What lies ahead for Iran’s economy as scope of US war grows beyond Hormuz?

What the report says

Al Jazeera reported from Tehran on July 26 that Iran and the United States have resumed mediated contacts through Oman while direct military action is paused, but the conflict is still weighing on shipping routes and Iran’s economy. The Strait of Hormuz remains nearly closed, the US has reimposed a naval blockade on Iran’s southern ports, and related disruptions have spread to the Red Sea and the Caspian Sea.

According to the report, Iran’s Petroleum Ministry said the country sold $11.5bn in crude during the war, including $6.5bn during a now-suspended memorandum of understanding with Washington signed in June. The ministry said the total equals 60 percent of the annual oil revenue goal in the budget. A previous blockade from April to June had pushed crude exports close to zero, and Al Jazeera noted that a prolonged second blockade could strain Kharg Island and other export and storage facilities.

US Central Command said it had redirected 12 commercial vessels, disabled two others and boarded two to enforce the blockade. Iran has said it is also diverting ships to keep Hormuz closed, though Foreign Ministry spokesman Esmaeil Baghaei described talks with Oman on reopening the waterway as productive. Al Jazeera also reported Houthi activity near Bab al-Mandeb and a Ukrainian strike on a vessel in the Caspian Sea, widening concerns over maritime insurance and trade costs.

Domestically, Iran faces damaged energy infrastructure, rolling power cuts, petrol shortages and possible tighter fuel quotas or higher prices. Al Jazeera cited government figures saying bombing had cut gas output sharply, while China trade and oil flows have also been disrupted, adding pressure to an economy already weakened by sanctions, inflation and declining purchasing power.