Iranians rush to buy fuel and food as Trump threatens tighter sanctions

Currency slides past two million per dollar as labor protests resume

Iranians rushed to buy fuel and food this week as the Trump administration threatened to tighten sanctions. Long queues formed at fuel stations in Tehran and other cities. Some stations ran out of motor fuel, residents and officials said. Small labor demonstrations that had largely disappeared during the war are reappearing as oil workers, pensioners and teachers protest declining currency and rising costs.

The US is hoping to leverage such pressure to push Iran’s leaders to reopen the Strait of Hormuz and end the war on more favorable terms. Treasury Secretary Scott Bessent said Monday that countries and companies doing business with Tehran will face the wrath of the administration. The threats came as war damage, a US Navy blockade and tightened sanctions are already pressuring Iran’s economy.

On Monday, Iran’s currency fell to a record low of more than two million to the dollar, down 7% on the week and buying half as many dollars as a year ago. Many consumers are now taking on new debt to cover basic living costs. Meat is often bought on credit and repaid in installments with interest, residents said. The reformist newspaper Etemad captured the shift: “This phenomenon is not a new payment method; it is a sign of a major change: poverty.”

Some supermarkets in Tehran temporarily ran out of cooking oil and rice this week as shoppers scooped them up for hoarding, residents said. The government insists it has enough basic commodities to last for months, but the US decision to tighten restrictions on Iran’s international trade is already having a psychological impact. The country imports a large amount of rice from India through the United Arab Emirates, which last week said it was severing trade ties with Iran. A translator in Tehran described the panic: “There was hysteria and, in some neighborhoods, customers rushed to supermarkets. The risk of shortage tied to U.S. sanctions threats has triggered panic.” Supplies were more available online and in more upscale markets.

Drivers have rushed to fill their tanks ahead of a planned reduction in quotas for subsidized fuel. Iranians have access to some of the world’s cheapest gasoline, in some cases paying less than a penny a quart, but the government is preparing to ration supplies after refineries were struck during the war and amid concerns fuel imports may be cut by new sanctions. Iran’s fuel production cannot cover its domestic needs, making it vulnerable to the new US sanctions push, said Hamid Hosseini, spokesman for Iran’s oil-exporting union. Supplies come from Belarus, Turkmenistan and Kazakhstan.

Small demonstrations by labor unions, which had all but disappeared during the war, are popping up across the country. On Monday, offshore oil and gas workers protested in the energy hub of Asaluyeh, saying workers who keep production running shouldn’t be facing a livelihood crisis or struggling to pay rent, the semiofficial news agency ILNA reported. The previous day, about 100 laid-off workers had been demonstrating at the Shadegan steel complex in western Iran. Earlier in August, 32 petrochemical workers in Bandar-e Mahshahr publicly protested their dismissals, according to ILNA.

Members of the Coordination Council of Iranian Teachers’ Trade Associations are tying Iran’s deteriorating economic conditions to its leaders’ uncompromising war posture. A retired teacher wrote on the union’s social-media channel that the government had promised during the war to send oil prices to $200 a barrel and punish Iran’s attackers. The teacher said the country is instead being battered by its own collapsing currency. “Three days have passed since we received our August salaries,” he wrote. “There’s barely anything left.”

Many analysts say the US tactics will pummel Iran’s population but are unlikely to move its leaders, who have weathered tough sanctions for years and feel they are fighting an existential war. Iran’s leaders are implementing rationing and diverting resources from investments to hold out. The US also faces economic pressure; Bessent said he was avoiding acting immediately because he didn’t want to shake the global economy.

Iranian President Masoud Pezeshkian and parliamentary speaker Mohammad Bagher Ghalibaf said the country needs to focus on ending the war and shoring up its crippled economy. Hard-line leaders, however, are setting a high bar for a deal and seeking to raise the cost of the war for the US.

Iranian officials worry a deepening economic crisis could revive unrest. In 2019, cuts to fuel and food subsidies after Trump tightened sanctions during his first term triggered months of deadly mass protests. In December, bazaar merchants protesting a sharp drop in the currency sparked waves of demonstrations with calls to topple the government. While the government tolerates a measure of economic protest as a safety valve for anger, some of the recent gatherings have hit political notes despite the risks. Those same conditions triggered protests around the new year that led to what the Journal described as a brutal crackdown that killed thousands.