Nationwide protests erupted across Iran following a dramatic collapse of the national currency, triggered by economic sanctions imposed by the United States
The unrest began on December 28, 2025, when shopkeepers in Tehran closed their businesses and took to the streets after the Iranian rial plunged to a historic low against the US dollar.
The demonstrations rapidly spread to other provinces as soaring inflation and rising food prices strained households already grappling with economic hardship.
Authorities under Supreme Leader Ayatollah Ali Khamenei responded with force, with rights groups alleging thousands of protesters were killed during the crackdown, including children.
Economists attribute the sharp decline of the rial to a US strategy aimed at restricting Iran’s access to foreign currency, particularly US dollars.
According to Mohammad Reza Farzanegan of Philipps University of Marburg, sanctions targeting Iran’s oil exports and international banking channels severely reduced the country’s foreign exchange inflows.
The United States intensified pressure through secondary sanctions, discouraging global businesses and financial institutions from conducting transactions with Iran.
These measures effectively limited Iran’s ability to access overseas reserves and disrupted international trade, exacerbating the currency crisis.
Speaking at recent congressional hearings, US Treasury Secretary Scott Bessent acknowledged Washington’s deliberate economic pressure. He stated that creating a dollar shortage contributed to Iran’s financial collapse, which he claimed fueled public dissatisfaction and protests.
Similar remarks were made during discussions at the World Economic Forum, where Bessent described sanctions as part of broader economic statecraft.
The strategy builds upon policies introduced by Donald Trump, who withdrew the United States from the Joint Comprehensive Plan of Action during his first presidency.
Since returning to office, Trump has expanded sanctions targeting Iran’s oil infrastructure and threatened tariffs on countries maintaining trade ties with Tehran.
The economic consequences for Iranian citizens have been severe. By early 2026, the rial had depreciated to approximately 1.5 million to the dollar, compared to roughly 700,000 a year earlier.
Inflation surged, with food prices rising by more than 70 percent annually, significantly eroding purchasing power and shrinking the country’s middle class.
Experts warn that sanctions not only restrict industrial imports but also complicate humanitarian trade. Farzanegan told Al Jazeera that even medical and food imports face challenges when banking systems collapse under financial restrictions.
Despite the pressure, analysts remain divided over whether economic sanctions alone can force political transformation.
Legal scholar Bruce Fein argues that sanctions rarely topple governments without military intervention, suggesting economic hardship may instead weaken civilian resistance as survival becomes the primary concern.
Meanwhile, tensions remain high as diplomatic talks continue between Washington and Tehran. The United States seeks limits on Iran’s nuclear programme, missile development and support for regional armed groups, while Iran continues to rely on internal mechanisms to bypass sanctions.
As protests persist and economic instability deepens, Iran’s crisis highlights the complex interplay between global economic policies, domestic governance challenges and the human cost of geopolitical conflict.