Iran Unveils New Economic Strategy to Shield Citizens From US Pressure as War Losses Mount

Iran's government has launched a fresh coordinated push to soften the economic blow inflicted on its citizens by the ongoing US-Israeli war and the tightening American blockade, with President Masoud Pezeshkian personally overseeing what officials describe as a comprehensive new arrangement.

The initiative emerged from a high-level meeting at which the country's Plan and Budget Organisation presented a seven-point package designed to manage the crisis. While the full contents of that proposal remain undisclosed, Iran's semi-official Tasnim news agency reported that it was intended to help the country "overcome the challenges ahead in a more orderly and less costly manner."

Pezeshkian followed up the session by ordering the creation of a committee tasked with coordinating the new economic framework. The body brings together Central Bank Governor Abdolnaser Hemmati, Interior Minister Eskandar Momeni and Tehran's conservative mayor Alireza Zakani. According to state broadcaster IRNA, the committee's central mission is to stabilise prices across the country.

The president framed the effort in stark terms, saying on social media that "the enemy's plan in recent months has been to cut off the country's vital arteries with the aim of pressuring the noble people of Iran." That statement underscores Tehran's view that the economic measures are as much a tool of warfare as the military campaign itself.

The pressure has been building since the conflict began on February 28, when US and Israeli strikes killed senior Iranian political and military figures. Bombing since then has caused an estimated 270 billion dollars in damage to the country, according to Iranian figures. The economic picture darkened further in late August when Washington launched Operation Economic Outcast, an effort to sever Iran entirely from international trade.

The cumulative effect has been severe. Iran's gross domestic product has contracted by 10 percent, driven largely by the collapse in energy exports caused by the US naval blockade. The Iranian rial has tumbled to record lows, eroding household purchasing power and deepening public anxiety about the future.

Ordinary Iranians are feeling the squeeze most acutely at the market and the dinner table. Maryam Ashrafi of the Bourse and Bazaar Foundation, a London-based think tank, told Al Jazeera that consumers now face sharply higher food prices and are "increasingly turn[ing] to cheaper, inferior goods" as they try to cope. Shortages of raw materials used to produce staples such as margarine have also pushed prices upward, she added.

The blockade on Iran's southern ports has disrupted the import of wheat and grains, a cornerstone of the national diet. Ashrafi noted that the large bulk carriers that normally serve those routes can carry more than 80,000 tonnes of agricultural commodities at a time. Alternative routes through Caspian Sea ports, which fall outside the embargo, handle vessels carrying only around 7,200 tonnes, while trucks moving overland are limited to roughly 20 tonnes per vehicle.

Those constraints ripple through the wider economy. Rising packaging costs have created supply-chain disruptions for businesses, and insurance premiums have climbed, even though war-related losses are generally excluded from coverage. The result is a business environment in which planning ahead has become increasingly difficult.

Healthcare is emerging as another pressure point. Although medicines themselves are not sanctioned, the raw materials Iran's pharmaceutical industry relies on have become "increasingly difficult and expensive" to obtain, Ashrafi said. Restrictions on Iranian airlines stemming from US sanctions have compounded the problem by disrupting air travel, feeding fears of medicine shortages across the country.

On the political front, Pezeshkian told members of parliament on Monday that economic policy should prioritise the most vulnerable groups in society, singling out female-led households as a particular concern. His remarks signal an awareness that the crisis is not felt evenly and that the government's legitimacy may hinge on protecting those least able to absorb further shocks.

Energy efficiency has emerged as one pillar of the response. The president said his administration is working to guarantee that "under no circumstances are electricity and energy supplies to producers and businesses cut off." Despite Iran's status as a major oil and gas producer, the war has brought petrol shortages and power cuts, exposing vulnerabilities in domestic distribution and infrastructure.

Pezeshkian also called for the implementation of "car-free Tuesdays," urging citizens to leave their vehicles at home to conserve fuel. He extended the appeal to state employees, encouraging them to adopt the practice as a way of building broader public engagement with the conservation drive.

The Strait of Hormuz remains central to Iran's diplomatic and economic calculus. Tehran has made the lifting of the US naval blockade a key condition in negotiations over reopening the waterway, which it says will remain closed until Washington meets its demands. Control over the strait gives Iran significant leverage, but the continued closure also perpetuates the trade isolation that is strangling its economy.

For now, the government's response amounts to a mixture of emergency relief, price stabilisation and energy conservation, all coordinated through a committee that answers to the president. Whether these measures can meaningfully cushion Iranian households will depend on factors largely outside Tehran's control: the duration of the blockade, the trajectory of the war and the willingness of the United States to negotiate.