Iran’s clerical leadership is grappling with a worsening economic crisis and growing public discontent, prompting cautious discussions about re-engaging with the United States on a nuclear deal. Despite deep mistrust of U.S. President Donald Trump, Tehran is reportedly considering negotiations to ease crippling sanctions, which have driven the country’s economy to its most fragile state since the Iran-Iraq war.
President Masoud Pezeshkian has highlighted the severity of the economic situation, exacerbated by Trump’s “maximum pressure” campaign targeting Iran’s oil exports. The sanctions have led to soaring inflation, a collapsing currency, and widespread poverty, with nearly half of the population now living below the poverty line.
Public anger is simmering, with over 200 demonstrations reported in February alone, as citizens protest low wages, unpaid salaries, and skyrocketing living costs. Officials fear that further economic strain could ignite mass unrest, reminiscent of the 2019 fuel price protests and the 2022-2023 demonstrations over Mahsa Amini’s death in custody.
While Supreme Leader Ayatollah Ali Khamenei has rejected Trump’s overtures for nuclear talks, citing excessive demands, some Iranian officials acknowledge the need for a deal to stabilize the economy. However, Tehran remains firm on preserving its nuclear energy program and missile capabilities, viewing concessions under pressure as a sign of weakness.
Iran’s economy has been partially sustained by oil exports to China, but uncertainty looms over their sustainability amid escalating U.S. sanctions. The situation is further compounded by energy and water shortages, military setbacks, and fears of an Israeli strike on Iran’s nuclear facilities.
As the nation teeters on the brink of economic collapse, the path forward remains fraught with challenges, with officials weighing the risks of negotiation against the potential for domestic upheaval.