Iranian President Masoud Pezeshkian has acknowledged that crippling U.S. sanctions are having a significant negative impact on Tehran's economy, describing the situation as a "war situation" that necessitates accepting "wartime conditions." His comments, made in an interview with state media, contradict earlier assertions that the sanctions would have little effect.
"Some say sanctions have no effect at all; to those people, I really don’t know what to say," Pezeshkian stated Friday, according to AFP. "We are in a war situation, and we must accept these wartime conditions."
The U.S. Treasury Department recently unveiled "Operation Economic Outcast," an initiative aimed at intensifying sanctions against Iran, which President Trump characterized as an "economic D-Day." The administration's strategy involves pressuring secondary countries to cease oil, energy, and business dealings with Tehran, thereby choking off revenue streams to the Iranian regime.
As part of this operation, the Treasury imposed sanctions on Egypt's Banque Misr for conducting business with Tehran, proposing a rule that would restrict its United Arab Emirates branches from dollar transactions. Egypt's central bank stated it is reviewing the notice concerning Banque Misr UAE's U.S. dollar transactions.
Pezeshkian also reported that Iran's exports and imports have decreased by 25% to 35% since the U.S. initiated a naval blockade of Iranian ports approximately six months ago. He noted that Tehran has only managed to sell 90 million barrels of oil, its primary export, under a short-lived memorandum of understanding with the U.S. that included a 60-day ceasefire. To offset substantial losses, Pezeshkian suggested increasing, and in some cases doubling, petrol prices.
Meanwhile, Supreme Leader Ayatollah Mojtaba Khamenei urged the government to address economic challenges, including an annual inflation rate that reached 66% last month. According to a written statement attributed to the supreme leader, there is a "need to seriously address the chain of economic and livelihood challenges, such as inflation, unemployment, management of prices and the market for goods and services."
Despite the economic pressures, the Iranian government has pledged to maintain its stance against the U.S. and focus on curbing inflation, creating jobs, and investing in domestic production.
In contrast to Iran's economic struggles, U.S. Central Command reported that U.S. forces have facilitated the safe transit of nearly 1,500 commercial vessels through the Strait of Hormuz, allowing approximately 750 million barrels of crude oil to pass. U.S. Navy sailors work on the flight deck of the aircraft carrier USS George Washington on Thursday, August 20, 2026, in the Arabian Sea. The vessel was transiting the area to support U.S. military operations in the war with Iran.