Heightened US sanctions and disruptions to trade, shipping, and fuel supplies have placed Iran's economy under considerable strain. President Masoud Pezeshkian has stated that US sanctions and a naval blockade are placing pressure on trade, fuel supplies, and the broader economy, making the country's financial difficulties harder to downplay.

Pezeshkian reported that trade volumes — both inbound and outbound — had dropped by 25 to 35 percent over the preceding months. The remarks follow Iran's assertion, made earlier this week, that US-imposed sanctions would fall short of their intended goals.

At the same time, Washington has broadened its sanctions programme, directing measures at Iran's oil and financial flows while pressing nations and businesses that maintain commercial ties with the country to alter their conduct. Scott Bessent outlined a broad plan to restrict Iran's access to financial networks, petroleum revenues, and other funding streams. The United States has put foreign businesses and governments on notice that maintaining substantial commercial ties with Iran could leave them liable to secondary sanctions.

Sanctions were broadened to cover foreign entities, among them organisations connected to Iran's petroleum and financial sectors. Banking institutions in nations that trade with Iran have grown increasingly uneasy following the introduction of the new restrictions. The initiative aims to restrict Iran's ability to circumvent economic penalties through foreign companies, financial institutions, and trade networks.

Pezeshkian attributed a notable contraction in Iran's external trade to the escalation of hostilities, pointing to American sanctions and restrictions on Iranian port access. Iran's cross-border trade activity has shown signs of disruption as a result of the measures being implemented.

Reduced commerce has weighed on multiple sectors of Iran's national economy. Declining export volumes diminish the inflow of foreign exchange earnings, while curbs on imported goods constrain the availability of fuel and essential supplies.

Mounting fiscal strain has left the government weighing policy options, among them a potential adjustment to heavily subsidised fuel prices at a time when rising inflation is eroding household purchasing power. The government is weighing a further rise in petrol prices amid mounting pressure from fuel supply constraints and subsidy expenditure. Prior to the most recent round of sanctions, authorities had been laying the groundwork for a public expectation of rising fuel costs.

The country offers its citizens heavily discounted fuel, a policy whose fiscal burden has grown amid ongoing economic pressures. Pezeshkian has put forward a proposal to increase the cost of fuel under the nation's third-tier quota allocation, calling for the relevant price to be adjusted upward. He noted that prices had risen, citing an increase from 5,000 tomans to 10,000 tomans as an illustration.

The policy adjustment may allow authorities to better regulate energy consumption while easing the fiscal strain associated with subsidy expenditure. Elevated fuel costs may place upward pressure on freight and logistics expenses, adding to broader price increases at a time when consumer budgets are already under strain.

Figures released in July placed Iran's yearly inflation rate at 66 percent, a level that has intensified financial strain on both households and businesses. Rising prices have ranked among the foremost economic pressures facing Iran in recent years, with ongoing conflict and international sanctions adding pressure to an economy already facing deep-rooted difficulties.

Authorities face calls to stabilise prices, protect jobs, bolster local industry, and ensure the availability of essential goods. Elevated fuel costs would add further pressure to those efforts. Fuel costs run through the entire supply chain, so a rise in petrol prices has the potential to push up what consumers pay for food and other household goods.

Pezeshkian's recent remarks represent a shift in his rhetorical approach. The president stated that the newly imposed penalties would fall short of their intended goals, adding that Tehran would maintain its position against external pressure from Washington. Pezeshkian directly addressed the economic toll of sanctions in comments to state television, stating that those who believe the measures have no effect leave him without a response, and describing the current situation as wartime conditions that the country must be prepared to endure.

Tehran has reiterated that negotiations remain a viable path forward, while asserting its right to self-defence and the protection of its national interests. The country's governing authorities have treated economic stability as a priority alongside their military and diplomatic efforts in response to the conflict.

Tehran's economy is under mounting strain as additional sanctions from the United States take hold alongside the ongoing conflict. Iran faces the task of securing energy supplies, managing price pressures, and sustaining commerce while navigating constraints on shipping and access to international financial systems.

Mediation efforts by Qatar and Pakistan are ongoing as both nations work to reopen channels of communication between Tehran and Washington, with the Strait of Hormuz continuing to stand as a disputed flashpoint in relations between the two countries. Pezeshkian's remarks point to the toll that financial restrictions imposed by Washington have taken on Iran's economy, as the country contends with inflation, fuel supply disruptions, and declining trade.