US-Iran Conflict Wrecks Havoc on Iranian Economy

The ongoing conflict between Iran and the US has taken a toll on the country's economy. The war has resulted in the near-total closure of the Strait of Hormuz, disruptions in the Red Sea, and even affected domestic markets. Despite mediated talks and suspended military action, tensions remain high.

The Ministry of Petroleum reported that Iran has sold $11.5 billion of crude oil during the conflict, which is 60% of the full-year oil revenue target in the budget. The country's government is also considering a potential fuel price hike amid high social and economic discontent.

Iran's infrastructure has suffered significant damage during the war, with about 230 million cubic meters per day of pre-war natural gas output lost due to US and Israeli bombing. Authorities are managing a fuel imbalance by importing fuel, blending components, and tapping inventories stocked before the war.

The government is also considering doubling the price of monthly petrol quotas allocated to individuals, which could exacerbate economic woes. Iran's commerce with China has been severely impacted, with nonoil trade falling by 75% in March and June compared to a year ago.