Iranian President Masoud Pezeshkian and Supreme Leader Ayatollah Mojtaba Khamenei acknowledged on Saturday that the ongoing war with the U.S. and Israel has caused economic hardship. The president stated that U.S. sanctions and a naval blockade have led to a nearly 35% decrease in Iran's foreign trade, while the Supreme Leader issued a written statement urging the government to address challenges including high inflation and unemployment.
The conflict, which the source says began six months ago following a February 28 attack, has reached a diplomatic impasse as the administration of President Donald Trump intensifies financial penalties. On Saturday, the U.S. Treasury Department announced new sanctions targeting Egypt’s Banque Misr, alleging the bank conducted business with Tehran through its United Arab Emirates unit. The proposed measure seeks to cut off the UAE branches from U.S. dollar transactions.
The Treasury also issued sanctions against a Hong Kong-based entity and an individual linked to Iran's Bank Melli. While Washington has warned other nations to sever trade ties with Iran, it has not yet imposed secondary sanctions on major trade partners like India and China. In response to the economic strain, President Pezeshkian called for a revival of a June 17 memorandum of understanding that briefly allowed Iranian oil sales before disagreements over the Strait of Hormuz led to its collapse.
The scale of the financial pressure is underscored by the U.S. Treasury’s targeting of international financial institutions like Banque Misr. By proposing to block the bank's UAE branches from dollar transactions, the U.S. is signaling that foreign banks doing business with Iran may lose access to the global dollar-clearing system. This move forces international businesses and Egyptian expatriates using those specific branches to navigate potential disruptions in how they transfer or receive funds.
What happens next depends on the status of the Strait of Hormuz and potential diplomatic mediation by Qatar and Pakistan. While U.S. military commanders state they have cleared mines from the waterway, which previously carried 20% of global oil and liquefied natural gas, the Islamic Revolutionary Guard Corps maintains the strait is closed to unauthorized ships. Further diplomatic talks follow a Thursday meeting between Qatari officials and Iranian leaders in Tehran, though no specific date for a new formal negotiation has been set.