oil and gas transport.

As of this writing, President Donald Trump hasn’t responded on his social media channel.

Tehran, Iran – The United States has reinforced its naval blockade on Iran’s southern ports, amid the escalating military confrontation between them.

The US blockade on Iran was first imposed in mid-April and remained for over nine weeks. It was only lifted after the two sides signed a Memorandum of Understanding (MoU) in June to end four months of fighting and reopen the Strait of Hormuz.

Iran immediately began exporting tens of millions of barrels of crude oil, much of it stored on supertankers anchored close to its oil terminals. However, after the recent resurgence in military strikes over control of the Strait of Hormuz, Washington rescinded oil and banking waivers issued as part of the MoU and prevented vessels linked to Iran from returning to port to load more Iranian oil.

Since the MoU effectively fell apart due to recent strikes, US Central Command (CENTCOM) has redirected several ships operating in the Strait of Hormuz. It also launched a strike to disable the Curacao-flagged supertanker Belma, which had allegedly been transporting Iranian crude during the war.

Iran has also been accused of striking ships in the waterway, leading to the US bombing Iranian coastal areas.

Iranian authorities have acknowledged the previous blockade drastically reduced Iranian crude exports. Iran’s parliament speaker and chief negotiator, Mohammad Bagher Ghalibaf, said in a TV interview at the end of June that “we did not export even one barrel” during the blockade.

Energy analyst Hamidreza Shokouhi told Al Jazeera that the new US siege means that at least 1.5 million barrels per day of Iranian oil exports will be taken off the market. That has contributed to pushing oil prices up to around $90 per barrel and sustained conflict could cause further increases.

“That means more pressure on global strategic reserves, which have already been tapped during the war and are facing unprecedented pressure,” he said.

Washington’s insistence on vessels using the southern route of the Strait of Hormuz close to the coast of Oman for the duration of the MoU has contributed to the current military escalation, the analyst said.

Shokouhi noted that Iran responded to the siege by trying to ensure that no other regional country could export their oil via the strait, piling pressure on the US and its allies.

“When the US acts this way, Iran also moves in the direction of not prioritising the economy and using the leverage at its disposal,” Shokouhi said.

A broadening conflict

Seven nights of tit-for-tat strikes between the US and Iran have quickly escalated and intensified as the week progressed.

The attacks left a trail of destruction in both Iran and countries across the region, with Kuwait and Bahrain heavily targeted by Iranian missiles and drones in recent days.

The US military has also heavily targeted provinces across Iran, particularly areas in the south closer to the strait.

Civilian infrastructure – including bridges and tunnels, ports and dock facilities, power stations and water plants – have been systematically hit, along with military sites. Some have speculated that could be in preparation for a ground invasion of Iranian coastal regions.

The Aq Tekeh railway bridge in the northern Iranian province of Golestan was among the first targets to be struck by US forces last week after the fighting re-erupted.

Iranian authorities said damage to the bridge was quickly repaired, but the strike signalled US willingness to attack potential import-export routes to exacerbate the impact of the naval blockade.

Aq Tekeh is on the Gorgan-Incheh Borun line, which connects Iran to the east, including Turkmenistan, Russia and China. It is where food and other essentials are imported from Central Asia and Iranian goods are exported, such as iron ore and polyethylene.

Rising inflation

The previous US naval blockade had also significantly impacted goods and markets in Iran, making everyday life for over 90 million people more difficult.

Although there were no widespread shortages of staples, Iran’s inflation rate – already one of the world’s highest – surged. The price of some basic foodstuffs, such as eggs, chicken and cooking oil, has more than tripled compared to a year ago.

Price increases have also damaged other sectors of the Iranian economy and industries.

“Our sales are very inconsistent. The market is struggling to find prices, there’s too much instability and uncertainty about the future,” said Borzou, a merchant dealing in industrial motors and equipment at Tehran’s Grand Bazaar.

“It looks like most distributors here are still tapping into imported inventories from before, we don’t know what to expect in a few months since many of these goods came through China and the UAE and not all can be imported through inland routes,” he told Al Jazeera.

Rial hits all-time low

There has also been intense pressure on the Iranian rial from the renewed military escalation and reimposition of the naval blockade.

The rial changed hands for over 1.93 million against the US dollar in Tehran’s open market on Saturday, the first day of the Iranian week, registering a new all-time low.

The Tehran Stock Exchange continued its downward trend over the past week, with its main index losing another 120,000 points or 2.4 percent on Saturday to stand at 4.77 million.

Iran’s armed forces have warned they will retaliate against any US strikes on Iran’s civilian infrastructure by attacking similar targets in regional countries hosting US military bases.

“Let’s not forget that the US and Israel started attacks against infrastructure, when they hit South Pars gas fields, Tehran’s oil depots and the petrochemicals in Mahshahr,” said energy analyst Shokouhi.

Utilising help from the Houthi group in Yemen, Tehran could also cause significant disruptions to shipping in the strategically important Bab al-Mandab strait off Yemen’s coast – if US President Donald Trump realises his threat to hit more civilian infrastructure in Iran such as power plants and bridges.

“Trump’s actions over recent months, and particularly over recent days, have only made the situation more intractable and the outlook more uncertain. The current situation cannot continue for much longer, but it is broadening the scope of the conflict and that is concerning,” Shokouhi said.

U.S. President Donald Trump has threatened a strike on a very hardened Iranian facility known as Pickaxe Mountain, saying it is ripe for a “nice big fat shot right in the front door.” Trump’s comments underscore the challenges involved in holding this extremely deeply-buried site, which is tied to Iran’s nuclear program, at risk. The installation notably went untouched during the Operation Midnight Hammer strikes on Iran in June 2025, and was not struck in the course of Operation Epic Fury this year, either. So, here is what Pickaxe Mountain is, why it matters, and why it would be so hard to destroy.

Trump spoke about Pickaxe Mountain, also known as Kuh-e Kolang Gaz La, during a phone interview yesterday with Hugh Hewitt on the Salem News Channel network. This came amid renewed fighting between the United States and Iran, which broke out last week and has continued to escalate. The regime in Tehran has now declared the highly strategic Strait of Hormuz closed again to all maritime traffic, while the U.S. military is moving to reimpose a blockade of Iranian ports. This is all despite the signing of a 14-point Memorandum of Understanding (MOU) last month that included the extension of an already fragile ceasefire. Readers can get caught up on the broader situation in the Middle East with our recent reporting here.

“Before you enter into another deal, will you insist that IAEA [International Atomic Energy Agency] inspectors get down into that deep, deep, deep tunnel and find out if they got a doomsday machine down there?” Hewitt asked Trump during their conversation yesterday.

“They don’t have it because we have eyes with Space Force, and everything else. We have a lot of eyes on it [Pickaxe Mountain],” Trump said in response. “But Pickaxe is a possible target for a nice big fat shot right near the front door, and I think that maybe you’ll see that.”

“We see no activity there. They’re not doing well with their nuclear situation. Every time we hear about it, we blow it up. So they don’t like talking about it,” Trump added. “But we’ll probably give Pickaxe a shot relatively soon.”

What is Pickaxe Mountain?

It should be noted here up front that there are actually assessed to be two independent tunnel networks under Pickaxe Mountain. One was built circa 2007, and the construction of the other began around 2020. The entire complex, which is contained within a single large security perimeter, is situated immediately to the southwest of Iran’s nuclear facility at Natanz, as seen in the satellite image we obtained from Vantor below. As an aside, Natanz was one of the facilities that U.S. forces struck during Operation Midnight Hammer. Natanz and Pickaxe Mountain are roughly in the center of Iran.

In the past, Iran has openly discussed plans to produce centrifuges to support its nuclear enrichment efforts at the newer facility at Pickaxe Mountain. It is also estimated to be large enough to house an actual enrichment plant, as well as other nuclear infrastructure, but exactly what is inside remains unconfirmed. Hewitt’s question yesterday reflected the fact that international inspectors have not been given any access to the overall site to date.

In light of strikes on other Iranian nuclear sites since last year, there is also the possibility that Iran may have relocated nuclear assets from other facilities to the more extensively hardened ones under Pickaxe Mountain.

In terms of activity, satellite imagery TWZ has obtained from Vantor, seen below, does show dump trucks and other vehicles moving in and out of one of two entrances to the newer tunnel network on the western side of Pickaxe Mountain on June 21. There are also two other entrances on the eastern side.

Previous satellite imagery had shown Iran taking steps to at least partially block access to the newer facility after the start of U.S. and Israeli strikes on February 28, according to the Institute for Science and International Security (ISIS) think tank. Before the conflict erupted, Iran was also observed to have buried and hardened the entrances to the tunnel network built in 2007, again per ISIS’ assessments.

Last year, TWZ had called attention to efforts to at least partially seal up Iran’s nuclear facility at Fordow before Operation Midnight Hammer. Similar activity has been observed in the past year at Natanz, Isfahan (also written Esfahan), and other hardened nuclear sites in Iran. As we have explored in detail in the past, sealing tunnel entrances and other access points creates an important deterrent to ground raids, as well as potentially offering additional hardening against standoff strikes. We will come back to this later on.

“Unlike the situation at both the Fordow and Esfahan tunnel entrances, this material [at the eastern entrances to the newer facility at Pickaxe Mountain] does not provide complete tunnel entrance obscuration at either portal,” ISIS noted in an assessment back in May. “Nonetheless, this material would appear to be sufficient to significantly hinder rapid ingress/egress by vehicles and would require the use of heavy earth moving equipment to gain such access and clear an unobstructed path inside. At present, we do not yet see evidence of such blockage having been undertaken at the two western tunnel portals of the larger complex.”

A shot in the door and not from above?

All of this brings us back to Trump’s comment about the possibility of a “nice big fat shot right in the front door” at Pickaxe Mountain. For years, experts have talked about the likelihood that the main caverns under the mountain are beyond the reach of even the largest known conventional bunker buster bomb in U.S. inventory, the 30,000-pound-class GBU-57/B Massive Ordnance Penetrator (MOP). The MOP was developed, at least in part, specifically to hold underground facilities in Iran at risk. Construction at Pickaxe Mountain, especially in the past five years, is a clear response to U.S. threats.

GBU-57 MOP test

MOPs were the centerpiece during the Operation Midnight Hammer strikes, with 12 being dropped on Fordow and another two on Natanz. To get at the actual targets at Fordow, six MOPs were dropped on two specific ventilation shafts, with each successive bomb burrowing deeper down into the complex below. This underscores the challenges that would be involved in attempting a similar operation against Pickaxe Mountain.

The available stockpile of MOPs was also understood to be relatively limited even before Operation Midnight Hammer, and it is unknown how many are currently in inventory. The U.S. Air Force is now in the process of acquiring a successor to MOP, called the GBU-76/B Next Generation Penetrator (NGP), but that is not expected to enter service for some time.

The United States does also have Earth-penetrating B61-11 gravity bombs in its nuclear stockpile, specifically to prosecute extremely deeply buried strategic targets. However, there is next to no chance the U.S. government would initiate the use of nuclear weapons against Iran absent anything approaching a proportionate, imminent threat or attack. Doing so would be a beyond massive escalation with serious worldwide ramifications, and there is no indication that American authorities are at all considering taking that step.

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. Trump’s remarks to Hugh Hewitt would certainly seem to suggest otherwise.

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.

It is possible that additional tactics, techniques, and procedures could be brought to bear to increase the effectiveness of any strikes on Pickaxe Mountain and further complicate any efforts to dig out the site afterward. Just last month, TWZ explored in detail the benefits of near-horizontal strikes on fortified targets, as well as of ‘skipping’ munitions into tunnel and cave entrances. The Pentagon’s 2027 Fiscal Year budget proposal had revealed interest in enhancing the capabilities of 2,000-pound-class Joint Direct Attack Munition-Extended Range (JDAM-ER) precision-guided glide bombs in the bunker-busting role, which could further enable these kinds of lateral strikes. If appropriate funding is allocated, the Defense Threat Reduction Agency (DTRA) would be responsible for leading this work. DTRA is a multi-faceted organization focused on responding to Weapons of Mass Destruction (WMD) threats, and notably played a critical role in the development of the MOP.

As noted earlier, 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. Trump’s conversation with Hugh Hewitt yesterday indicates that the site is, unsurprisingly, already under heavy surveillance, including by regular spy satellite passes. Currently, this is the tactic being employed at other critical sites, like the similar mountain bunker facility in Isfahan, where it’s thought that much of Iran’s enriched uranium is buried. By striking any equipment or personnel attempting to access the collapsed tunnels, the problem could theoretically be ‘maintenanced’ indefinitely.

Limited access to underground sites for a protracted period of time might have second-order impacts, too. This would depend on whether the equipment or anything else contained therein requires regular maintenance or other attention to remain usable or otherwise prevent degradation.

Other considerations

Mounting a major operation against Pickaxe Mountain of any kind could entail additional complexities and risks. A total of 125 aircraft, including seven B-2 bombers, as well as fighters, tankers, and other supporting platforms, took part in Operation Midnight Hammer. U.S. Navy vessels in the Arabian Sea also conducted Tomahawk cruise missile strikes and otherwise supported the operation. At the same time, Iranian forces, including the country’s air defense capabilities, have been significantly degraded by U.S. and Israeli strikes since then.

Even so, there is still always the possibility of an aircraft going down due to a technical fault or some other issue. Combat search and rescue (CSAR) assets need to be in position, whether they are used or not. CSAR operations are risky and require immense resources themselves. This was put on full display during the race to rescue the crew of an F-15E Strike Eagle that went down in Iran in April, which resulted in the loss of several additional aircraft and helicopters.

On several occasions in the past, TWZ has highlighted the overall limits of conventional standoff strikes against especially deeply buried facilities, including in Iran. This has been a key driver in discussions about the potential for the United States or Israel to conduct ground raids on Iranian nuclear facilities, either to cause more definitive damage inside or to try to extract key assets, like enriched uranium. Any ground operation would pose its own immense challenges and risks, as we have also explored in detail previously.

“Going after the fissile material, I think, is a bigger operation. Again, I think we have the capabilities to do this. Within our Special Operations community, we have people that are trained to do this and have the right relationships and connections and other things to allow us to get in and do that,” retired U.S. Gen. Joseph Votel, who previously served as head of U.S. Central Command (CENTCOM), told TWZ‘s Howard Altman when asked about this in an interview in March. “So you’d have to be able to project that force onto the ground. This would be going to a place like Natanz or Isfahan – probably one of those locations. Those are well inland – several hundred miles into Iran, a country of the same size as the state of Alaska. So it’s big and it’s diverse. It’s largely in an open plain, so you don’t have a lot of natural terrain protection there. That would have to be taken into consideration.”

Getting into sites where Iran has deliberately sealed entry points would require heavy machinery and skilled operators, as well as time to do that work. That, in turn, has impacts on the force protection requirements for an operation that could be expected to last days, if not weeks. These forces would be well within the reach of Iranian artillery, drones and other weapons, as well as ground forces and direct fires. It is also interesting to consider here that if at least some of the entrances to the facilities underneath Pickaxe Mountain are not currently completely sealed off, the raid package could be lighter and the operation faster. In September 2024, Israeli ground forces were notably able to destroy an underground missile factory in Syria after gathering significant amounts of intelligence in an overnight operation. That being said, one would expect a site as sensitive as Pickaxe Mountain to be better defended on the ground, even if the ‘doors are open.’

100 Shaldag soldiers raid and dismantle Syrian missile factory in secret operation

There is a question here of the relative value of strikes on Pickaxe Mountain, especially depending on what U.S. planners think they could reasonably achieve. As noted earlier, exactly what is under the mountain at this point is not clear.

“It remains unclear when it could be operational, based on assessing satellite imagery,” David Albright, President and Founder of the ISIS think tank, wrote in a post on X just yesterday. “Recently, we were told that the site was not attacked in the two previous wars [the 12-Day War in 2025 and operations this year] because nothing of sufficient value was inside it.”

“Perhaps that assessment has changed,” Albright continued. “But just as likely, Trump does not want to leave Iran with a deeply buried nuclear-related site as the regime appears to be sending signals it is starting to rebuild its nuclear weapons capabilities aimed at making nuclear weapons.”

President Trump’s response yesterday to Hugh Hewitt’s specific mention of Pickaxe Mountain does point to there being some degree of concern about this target within the current administration. Trump being so familiar with the site and its weaponeering challenges is particularly notable.

Still, how soon a U.S. strike on Pickaxe Mountain might actually come, if at all, and what that might entail, remains to be seen. Though destroying the facility would be an extremely tall order, there are still other options to make it hard for Iran to make use of it, at least in the near term.

Contact the author: joe@twz.com

London debuts new powers targeting state proxies after accusing Iranian military organisation of engineering anti-Semitic attacks.

The British government is pressing to use new powers allowing it to criminalise state proxies in order to designate Iran’s Islamic Revolutionary Guard Corps (IRGC) as a threat to national security.

In a statement issued on Monday, the government announced that it was submitting draft regulations to the UK Parliament that would ban support for the IRGC. The move follows a series of anti-Semitic attacks in the United Kingdom.

In the statement, the government said the submission of the legislation was part of an attempt to “crack down on foreign state-backed activity in the UK”, noting this would include “espionage, foreign interference in our democracy, sabotage and physical attacks”.

Following the designation, it will be a criminal offence to invite support for or express support for the military organisation, assist them in carrying out UK-related activities, engage in conduct likely to materially assist them, or accept or retain material benefits provided by or on their behalf, according to the report.

Apart from the IRGC, the UK government also listed the Islamic Movement of Companions of the Right (IMCR), an Iran-backed group that claimed seven attacks on Jewish sites in the UK earlier this year, and Russia’s military intelligence agency, the GRU Volunteer Corps, as “the first bodies designated under landmark new state threats powers”.

British police have investigated attacks on Jewish-linked sites in London, including the torching of four ambulances belonging to a community charity in March, as anti-Semitic hate crimes. Three men were charged with arson in April.

“If approved by Parliament later this week, those conducting acts of sabotage including arson on behalf of these groups could face life imprisonment,” the statement added.

Caretaker Prime Minister Keir Starmer said: “These new powers will make it easier to prosecute and lock up anyone carrying out their dirty work here in Britain.”

The new legislation gives the UK government “proscription-like” powers to designate foreign state proxies deemed a threat to the UK’s national security. It will mean that prosecutors do not need to establish a foreign power connection in cases involving designated groups.

“Iran and Russia are using proxies and thugs to do their dirty work on our shores. I have rapidly designated three groups so those working for them will be tracked down and put behind bars,” Home Secretary Shabana Mahmood said.

Reporting from London, Al Jazeera’s Charlie Angela said the designation could come into force “as early as Friday”.

“What that’s going to mean is it will become a criminal offence to support the groups in any way or to help them operate, and that could carry a maximum sentence of life imprisonment,” Angela said.

“Diplomatically, it is going to mark a further deterioration in the relationship between Iran and the UK. Earlier, Foreign Secretary Yvette Cooper summoned the Iranian ambassador to the Foreign Office and questioned him. And that is likely going to get a strong response from Iran.”

The government said the IRGC has “a long history of using proxies and criminal networks to target people overseas – particularly the Jewish community and Iranian dissidents”.

Tehran, ⁠which is still at war with the United States and Israel, has previously denied using proxies.

Regarding the GRU military intelligence service, the government said Russia was using the group “for foreign intelligence collection and hostile covert operations and has a long record of targeting the UK and its allies”.

Tehran, Iran – Three weeks after Iran and the United States signed a memorandum of understanding to extend their ceasefire, their truce remains fragile.

Three tankers have been hit in the Strait of Hormuz over the past two days, even as Iran and the US are expected to restart mediated negotiations to end the war next week, after the funeral of Iran’s Supreme Leader Ayatollah Ali Khamenei.

The US military on Wednesday launched large air attacks on Iran’s southern provinces, which prompted the Islamic Revolutionary Guard Corps (IRGC) and Iran’s regular army to fire missiles and drones on US interests in Bahrain and Kuwait. Both sides accused each other of violating the understanding signed last month.

But even if a long-term resolution is eventually reached and Western sanctions on Iran are lifted, analysts say that it will take time for the country’s economy to recover.

The economy has been strained by years of local mismanagement and corruption; stringent Western and United Nations sanctions; and, more recently, damage sustained from two wars in a year with the US and Israel, deadly nationwide protests in January, and internet shutdowns.

When numbers tell a story

A falling purchasing power has pushed millions into poverty. Inflation has recently climbed to levels not seen since World War II, when Allied forces occupied Iran, took over railways and food supplies, and contributed to a deadly famine.

The latest report by the Statistical Center of Iran for Khordad, the third month of the Persian calendar that ended on June 21, showed inflation increasing by 88.6 percent compared to the same month of the year before. Inflation was up by nearly 6 percent compared to the second month of the current year.

Food inflation was skyrocketing at almost 134 percent in Khordad compared to the corresponding month a year earlier, with oils and fats surging by more than 278 percent, red meat and poultry by over 178 percent, and bread and cereals by nearly 139 percent.

Unemployment is at 7.5 percent during the current calendar year, according to the latest report by the statistical centre released at the end of June. But labour participation is at just 40 percent, meaning that most working-age people are operating outside the official labour force – including students, retirees, those engaged in irregular informal work, and those not seeking paid work.

The job-quality picture is also grim, as salaries are perennially falling behind expenses, as over 38 percent of officially employed people work more than 49 hours a week, and as youth unemployment is at over 20 percent, the centre reports.

The base monthly minimum wage equals only about $95 using the current open market exchange rate of the US dollar in Tehran. The rate has climbed to 1.75 million rials per greenback over recent days, not far from its all-time low of 1.9 million in May.

The damage — and the road to recovery

Due to a heavy budget crunch, the only relief the government is able to offer amounts to a few dollars’ worth of monthly cash subsidy and electronic coupons for purchasing essential goods.

A late June report by the Central Bank of Iran for the previous calendar year that ended on March 20 showed that gross domestic product (GDP) growth for the year stood at minus 0.7 percent, and gross fixed capital formation, a primary indicator of productive capacity and economic growth, was at nearly minus 12 percent. Imports were down 16.6 percent, as were exports by close to 5 percent.

The damage from nearly 40 days of heavy bombardment during the war, the longest nationwide state-imposed internet shutdown in any country, and a US naval blockade of Iran’s southern ports — the full extent of which remains undisclosed to the public — has only exacerbated Iran’s economic woes. The International Monetary Fund has projected that Iran’s real GDP will shrink by 6.1 percent in 2026.

Still, Mahdi Ghodsi, a senior economist at the Vienna Institute for International Economic Studies, said that part of the recent job losses could be recoverable if there is a credible halt to military escalation, restoration of transport and logistics links, more predictable access to energy and fuel, and functioning internet and payment systems.

“In that case, some temporary layoffs in services, retail, transport, construction and small businesses could be reversed relatively quickly, because these activities are highly sensitive to uncertainty and disruptions rather than necessarily destroyed productive capacity,” he told Al Jazeera.

Longer-term challenges

But Ghodsi cautioned that part of the damage is likely to be more persistent.

“Where factories have lost machinery, inventories, imported inputs, workers, working capital, or access to energy, reopening is not simply a matter of returning to normal,” he said, adding that in some cases, full recovery may take years and require large investments, including foreign financing.

Last week, leading satellite imaging provider Planet Labs restored access to imagery for nearly 800 sites across Iran impacted during the war, after lifting earlier restrictions it had placed in response to a US government request to delay or suspend access.

Some Iranians on social media highlighted massive damage done to Iran Electronics Industries (SAIran), a state-owned defence industry heavyweight specialising in optics, communications, semiconductors and medical equipment, among other things.

But along with numerous military-linked sites and assets, and nuclear facilities built over decades now reduced to rubble, Iran’s industrial capacity and civilian infrastructure were also extensively targeted by US and Israeli warplanes and vessels during the war.

Oil and gas facilities, petrochemical and steel giants, electricity outposts, as well as maritime ports, airports, roads, bridges and residential units were significantly damaged.

Work on rebuilding facilities and recovering lost capacities has begun during the period of reduced military hostility over recent weeks, with some airports and industrial units restarting operations.

But a full recovery still appears distant and more destruction could still lay ahead. US President Donald Trump has repeatedly threatened extensive attacks against Iran’s electricity grid and infrastructure like bridges if the war resumes.

Economist Ghodsi said the government’s limited fiscal capacity remains one of the central problems, since the state has already faced struggles in financing not only regular expenditures and salaries, but also obligations across public and semi-public sectors. “This fiscal weakness has been one of the drivers of inflation, as budgetary pressures are partly shifted onto the banking system and the central bank through monetary financing,” he said.

Domestic fissures

Speaking at a state-organised event in Tehran last month, Iran’s President Masoud Pezeshkian expressed concerns about another nationwide protest as public discontent remains high.

“Our most important strength is our unity, and the unity of our people. What I fear is that we fail to serve the people right and they are dissatisfied and come to the streets to protest. Then our might collapses,” he said.

Senior officials spearheading the mediated talks with Washington have backed the process as the viable path to delivering a better economy to the suffering Iranian population.

But hardliners within the system, who perceive Iran to have attained a major victory against superior military powers during the war, continue to vociferously reject giving any concessions.

During Khamenei’s funeral procession in Tehran on Monday, Pezeshkian was filmed getting heckled by anti-deal mourners who demanded blood vengeance for the slain supreme leader and shouted “Death to the compromiser” and “Death to the traitorous homeland-seller”.

Millions of people have attended funeral prayers in Tehran for Iran’s late Supreme Leader Ayatollah Ali Khamenei who was killed in a joint US-Israeli strike on February 28. Aerial video reveals the scale of the crowd.

The latest data from the Statistical Centre of Iran (SCI) shows the Consumer Price Index (CPI) for the period 22 May–21 June 2026 was 88.6% higher than in the corresponding period a year earlier. In practical terms, a household that spent 100 monetary units on the same basket of goods and services a year ago would now need to spend approximately 189 monetary units to purchase that basket.

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Economists attribute the sharp increase in prices to a combination of long-standing structural challenges and more recent pressures. These include weak economic management, persistent fiscal and monetary imbalances, the continued impact of international sanctions, subdued growth prospects, heightened uncertainty in the business environment and widening fiscal deficits. More recently, military conflict and heightened regional tensions have placed further strain on Iran’s economy by increasing investment risks, disrupting economic activity and adding pressure on public finances.

Statistical Centre versus Central Bank figures

Alongside the figures published by the Statistical Centre of Iran (SCI), the Central Bank of Iran (CBI) has reported different inflation estimates. According to the CBI, year-on-year inflation reached 83.1% at the end of the period 22 May–21 June 2026, while the annual inflation rate stood at 57.7%.

These estimates differ from those published by the SCI, which reported an annual inflation rate of 62.0% and a year-on-year inflation rate of 88.6% for the same period.

The gap between the two sets of estimates amounts to 4.3 percentage points for annual inflation and 5.5 percentage points for year-on-year inflation. Such discrepancies are not unusual in Iran and have recurred over recent years.

The differences largely reflect variations in methodology, including the composition of household consumption baskets, the weighting assigned to individual goods and services, and data collection and sampling techniques. Although both institutions seek to measure changes in the general price level, methodological differences can lead to materially different inflation estimates.

Despite these statistical differences, both sets of figures point to the same underlying trend: Iran is experiencing one of its most severe episodes of inflation in decades. Persistently rapid price growth has become a structural feature of the economy rather than a temporary shock.

Inflation accelerates from 52% to nearly 90%

Recent data indicate that inflationary pressures have continued to intensify rather than ease. Year-on-year inflation increased from 52.6% in December 2025 to approximately 68% in February 2026, before rising further to 88.6% for the period 22 May–21 June 2026.

This trajectory suggests that inflationary pressures have become increasingly entrenched, reflecting deeper structural imbalances rather than a temporary or purely monetary phenomenon.

International forecasts also point to a challenging outlook. The International Monetary Fund (IMF) projects that Iran’s annual inflation rate will average around 68.9% in 2026, placing the country among the highest-inflation economies in the world. At the same time, the IMF forecasts a contraction in real GDP of around 6.1%, indicating continued pressure on economic activity.

Short-term price dynamics are also noteworthy. The Consumer Price Index increased by 5.9% over a single month, from 22 April–21 May 2026 to 22 May–21 June 2026 (the periods corresponding to the Iranian months of Ordibehesht and Khordad, respectively).

A monthly increase of this magnitude illustrates the speed at which prices are rising, making it increasingly difficult for households to maintain purchasing power and plan their finances.

Exchange-rate depreciation and inflation

Iran’s inflation surge – one of the most severe experienced by the country since the Second World War – has been closely associated with the sharp depreciation of the rial. Inflation has eroded the currency’s purchasing power, while successive declines in the rial have, in turn, fuelled further inflation by increasing the cost of imports and raising inflation expectations.

At the beginning of the year, the US dollar traded at around 1.35 million rials on Tehran’s open market. Following the start of US and Israeli air strikes against Iran on 28 February, the exchange rate rose to approximately 1.72 million rials per US dollar.

During the conflict, the exchange rate temporarily strengthened to around 1.46 million rials per US dollar as economic and commercial activity slowed, reducing demand for foreign currency. However, after Donald Trump threatened further US air strikes against critical Iranian infrastructure on 7 April, the rial came under renewed pressure, with the exchange rate weakening to around 1.63 million rials per US dollar.

Following the announcement of a ceasefire, the exchange rate recovered to approximately 1.525 million rials per US dollar. However, as economic activity resumed and Iranian officials estimated war-related damage at around US$300 billion, the rial weakened sharply again, with the exchange rate reaching a record 1.9 million rials per US dollar.

The subsequent signing of a memorandum of understanding between Tehran and Washington led to a temporary appreciation of the rial, bringing the exchange rate back to around 1.53 million rials per US dollar. Renewed tensions between Iran and the United States, however, pushed the exchange rate higher once again, approaching 1.7 million rials per US dollar.

These developments illustrate the extent to which exchange-rate movements have become a key transmission channel for inflation in Iran. Fluctuations in the rial affect not only the domestic cost of imported goods and production inputs but also the inflation expectations of households and businesses, reinforcing upward pressure on prices.

An uneven burden

Inflation has not affected all segments of society equally. Official data show that lower-income households have experienced a greater erosion of purchasing power than higher-income groups.

Year-on-year inflation reached 108.1% in rural areas, compared with 85.2% in urban areas. This disparity is particularly significant because lower-income households typically spend a larger share of their income on essential goods and services, especially food, leaving them more exposed to rising prices.

From a distributional perspective, inflation acts as an implicit tax, disproportionately reducing the real incomes of households with the least capacity to save, invest or protect themselves against rising prices.

Food at the centre of the cost-of-living crisis

The steepest price increases have been recorded in categories most closely associated with everyday household spending. Official statistics indicate that food prices have more than doubled compared with the same period a year earlier.

Year-on-year inflation reached 173.8% for tobacco, around 178% for meat, poultry and related products, approximately 152% for milk, cheese and eggs, and around 139% for bread and cereals.

Non-food categories have also recorded substantial price increases. Prices for furniture and household equipment rose by more than 111%, while transport costs increased by over 103%.

These figures suggest that the inflationary shock extends well beyond food prices. Alongside the rising cost of everyday essentials, households are also facing substantially higher costs for household goods and transport, further eroding purchasing power and placing increasing pressure on household budgets.

Wages fall behind the cost of living

One of the clearest consequences of sustained inflation is the widening gap between wages and the cost of meeting basic living expenses.

According to the Iranian Labour News Agency (ILNA), the official minimum monthly wage for the current year was set at 166.255 million rials (approximately €85), while representatives at a meeting of the Supreme Labour Council on 13 March 2026 estimated that a minimum household living basket would cost around 450 million rials (approximately €225) per month.

On this basis, the official minimum wage covers only around 37% of the estimated cost of a basic living basket, leaving a shortfall of approximately 63%.

The figures illustrate how rapid inflation has eroded real wages. Although nominal wages have increased over time, they have failed to keep pace with the rising cost of essential goods and services, placing increasing pressure on household living standards.

More broadly, Iran’s inflation challenge extends beyond rising prices alone. A combination of persistent inflation, currency depreciation and weakening purchasing power has created a self-reinforcing cycle that continues to undermine household finances and economic stability.

Knockout matches begin with South Africa vs Canada as Iran exit, Africa make history and hopes for Messi-Ronaldo final rise.

The knockout stage of the 2026 FIFA World Cup begins on Sunday with South Africa taking on Canada in the first round of 32 tie.

With the group stage complete, the full knockout bracket is now set. Nine African nations have reached the round of 32, Iran were eliminated after Algeria’s late qualification and the draw has left the door open to a Lionel Messi vs Cristiano Ronaldo final.

Here’s the full round of 32 schedule, the South Africa vs Canada prediction and the latest World Cup news:

What is Sunday’s schedule?

• South Africa vs Canada at Los Angeles Stadium, California, in the United States at noon (19:00 GMT).

What are the predictions for South Africa vs Canada?

This will be only the second meeting between South Africa and Canada. The sides’ only previous encounter ended in a 2-0 win for Bafana Bafana in a friendly in Durban in 2007.

Canada, however, will be looking to end another unwanted record. They have lost both of their previous competitive matches against African opposition, falling 2-0 to Cameroon at the 2001 Confederations Cup before a 2-1 defeat to Morocco at the 2022 World Cup in Qatar.

Despite that history, the Opta supercomputer shows Canada as the clear favourites. They won 55 percent of 25,000 pre-match simulations while South Africa triumphed in 20 percent. The remaining 24.9 percent of its calculations ended level after 90 minutes, which would send the tie to extra time and potentially penalties.

Overall, Canada are given a 67.8 percent chance of reaching the quarterfinals, compared with 32.2 percent for South Africa.

When and where will the other knockout matches be played?

Monday

• Brazil vs Japan: (noon/17:00 GMT) at Houston Stadium, Texas, in the US
• Germany vs Paraguay: (4:30pm/20:30 GMT) at Boston Stadium, Massachusetts, in the US
• Netherlands vs Morocco: (7pm/01:00 GMT on Tuesday) at Monterrey Stadium in Mexico

Tuesday

• Ivory Coast vs Norway (noon/17:00 GMT) at Dallas Stadium, Texas, in the US
• France vs Sweden (5pm/21:00 GMT) at New York/New Jersey Stadium in the US
• Mexico vs Ecuador (7pm/02:00 GMT on Wednesday) at Mexico City Stadium in Mexico

Wednesday

• England vs Democratic Republic of the Congo (noon/16:00 GMT) at Atlanta Stadium, Georgia, in the US
• Belgium vs Senegal (1pm/20:00 GMT) at Seattle Stadium in the US state of Washington
• USA vs Bosnia and Herzegovina (5pm/00:00 GMT on Thursday) at San Francisco Bay Area Stadium, California, in the US

Thursday

• Spain vs Austria (noon/19:00 GMT) at Los Angeles Stadium
• Portugal vs Croatia (7pm/23:00 GMT) at Toronto Stadium, Ontario, Canada
• Switzerland vs Algeria (8pm/03:00 GMT on Friday) at BC Place Vancouver, British Columbia, Canada

Friday

• Australia vs Egypt (1pm/18:00 GMT) at Dallas Stadium
• Argentina vs Cape Verde (6pm/22:00 GMT) at Miami Stadium, Florida, in the US
• Colombia vs Ghana (8:30pm/01:30 GMT on Saturday) at Kansas City Stadium, Missouri, in the US

What else is happening?

Is Iran eliminated from the 2026 World Cup?

Yes. Iran have been eliminated from the 2026 FIFA World Cup.

Team Melli’s hopes depended on the final Group J match on Saturday between Austria and Algeria. A draw was the only result that could have knocked Iran out, and the 3-3 score meant that Algeria moved above Iran in the ranking of third-placed teams.

Algeria finished third in Group J on four points, enough to take the final available place among the eight best third-placed teams, which advanced to the round of 32.

Iran, who had been holding the last qualifying spot, were, therefore, eliminated in the group stage.

Africa set a new World Cup record

African teams have enjoyed their best ever men’s World Cup campaign.

A record 10 African nations qualified for the expanded 2026 tournament, and nine have reached the round of 32, the most from the continent in a single World Cup.

Those who qualified are: Algeria, Cape Verde, DR Congo, Egypt, Ghana, Ivory Coast, Morocco, Senegal and South Africa.

Tunisia are the only African side eliminated so far.

The success builds on Africa’s growing influence on the world stage after Morocco’s historic run to the 2022 semifinals. With more nations now consistently challenging football’s traditional powers, the continent is enjoying its strongest World Cup showing yet.

Messi vs Ronaldo final?

A potential knockout clash between superstars Lionel Messi and Cristiano Ronaldo remains a possibility – but only if both captains lead their teams all the way to the World Cup 2026 final.

With the round of 32 bracket now confirmed, Argentina and Portugal are on opposite sides of the draw, ruling out the quarterfinal meeting many fans had anticipated. That means football’s two greatest modern rivals can face each other only if both reach the final on July 19.

The bracket has sparked widespread reaction on social media, where fans have been sharing predictions, memes and hopeful scenarios for one last meeting between the two icons, who are both playing in their sixth World Cup.

Pakistan hosts Iranian President Masoud Pezeshkian after mediating the breakthrough US-Iran negotiations in Switzerland.

Islamabad, Pakistan – Iranian President Masoud Pezeshkian has alanded in Pakistan for a state visit – his first overseas trip since the United States and Israel launched strikes on Iran on February 28.

His Pakistani counterpart Asif Ali Zardari, Prime Minister Shehbaz Sharif, and Deputy Prime Minister and Foreign Minister Ishaq Dar received the Iranian leader at a military base near capital Islamabad on Tuesday.

During his day-long visit, Pezeshkian, who is accompanied by a high-level delegation that includes ministers and senior officials, will hold talks with Sharif, and is also expected to meet with Zardari.

According to Pakistan’s Ministry of Foreign Affairs, Senate Chairman Yousaf Raza Gilani, National Assembly Speaker Ayaz Sadiq, and Deputy Prime Minister and Foreign Minister Ishaq Dar will also call on the Iranian leader.

“During the visit, the two sides will review the full spectrum of bilateral relations and explore new avenues to further deepen cooperation across diverse sectors, including trade, energy, border security, people-to-people exchanges, and regional connectivity,” the ministry said in a statement on Monday.

Pezeshkian’s visit follows the crucial first round of talks between the United States and Iran, mediated by Pakistan and Qatar, in the Swiss city of Bürgenstock to end the war on Iran.

As part of the agreement, the US will release $12bn in frozen Iranian funds. The US has also announced a temporary easing of international sanctions on Iran, allowing it to sell its oil and petrochemicals until August 21. The talks concluded with a 60-day roadmap towards a final deal.

It is Pezeshkian’s second visit to Pakistan as president. His first, in August 2025, came days after the 12-day Iran-Israel war, and was also his first overseas trip following that conflict.

The visit is widely viewed as an expression of gratitude for Pakistan’s role in brokering the Islamabad Memorandum of Understanding, signed on June 18 by US President Donald Trump and Pezeshkian, with Prime Minister Sharif signing the document as a mediator.

The Islamabad MoU launched the formal diplomatic process now under way in Switzerland.

“The visit will also provide an important opportunity to discuss ongoing diplomatic engagements following the signing of the Islamabad Memorandum of Understanding, as well as regional and international developments of mutual interest,” Pakistan’s Ministry of Foreign Affairs said in its statement.

Iran’s terrible, horrible, no good, very bad World Cup got a lot better Sunday.

By playing Belgium to a scoreless draw before another packed house at SoFi Stadium, Iran is in position to win its group with a victory over Egypt on Friday and advance to the knockout stage for the first time.

That would be a just reward for a team that is unbeaten two games into what has been a trying tournament off the field.

Before it even left Iran, the team was forced to move its training camp from Tucson to Tijuana, and more than a dozen members of its delegation were told they would be barred from entering the U.S. The players had their movements in the U.S. severely limited, heard their national anthem jeered twice and generally have been unwelcome as the first qualifiers to play a World Cup game in a country with which they are at war.

And if all that wasn’t bad enough, on Sunday, Iran had a brilliant first-half goal, one that seemingly had given it its first lead of the tournament, erased on a video replay that confirmed the narrowest of offside violations.

The disallowed goal, one of the best any team has scored in this World Cup, came on a set piece in the 25th minute. Iranian captain Ehsan Hajsafi took the free kick from about 35 yards, but instead of going to the goal, he pushed the ball through the Belgium wall to Mehdi Taremi, who took a clean first touch, then put a left-footed ball between Belgian keeper Thibaut Courtois and the left post.

Iranian soccer fans hold a pre-revolutionary Iranian flag following the team’s scoreless draw with Belgium in the World Cup at SoFi Stadium on Sunday.

(Robert Gauthier / Los Angeles Times)

The play caught Belgium completely by surprise, and for one of the few times in this tournament, Iran had reason to cheer. But the celebration was short-lived when referee Dario Herrera took the goal away after a lengthy video review determined Taremi to be offside.

That was the best thing that went right for Belgium in a first half it dominated, only to come up empty. It had an 11-2 edge in shots, completed six times as many passes and controlled the ball for more than 36 of the first 45 minutes. But it couldn’t get the ball past Iranian keeper Alireza Beiranvand.

If the World Cup has been trying for Iran, it’s been frustrating for Belgium, which needed an own goal from Egypt’s Mohamed Hany to escape with a draw in its opener. And a smothering Iranian defense that frequently packed seven players in the box added to that frustration Sunday.

Belgium forward Romelu Lukaku, left, and Iran defender Shojae Khalilzadeh battle for the ball in the second half of a World Cup match at SoFi Stadium on Sunday.

(Robert Gauthier / Los Angeles Times)

That allowed Iran to get the first dangerous chance of the second half — and it also came off a set piece — with Taremi banging a clean volley on target from the center of the box. But Courtois stood his ground and made the save.

The game took a turn in the 62nd minute when Belgium’s Nathan Ngoy mishit a weak backpass, sending Taremi on a breakaway with only Courtois to beat. When Ngoy reached out and grabbed the Iranian by the shirt, pulling him to the ground, he drew a red card, leaving Belgium to play the final half-hour down a man.

Iran clearly deserved a better fate after absorbing wave after wave of a withering Belgium attack without breaking. It also was quicker and far more creative on offense, though it had nothing to show for that.

For Belgium, still looking for its first goal of the tournament, the result was another strain on an aging golden generation of players. If they don’t beat New Zealand in their final group-stage game Friday, they’ll leave the World Cup after the first round for a second straight time.