Can Tehran survive a ‘zero oil’ budget, if US blockade on Iran persists?

What the report says

Al Jazeera reports that Iran is preparing for a prolonged period of economic pressure as the United States maintains a blockade and sanctions regime that is sharply reducing Tehran’s oil income. The article says Iranian officials are planning next year’s budget around a worst-case scenario in which oil revenue could fall to zero, while also leaving open a more optimistic path if restrictions ease. The government has publicly rejected the idea of imminent collapse, but acknowledges that the current “no war, no peace” environment is damaging.

According to the report, President Masoud Pezeshkian’s administration has outlined two budget scenarios: continued blockade and sanctions, or some improvement in financial and commercial access. A senior budget official said the state must be ready for zero oil earnings. The article says the pressure has already affected shipping and trade, with US officials claiming to have redirected ships, disabled vessels and targeted oil tankers linked to Iran’s shadow fleet. It also cites market data showing Iranian crude production has fallen and that oil floating outside the blockade zone has dropped to zero.

The piece places this in a wider economic context: Iran already faces high inflation, weaker purchasing power, banking strains and budget imbalances. Economists quoted by Al Jazeera say the government may need spending cuts, subsidy reforms, tax changes and other fiscal adjustments, but that these steps cannot fully replace foreign currency from oil exports. The report argues the stakes are broader than state finances, because prolonged restrictions could deepen poverty, weaken the middle class and slow the economy further.