Iran's Leader Admits Economic Toll as Ordinary Families Brace for Deeper Hardship

Masoud Pezeshkian’s words on Friday were unusually candid. “Some say sanctions have no effect at all; to those people, I really don’t know what to say,” the Iranian president told state television. “We are in a war situation, and we must accept these wartime conditions.”

That admission lands hard for ordinary Iranians already absorbing the weight of six months of conflict. Imports and exports have fallen between 25 and 35 percent as Washington maintains its naval blockade of Iranian ports. Pezeshkian signaled the government may raise petrol prices, compounding pressure on household finances already strained by inflation and weakening trade. Job creation, market stabilization, and reducing dependence on the US dollar have become the government’s stated priorities, a list that reflects how deeply daily economic life has been disrupted.

Yet Tehran shows no sign of yielding on the Strait of Hormuz, the waterway through which roughly a fifth of global oil and liquefied natural gas supplies flowed before the conflict. Iran’s Revolutionary Guards navy said Friday that Tehran maintained “full control” of the passage and rejected US assertions that the strait remained open. Iran says restrictions will persist until Washington ends military action and meets earlier commitments.

For UAE residents, the strait’s status is the most consequential development to track. Shipping has collapsed to a fraction of normal levels. On Thursday, only seven commodity ships passed through, compared with 17 the previous day and a recent daily average of 15. US Central Command has enforced the blockade aggressively; as of August 28, CENTCOM said its forces had redirected 82 commercial vessels, disabled three, and boarded two.

Meanwhile, diplomatic efforts are intensifying across the Gulf. Qatar, Oman, and Pakistan have stepped up mediation attempts to restore freedom of navigation and revive negotiations between Tehran and Washington. Iranian Foreign Minister Abbas Araghchi met Qatar’s Prime Minister and Foreign Minister Sheikh Mohammed bin Abdulrahman Al Thani in Tehran on Thursday, with discussions centered on de-escalation and maritime freedom. Araghchi posted on X that diplomacy remained possible but insisted the US must abandon its pressure campaign. “Putting diplomacy back on track isn’t impossible,” he wrote, adding that Washington needed to grasp that “pressure doesn’t work.”

Iran and Oman are also exploring a possible arrangement governing commercial shipping through the strait, though no final agreement has been announced. Kuwait’s Foreign Minister Sheikh Jarrah Jaber Al-Ahmad Al-Sabah held separate calls with his Omani and Qatari counterparts as Gulf states coordinated to reduce tensions and secure maritime safety. Qatar said it continued to support diplomatic attempts to create conditions for a comprehensive regional agreement.

The economic vise is tightening from Washington’s side too. Treasury Secretary Scott Bessent this week promised what the administration describes as an effort to isolate Tehran economically, complementing the naval blockade that has become the primary US pressure mechanism as direct military confrontation has eased.

The diplomatic opening remains narrow. Araghchi’s statement signals Iran’s willingness to return to talks if Washington changes course, but Tehran’s insistence on sanctions relief and an end to military action as preconditions keeps the path forward blocked. Iran’s public acknowledgement of economic strain could theoretically increase pressure for a settlement. For now, Tehran continues to use the strait as leverage rather than a concession point.

Some signs of cautious normalcy are emerging elsewhere. American diplomats and some family members are beginning to return to US embassies across the Middle East after earlier evacuations and staffing restrictions. US embassies in Qatar, Kuwait, and Bahrain announced Friday that some family members would be permitted to return, with the change applying to adult dependants in Bahrain and Kuwait. The State Department has also begun easing some staffing restrictions at regional diplomatic missions. These moves do not signal a shift in Washington’s Iran policy; the Trump administration continues to emphasize economic pressure over diplomatic engagement.

For residents and travelers, the practical disruptions remain real. UAE airlines continue to operate most services, though passengers on some Gulf and international routes face cancellations and delays. Emirates, Etihad Airways, Air Arabia, and flydubai are operating, but some services to Bahrain and Kuwait remain affected. Air Arabia has cancellations on several Gulf routes, while individual Emirates and flydubai services are experiencing disruption. Several international airlines continue to suspend or restrict services to and from the UAE and the Middle East into October and beyond.

Passengers should check specific flight numbers before heading to the airport rather than relying on general route status. Travelers are advised to arrive at least three hours before departure; flydubai recommends passengers departing Dubai allow at least four hours. Schedules can shift quickly.

Whether Pezeshkian’s rare public candor about sanctions pain signals a genuine shift in Iran’s calculus, or simply reflects domestic political pressure, is the question that Gulf diplomats and ordinary residents alike will be watching in the days ahead.