Iranian leaders are acknowledging the economic toll of war with the United States, with the supreme leader calling on the government to address the hardship while the president reported foreign trade has shrunk 35% due to the American sanctions and blockade. The warnings came even as other leaders threaten the US with military retaliation and declarations that the Iranian navy maintains control of the Strait of Hormuz, the strategic waterway giving Iran leverage through its ability to disrupt global energy markets.
With the war now at the six-month mark, and negotiations at an impasse, President Donald Trump's administration has stepped up efforts to punish Iran financially with what it has billed as an economic D-Day. Washington has warned countries to cut their business ties with Iran or face secondary sanctions, though the Treasury Department stopped short of imposing penalties against major Iranian trade partners such as China and India.
The US Treasury Department did impose sanctions on Egypt's Banque Misr for doing business with Tehran, proposing a rule that would cut off the bank's branches in the United Arab Emirates from dollar transactions. Egypt's central bank said it and the foreign ministry were in contact with US officials concerning the matter, adding the measure was limited to Banque Misr UAE's US dollar transactions with correspondent banks only.
The sanctions drive compounds the toll of the war on Iran's economy, where annual inflation hit 66% last month. Supreme Leader Ayatollah Mojtaba Khamenei called on the government to tackle the economic hardship, while Iranian President Masoud Pezeshkian told state media that Iranian exports and imports slumped nearly 35% because of US sanctions and a naval blockade.