By Amir Havasi

 

WASHINGTON, 24 August. - (ANA) - As US President Donald Trump prepares to lay out details of his “most crushing economic operation ever taken", Iranians fear further economic isolation and hardships.

 

US Treasury Secretary Scott Bessent, writing in The Financial Times on Monday, described the campaign in stark terms, saying: “At dawn begins an economic D-Day — the single greatest financial offensive ever marshalled against an adversary.”

 

A salvo of international measures against the Islamic Republic preceded the expected announcement, with France expelling Iranian diplomats, Washington ramping up pressure by targeting cash networks linked to Iran’s main proxy, Hezbollah, and the UAE suspending trade and financial ties with Tehran.

 

“Yes, I am scared,” said Farhad, a 42-year-old shop owner selling men’s clothing at Tehran’s bustling Valiasr Square, who is uncertain about his future. For him, the news is only the latest in a series of setbacks that have stifled his business.

 

Months of war with the US has taken its toll on the already battered Iranian economy, which has been weakened by decades of international sanctions and mismanagement. This has led to an erosion of Iranians’ purchasing power that is felt acutely by business owners like Farhad, who is now burdened with even more uncertainties.

 

So far, he has had to “worry about the war, American attacks, Israeli attacks, bombardments and protests”, he said. Now it is “even having things to sell”.

 

Mr Trump has said that any country whose financial institutions, businesses or government entities offer Iran a “lifeline” will face “economic consequences” of their own. He has called on allies to help “isolate and defeat” Tehran.

 

It came as the UAE, previously a trade and business partner, announced it had suspended all trade and financial ties with Tehran. The decision follows a spate of attacks on UAE-owned tankers and the country with two missiles last week.

 

Farhad, like many other Iranians, is reliant on imports from the UAE. However, the announcement represents a notable shift in the economic relationship between the two neighbours, which have maintained substantial commercial ties despite long-standing political tensions in the region.

 

In May 2024, the countries held their first Joint Economic Committee meeting in Abu Dhabi. They agreed to strengthen co-operation in tourism, transport, logistics, agriculture, renewable energy and other sectors, while seeking to boost trade and help businesses reach new markets.

 

Trade between the two countries has remained significant, with the UAE serving as an important trading partner for Iran. According to Iranian customs data, bilateral non-oil trade was worth tens of billions of dollars in recent years, with the UAE accounting for a substantial share of Iran's imports and exports.

 

Each escalation in the war has also increased shipping costs. That means both raw materials used for local production and imported foreign goods are more expensive, while Iranians’ purchasing power keeps falling.

 

Exacerbating the situation is Iran’s weakening currency. The rial dropped to a record low of more than 2 million against the US dollar on Monday, compared with 1.65 million before the conflict.

 

Iran's ⁠currency ⁠has ​dropped ⁠to a record low ⁠of ​more ⁠than ‌2,000,000 ​rials per U.S. dollar, two websites tracking ​the ‌free ⁠market ​rate ​showed ‌on ⁠Monday.

 

“Everyone keeps telling me that things are getting worse, because of the Emirates’ official announcement,” Farhad said. “In general, we are all scared. Go to the Grand Bazaar. Look at the shopkeepers’ faces. They’re all depressed.”

 

Food prices in Iran have risen consistently in recent years, driven by a weakening currency and rising inflation. The war and the ensuing US naval blockade have only made things worse, squeezing already dwindling oil revenue and affecting imports.

 

The prices of some staples have grown explosively in the past year, according to state data. Cooking oil, for instance, is up about 400 per cent to $1.78 for 810g, while meat costs up to $15 a kilo.

 

On top of the huge annual inflation of over 80 per cent, massive job losses have followed since the conflict began. According to the Donya-e Eqtesad newspaper, unemployment spiked to a four-year high of 9.1 per cent by early June, up from 7.5 per cent a quarter earlier.

 

Iran is currently exporting no oil, according to the country’s central bank chief, who warned that access to foreign exchange reserves has become more difficult after being blocked by the US. Abdolnaser Hemmati said Tehran faced severe restrictions on oil exports as Washington steps up economic pressure while efforts to resolve the war remain deadlocked.

 

“There is no doubt that we have restrictions on oil exports,” Mr Hemmati said on state television. The Central Bank of Iran governor said he had spoken to counterparts overseas and was told revenue from oil sales had “fallen to zero”. He added: “The same thing has happened to us and it is a reality that we are not exporting oil.”

 

In his threats, Mr Trump warned against providing Iran with “oil smuggling, swap lines, cash transfers, exchange houses, ship registries, front companies”, adding “you know who you are”.

 

Treasury Secretary Bessent said that economic pressure means that "we are going to all of our allies – and this is going to be the greatest co-ordinated economic isolation in the history of the world – and we are going to them and saying, ‘You are either with us or against us',” he told CNBC.

 

Rayan, who works in Iran’s pharmaceutical industry and regularly uses foreign exchanges in neighbouring cities for his clients’ payments, expects "further isolation", citing countries that used to allow Iranian financial activities limiting their activities until further notice.

 

"They’re waiting to see what happens … now that things are escalating,” Rayan said.  - (ANA) -

 

AB/ANA/24 August 2026 - - -