Iran’s financial woes expose regime’s tight grip | EUROtoday

When the Islamic Revolution toppled the Shah of Iran in 1979, one US greenback (€0.86) was price simply 70 Iranian rials. By early 2026, that determine had soared to an astonishing 1.4 million rials for a single greenback.

The collapse of Iran’s nationwide foreign money has turn out to be a defining image of Iran’s financial decline, with rising numbers of Iranians bearing the brunt. Under the Shah, the rial was virtually 20,000 instances stronger towards the greenback than it’s at this time.

Current discontent has unfold properly past conventional opposition circles. In latest weeks, even teams that when supported the Shiite muslim regime after the 1979 revolution have joined the protests.

In December 2025, influential bazaar retailers in Tehran have been among the many first to publicly exhibit towards the deepening financial disaster, galloping inflation of practically 50%, and the rial’s dramatic lack of worth.

“We are struggling. We cannot import goods because of US sanctions and because only the Revolutionary Guards or those linked to them control the economy. They only think of their own benefit,” one bazaar service provider, who requested to stay nameless, just lately instructed information company Reuters.

Iran’s financial malaise is compounded by decaying infrastructure, says Andreas Goldthau, an Iran professional at the University of Erfurt in Germany, with its vitality infrastructure specifically being in “poor condition.”

“Iran is therefore struggling to uphold its social contract [with the population]. Despite its energy wealth, power outages are a daily occurrence. As energy subsidies consume an ever larger share of the state budget, gasoline prices have been raised, hitting families and businesses,” he instructed DW.

Revolutionary Guards, bonyads, and Iran’s elite financial system

Iran’s financial system is tightly interwoven with the political elite of the Islamic Republic, above all of the Islamic Revolutionary Guard Corps (IRGC), which controls huge swaths of financial exercise.

Alongside IRGC operates a community of spiritual foundations generally known as bonyads, which wield important affect over infrastructure initiatives, training, and the pharmaceutical sector.

Even the so-called Seal of the Prophet has nothing to do with the historic relic displayed at Istanbul’s Topkapi Palace in Turkey. In Iran, the identify belongs to the nation’s largest development and industrial conglomerate, which can also be managed by the Revolutionary Guards.

The IRGC earnings from practically each nook of the financial system: airline passengers, transport containers, exports, and imports of every kind. Whether oil manufacturing, the arms business, or specialised medical clinics, little features with out the Guards’ involvement. They are extensively considered Iran’s largest smuggling community, exporting sanctioned oil to China and importing banned items equivalent to alcohol.

The Guards additionally personal Western-sanctioned airways, together with Mahan Air, and maintain a dominant stake in Iran’s largest telecommunications operator, TCI. In the sector’s second-largest firm, MTN Irancell, the army is joined by figures near Iran’s Supreme Leader Ali Khamenei.

Just how in depth the Guards’ financial attain is stays a matter of debate, even amongst Iran specialists.

The IRGC’s company holdings and enterprise networks are notoriously opaque, with nearly no significant oversight, regardless of occasional corruption instances pursued by state authorities.

Kayhan Valadbaygi, a researcher on the International Institute of Social History in Amsterdam, Netherlands, says there was little doubt that the IRGC and the bonyads have been the “dominant economic actors in Iran since the late 2000s.”

“But estimating their exact share of GDP is difficult. They operate complex networks of holding companies, shell firms, and so-called charitable foundations, making the full scope of their activities hard to capture,” he instructed DW.

Valadbaygi estimates that by the late 2010s, the mixed financial community of the army and religious-revolutionary foundations already accounted for round 50% of Iran’s GDP. “Since then, their influence has only deepened,” he stated. “Today, they control well over half of the country’s economic output.”

The Guards’ aggressive pursuit of financial affect grew to become evident when the IRGC blocked the deliberate inventory market itemizing of Divar, Iran’s main on-line categorised advertisements platform, regardless of holding no stake within the firm.

“In Iran, whenever you make money, some organization, some quasi-state entity suddenly appears and intervenes,” an entrepreneur near Divar’s administration instructed the Washington Post newspaper.

How for much longer can Iran’s ‘zombie regime’ keep in energy?

The pool of disaffected Iranians is increasing, in keeping with Karim Sadjadpour of the Carnegie Endowment for International Peace in Washington, D.C.

“The revolution of 1979 took a year to reach its climax,” Sadjadpour instructed the US broadcaster MS Now. “Protests against the Shah began in January 1978, followed by 12 months of unrest. The current protests, by contrast, began only about three weeks ago.”

Sadjadpour describes Iran’s rulers as a “zombie regime with a dying ideology, dying legitimacy, a dying economy, and a dying, 86-year-old dictator.”

Yet, he cautions, the system stays able to deploying deadly pressure. “And that is what keeps the regime in power,” he added.

Such repression can solely delay, not stop, a reckoning, Sadjadpour argues. “Iran is a nation on the cusp of transformation. Whatever emerges from these protests, there is an 86-year-old supreme leader who will soon leave the scene. And I don’t believe anyone — neither in society nor within the regime itself — expects the status quo to last.”

For Kayhan Valadbaygi, the decisive issue lies not in avenue protests alone, however in US coverage — although not within the type of army intervention.

Even a renewed fall in oil costs under $50 per barrel wouldn’t essentially threaten the regime, he argues, since Iran has endured extended intervals of low costs earlier than and tailored to volatility in international vitality markets.

“During the oil price collapse from 2014 to 2016, and again in 2020, prices fell well below this level while Iran was already under severe international sanctions,” Valadbaygi famous.

What finally issues, he stated, will not be the oil worth itself however whether or not Iran can proceed exporting oil regardless of US sanctions. “Low prices are painful but manageable,” Valadbaygi stated. “A near-total halt to oil exports, however, would be far more damaging to state revenues and fiscal stability.”

This article was initially written in German.