The Trump administration’s waiver last week allowing Iran to sell oil and receive dollar payments gives Tehran a path to billions of dollars in badly needed foreign currency, but ordinary Iranians are unlikely to see economic relief for months or longer, according to analysts, business owners and residents.
Iran’s oil exports have already begun to rise despite tit-for-tat strikes in recent days, tanker trackers said. Analysts estimate that Iran could gain as much as $10 billion in the next two months from the oil sales alone. Gregory Brew, a senior analyst focusing on Iran at Eurasia Group, estimated the oil-sales waiver could be worth $8 billion to $10 billion to Iran over 60 days.
“In the short term this is a windfall, but it isn’t enough to kick-start the broader economy,” Brew said. “Tremendous damage has been done to industries and to infrastructure in major cities and the government needs to create an impression that peace will last, that the bombing won’t come back.”
The war has taken a significant toll on an economy already buckling under runaway inflation — which hit 88.6% year-on-year in June — a weakened currency and years of compounding international isolation. Since the conflict, more than a million Iranians have been left without work and the currency has fallen to record lows. A monthslong internet blackout has severely disrupted online commerce.
The International Monetary Fund forecasts Iran’s gross domestic product will shrink 6.1% this year, which would be its steepest contraction since the 1980s. Inflation is projected to average nearly 70% this year.
Iran also faces reconstruction costs estimated in the hundreds of billions of dollars, far more than the initial oil boost is likely to cover. Iranian officials put conflict-related losses at about $270 billion, while the United Nations has reported widespread destruction, with damage to around 150,000 civilian buildings, including 51,000 homes in Tehran. Consulting firm Rystad Energy estimated repairs to Iran’s energy sector could cost as much as $19 billion after strikes hit gas-processing plants, refineries, petrochemical hubs and export infrastructure.
That gap between Tehran’s quick cash injection and the slow recovery could become the deal’s first domestic test, analysts said. Iran faces continuing pressure to keep talking with the U.S. despite flare-ups over who should control shipping in the Strait of Hormuz, as it needs deeper sanctions relief and more time for its economy to recover.
So far, there is little evidence that the deal to end the fighting has begun to ease longer-term problems. Last week, the price of bread in Tehran jumped, with barbari and lavash bread nearly doubling in cost.
A 26-year-old woman laid off from her marketing job during the conflict said she has cut much of her spending, and even if a deal with the U.S. holds for now, she has little confidence in it. “For now I can’t really make any plans for the future,” she said.
The chief executive of an auto-parts importer said he laid off workers, sold down inventory to pay debts and cut costs aggressively to stay afloat during the war. While the interim deal has brought a measure of calm, volatility is still a problem. He is now waiting for a final agreement to be able to plan with any certainty.
“Planning is nearly impossible,” he said. “We’re forced to take risks.”
This skepticism has roots in the aftermath of the 2015 nuclear deal negotiated under President Barack Obama. The sanctions relief provided under that deal helped Iran raise oil exports and reconnect parts of its economy to global trade. But the gains were brief and uneven, with unemployment remaining high and many households seeing little durable improvement in wages, jobs or purchasing power. President Trump then withdrew the U.S. from the deal in his first term and reimposed sanctions.
Some Iranians now fear a repeat, with any relief too short-lived to improve daily life. Worse, some believe that new oil revenue will first bolster the government and its allies, leaving households with little to show for it.
A self-employed technician in Isfahan province said he expects the deal to have little effect on ordinary people’s lives, and that the government will just channel any new cash flows to itself.
“We fear the ceasefire, an agreement and the survival of the regime more than we fear war itself,” he said.