Iran's president admits US sanctions are damaging economy

Iran's President Masoud Pezeshkian has admitted that US sanctions are damaging the country's economy, days after insisting they would have no effect.

Speaking to state television on Friday, he said Iran's exports and imports have fallen by 25 to 35 percent in recent months as Washington maintains a naval blockade of Iranian ports.

What is the effect of sanctions on Iran?

US sanctions have sharply reduced Iran's trade, with exports and imports down between 25 and 35 percent in recent months. A US naval blockade of Iranian ports has also disrupted fuel imports, contributing to domestic shortages and pushing officials to consider raising the price of subsidised petrol.

Why did Pezeshkian say Iran is in a war situation?

In the same interview, Pezeshkian rejected claims that sanctions were having no impact. "Some say sanctions have no effect at all; to those people, I really don't know what to say," he said. He added that Iran was in "a war situation" and that the country "must accept these wartime conditions."

What are the new US sanctions on Iran?

On Monday, US Treasury Secretary Scott Bessent outlined plans for the "economic asphyxiation" of Iran, warning of serious consequences for any country that refuses to join the American campaign.

The measures build on a sanctions regime that the United States and its allies have maintained since 2018, when President Donald Trump withdrew from the international nuclear deal with Tehran.

Why does Iran want to raise petrol prices?

Pezeshkian said petrol prices should rise to reflect the fall in trade, proposing an increase in the "third-tier quota... For example, from 5,000 tomans to 10,000 tomans." The quota is one of several consumption tiers used to set the price Iranian consumers pay for fuel. Iran is a major oil producer that has long subsidised petrol heavily, making any price change politically sensitive.

Vice President Mohammad Jafar Ghaempanah said on Wednesday that the US blockade had stopped Iran importing enough petrol to cover a shortfall in domestic production.

Is Pezeshkian still defiant despite the sanctions impact?

Despite acknowledging the economic strain, Pezeshkian maintained on Wednesday that the latest US sanctions "will not achieve anything." He told state media that Iran would "stand firm against economic pressures, as we have done so far and will continue to do."