Indirect negotiations between Iran and the United States have resumed through mediators, resulting in a temporary lull in military strikes; however, the ongoing conflict continues to destabilise global shipping routes and the Iranian domestic economy.
While Esmaeil Baghaei, the Ministry of Foreign Affairs spokesperson, indicated that discussions in Oman regarding Strait of Hormuz have been constructive, significant regional volatility persists, reports Al Jazeera.
The maritime conflict has broadened to include Red Sea, where Iran-aligned Houthis have initiated a blockade against Saudi Arabia, and Caspian Sea, where Ukraine recently targeted an Iranian vessel.
Simultaneously, US military’s Central Command (CENTCOM) is enforcing a second naval blockade on Iran’s southern terminals. As of Saturday, CENTCOM reported intercepting 12 commercial ships, disabling two for non-compliance, and boarding others including the sanctioned tanker Charminar to maintain the blockade.
Oil exports and infrastructure under pressure
Iranian officials have warned that a sustained blockade could drive crude exports to near-zero, echoing a two-month shutdown earlier this year. This poses a severe threat to Kharg Island, the facility responsible for 90 per cent of Iran’s crude exports.
Despite these challenges, the Ministry of Petroleum reported $11.5 billion in crude sales during the war, reaching 60 per cent of the annual budget target. The high oil prices contributed an additional $3 billion in value during the first half of the year.
Domestically, the war has caused catastrophic infrastructure damage. US and Israeli air strikes in February resulted in the loss of approximately 230 million cubic metres of daily natural gas production, triggering widespread electricity, water, and communication failures in Tehran and other regions.
Although Sekhavat Asadi of the Pars Special Economic Energy Zone expects to restore 100 million cubic metres of capacity soon, shortages remain critical.
Economic crisis and social unrest
To address a daily petrol deficit exceeding 20 million litres, the government is considering doubling the price for certain fuel quotas. President Masoud Pezeshkian has directed that industrial power supplies remain active until late September to safeguard the job market.
However, the economic outlook remains grim; a report from the Saba Pension Strategies Institute estimates that 45 per cent of Iranians now live below the poverty line.
Trade with China, Iran’s primary partner, has also suffered, with non-oil commerce plunging 75 per cent between March and June. Tensions recently escalated in the north after Ukraine confirmed striking a vessel in the Caspian Sea, claiming it carried military supplies.
Tehran, asserting the ship was a commercial vessel carrying iron, has formally protested to Kyiv. Political observer Mahdi Kharratiyan noted that the Middle Eastern and Ukrainian fronts are becoming “increasingly intertwined,” prompting some in Iran to seek deeper strategic ties with Russia and China.
