US Treasury Secretary Details Economic Impact of Sanctions on Iran

U.S. Treasury Secretary Scott Bessant stated that eight weeks after the launch of "Economic Isolation Operation," Iran's economy is facing severe repercussions. The Iranian currency has collapsed, with the dollar potentially exceeding three million rials, as official exchange rates are no longer published. Bessant estimates Iran's economy could shrink by up to 25% between March 2026 and March 2027, a contraction comparable to the Soviet Union's economic decline after the fall of the Iron Curtain.

Internal assessments suggest that even Iran's Revolutionary Guard Corps (IRGC) acknowledges the dire economic situation, with members expressing concern publicly and privately about a "collapse." Bessant described IRGC members as "rats trapped in a sewer pipe," fearing for their lives and retreating to bunkers, which he warned could make them more dangerous and disconnected.

The sanctions have also crippled Iran's ability to pay salaries and replenish essential resources, as they struggle to acquire dollars. Furthermore, funding for Iran's proxy organizations, including the Houthis, Hamas, and Hezbollah, is drying up, marking a critical phase in the economic pressure campaign, Bessant explained.