For many Iranians, the new US sanctions campaign, called Operation Economic Outcast, seems superfluous given the grim economic situation in their country. Iranians are facing runaway food inflation, closed petrol stations and a seemingly never-ending depreciation of the nation’s currency caused by a lack of foreign exchange reserves. Vegetable oil in Iran in August cost 383% more than a year ago.
The price of eggs rose by 294%, chicken by 177% and red meat by 148%. The cratering economy leaves the country’s political class on edge as they try to prevent economic conditions leading to social chaos. In truth, long before Donald Trump’s latest sanctions push, Iran’s economy had become a parallel battlefield in which the country’s economic commanders were struggling to maintain control.
On 23 August, the US dollar reached roughly 2m rials on Iran’s open market, a new record. Three days later, Iran’s statistical centre announced that year-on-year inflation in August reached 84.4%; the rolling annual average rate was about 65%. As purchasing power in Iran collapses, households are buying fewer goods.
Diets are changing, clothes are being patched up and repaired rather than replaced, and medicine is in short supply, though it can be found on the hidden market. According to the Mehr news agency, demand for red meat fell by 50% in April 2026 compared with the same period last year. There has also been a leap in the consumption of potatoes, leading to shortages.
Basic goods like eggs are now unaffordable to middle- and working-class families, Golshan Fathi, an Iranian feminist, recently said. Long lines of cars stretched through parts of Tehran and the north-eastern Iranian city of Mashhad on Tuesday and Wednesday as motorists queued for fuel, with some lines blocking entire streets. Many petrol stations, including some of the largest, were closed.
Officials blamed isolated panic buying caused by rumours of a government-planned price increase, or Israeli bombs that destroyed two of Tehran’s three main oil depots. Inside the government, anxious discussions have been under way for weeks about increasing the price of oil to reduce costly subsidies, but the political class know from past experience that there could be significant pushback. A sudden overnight petrol price rise of 50% in November 2019 sparked week-long violent protests.
Extract — continue reading at the source.
