Streets across Iran remain volatile as the government fails to offer a meaningful response to public grievances.
What began as anger over a collapsing economy has snowballed into broader unrest that mixes economic despair with political frustration and public defiance of state authority.
The government has introduced measures such as cash handouts and leadership changes to ease pressure, but these moves have so far failed to quell the unrest. Meanwhile, supreme leader Ayatollah Ali Khamenei has issued a stark warning to “rioters”, as public statements from US and Israeli leaders have fed into Tehran’s narrative of external interference.
With hopes of reviving Iran‑US talks over sanctions fading, economic pressure in the Islamic Republic has reached a breaking point, spilling into a test of survival as no solution appears in sight.
The first signs of public resentment emerged in late December within the narrow aisles of the Grand Bazaar. Traders and merchants in Tehran’s commercial hub closed their shops and took to the streets in protest. Merchants, traditionally a bellwether of Iranian economic sentiment, framed their action as an urgent plea to stabilise exchange rates and curb price hikes of essentials after the Iranian rial lost 7 per cent of its value overnight − declining to a record low of 1.45 million rials to $1.
While the rial crash was the trigger, experts point to a polycrisis − an accumulation of anger over corruption, a 42% inflation rate, water and electricity outages and pollution.
Hadi Mohammadi, an Iran affairs analyst, says the rial was the final straw. “This currency collapse was not a sudden anomaly but the culmination of prolonged pressures like snapback sanctions, which reduced oil revenue, as well as the Israel-Iran war in June last year, and chronic economic mismanagement,” he told The National.
Iran has long downplayed the impact of sanctions, portraying them as a “blessing in disguise” that forces self-sufficiency. That argument has held some weight in the military sphere, where years of isolation pushed Tehran to develop indigenous missiles and drones.
But the collapse of the 2015 nuclear deal with world powers last year revived sweeping UN sanctions, further choking oil exports and blocked access to foreign assets. “The impacts of snapback were not just theoretical. They materialised on the ground,” Mr Mohammadi said. “The sudden jump in the exchange rate showed how vulnerable the economy had become.”
Further frustrating crowds
Since the activation of the UN sanctions last September, the rial has lost more than one-third of its value − something that has strained purchasing power and led to an unpredictable economy.
The government called for dialogue with protesters and says it acknowledges “legitimate demands” and economic hardships, but on the streets, demonstrators face tear gas, arrests and reports of live ammunition.
On the economic front, President Masoud Pezeshkian has rolled out monthly subsidies amounting to the equivalent of less than $7 per family member to alleviate strained purchasing power. However, analysts regard the move as a sticking plaster on a bullet wound, given the structural economic challenges.
“Iran’s economy lacks a stable balance due to chronic inflation. In such conditions, paying 10 million rials per person may have a short-term impact, but if prices rise again, its effectiveness will quickly disappear,” said Mostafa Sharif, an economist at Allameh Tabatabai University, in Tehran.
After a brief recovery, the rial returned to pre-protest levels in the open market. On Tuesday, it slid to a fresh record low of 1.48 million to the dollar. Hours later, food prices spiked by another 60 per cent, triggering panic buying of staples like cooking oil. The surge sparked fresh waves of protests across the country.
In Tehran, Grand Bazaar merchants staged sit-ins and clashed with security forces.
As resentment persists amid perceived government inaction, President Pezeshkian acknowledged the limits of his authority, saying that “the government’s options are constrained due to sanctions and limited resources”, further frustrating the protesting crowd.
Experts, however, argue that sanctions are only part of the story. Ruhollah Modabber, an economist and political analyst, told The National that Mr Pezeshkian had relied too heavily on western dialogue and the hope of sanctions relief.
“Pinning all hopes on external negotiations has left domestic economic issues unaddressed. The current crisis is as much about mismanagement and weak policy frameworks as it is about sanctions,” he said.
'No Gaza, No Lebanon'
While economy-focused slogans resonate with protesting traders, the unrest has increasingly absorbed political grievances as well. Chants such as “No Gaza, No Lebanon, my life for Iran” could be heard on the streets, reflecting a belief among some protesters that Iran’s regional posture and external commitments come at the expense of domestic welfare.
“When economic grievances remain unresolved, protests tend to cross into political territory,” Mr Mohammadi explained.
What began largely as peaceful marches has in some areas tipped into violent confrontation, with clashes between protesters and security forces leading to deaths and injuries. Western provinces such as Ilam and Lorestan have emerged as hotspots of violence, with multiple fatalities as security forces reportedly used live ammunition against demonstrators.
In one incident, security personnel stormed a hospital in Ilam, where wounded protesters were reportedly being treated. Iranian authorities acknowledged the incident but said reports were exaggerated.
Iran’s leadership has drawn a clear distinction between economic protest and unrest it deems unlawful, and Tehran has seized on sharp public comments from abroad to reinforce its narrative that external actors are trying to exploit domestic turmoil.
US President Donald Trump warned Iran that if Tehran “kills peaceful protesters”, the US “will come to their rescue” and that Tehran would be “hit very hard” if demonstrators are killed. Former US secretary of state Mike Pompeo added to tensions with social media posts suggesting that Israeli intelligence was operating inside Iran alongside protesters.
Alarm in Tehran rose further after US strikes on Venezuela and the capture of President Nicolas Maduro on Saturday. This has fuelled speculation that similar action could be attempted in Iran during the protests.
However, analysts believe this is far-fetched.
“Iran is different from Venezuela. Domestic pressures drive the protests far more than foreign threats,” Mr Modabber argued, saying scenarios of direct intervention are largely psychological. “Given Iran’s multi-layered defence and the potential regional consequences of any US intervention, a similar attempt in Iran is not realistic.”
Experts see a mix of possible outcomes from this protest wave. Unlike the 2022 Mahsa Amini protests, which ended after a brief period and focused on women’s rights, the current unrest affects all groups and centres on livelihoods, economic distress and governance, making its scope broader.
Mr Modabber sees the protests as primarily economic and preventable. “If the economy stabilises and people’s livelihoods improve, the protests are likely to subside,” he said.
Others perceive a deeper political dimension. Mr Mohammadi said some protesters are motivated by opportunistic or political aims, exploiting economic hardship to pressure the government.
“The unrest today reflects layers of frustration. How the authorities respond will determine whether it fizzles, recurs, or evolves into something more lasting,” he said.
