Mohan Sinha
31 Aug 2026

DUBAI/CAIRO: Iranian leaders are increasingly warning about the serious economic damage caused by the six-month war with the United States, as the country faces high inflation, falling trade and tougher American sanctions.

Supreme Leader Mojtaba Khamenei has called on the government to take action to ease the economic hardship. President Masoud Pezeshkian said Iran's foreign trade had fallen by about 35 percent because of U.S. sanctions and a naval blockade of Iranian ports.

The warnings came as other Iranian officials continued to threaten military retaliation against Washington. Tehran has also insisted that its navy controls the Strait of Hormuz, a vital waterway through which much of the world's oil and energy supplies normally pass.

The war has now reached its six-month mark, while negotiations between Iran and the United States remain stalled. At the same time, U.S. President Donald Trump's administration has stepped up financial pressure on Tehran through what it has called an "economic D-Day".

Washington has warned countries that continue trading with Iran that they could face secondary sanctions. However, the U.S. Treasury has avoided imposing penalties on major Iranian trading partners such as China and India, as such measures could also damage the US and global economies.

The Treasury has imposed sanctions on Egypt's Banque Misr over its dealings with Iran and proposed restrictions that could limit the bank's UAE branches from carrying out US dollar transactions.

Egypt's central bank said it and the foreign ministry were in contact with US officials. It said the measure would apply only to Banque Misr UAE's dollar transactions with correspondent banks.

The U.S. Treasury also announced sanctions against a Hong Kong-based entity and an individual linked to Iran's Bank Melli.

The sanctions have added to the economic pressure created by the war. Iran's annual inflation rate reached 66 percent in July, increasing the burden on households.

Mojtaba Khamenei has not appeared publicly since being injured in the February 28 attack that killed his father, former Supreme Leader Ali Khamenei. In a written statement, he called for stronger government action to tackle economic problems. "There is the need to seriously address the chain of economic and livelihood challenges, such as inflation, unemployment, management of prices and the market for goods and services," he said.

Pezeshkian said Iranian exports and imports had both dropped by nearly 35 percent. However, he said Iran sold about 90 million barrels of oil during a short period in June when a memorandum with the U.S. temporarily allowed Iranian oil exports.

Other countries are trying to revive diplomatic efforts to end the conflict. Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani visited Tehran on August 27 and stressed the need to restore normal shipping through the Strait of Hormuz.

Iranian Foreign Minister Abbas Araqchi described the talks as "creative".

Qatar and Pakistan helped broker the June agreement that led to a brief ceasefire, but disagreements over the strait later caused it to collapse.

The Strait of Hormuz remains disputed. U.S. military commanders say American forces cleared sea mines placed by Iran's Revolutionary Guard. Trump has said the waterway is open, while the Revolutionary Guard Navy has rejected that claim and insisted that ships require Iranian permission to pass.

Shipping data showed that only seven commodity vessels crossed the strait on August 27, down from 17 the previous day and below the 10-day average of 15.