Foreign trade falls 35% as Tehran weighs economic survival against defiance amid sanctions and the prolonged Hormuz standoff.
Image: The Economic Times
Iran’s foreign trade has dropped by 35% as the country struggles with the economic fallout of the prolonged war and intensifying US sanctions, putting growing pressure on Tehran to balance economic survival with its policy of defiance.
President Masoud Pezeshkian has acknowledged the sharp contraction in trade, while Iran’s inflation rate has climbed to a record 66%, underscoring the mounting economic strain facing the country.
The Trump administration has stepped up its campaign of economic pressure, imposing new sanctions on Iran-linked entities and threatening secondary sanctions against countries and institutions that continue doing business with Tehran.
The economic pressure has been compounded by the standoff over the Strait of Hormuz, a vital global energy corridor. Maritime traffic through the waterway has fallen sharply amid conflicting claims over its status and control.
Tehran has continued to insist on maintaining leverage over the strait while simultaneously seeking ways to limit the damage caused by sanctions, including boosting domestic production, reducing reliance on the US dollar and pursuing alternative trade channels.
Iranian officials have also signalled openness to diplomacy, but negotiations with Washington remain stalled as both sides continue to disagree over sanctions relief, the blockade of Iranian ports and arrangements for shipping through Hormuz.
With the economic cost of the conflict mounting, Iran’s leadership faces an increasingly difficult choice between maintaining its strategic position and taking steps that could ease pressure on an economy already weakened by war and sanctions.
