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‘Economic Conditions are Deteriorating’: Iran Faces an Economic Crisis as Long Lines at Gas Stations and Inflation Hit Hard

Jack Buckby reports that Iran’s new supreme leader has urged Gulf neighbors to unite against their real enemy in his first major message since February, even as Tehran arrests last winter’s protest organizers, hands the Basij to a former IRGC intelligence chief, and debates whether to deal with Washington or outlast Trump.

President Donald J. Trump delivers remarks at the David S. Mack Center for Training and Intelligence in Garden City, New York, Friday, August 14, 2026. (Official White House Photo by Molly Riley)
President Donald J. Trump delivers remarks at the David S. Mack Center for Training and Intelligence in Garden City, New York, Friday, August 14, 2026. (Official White House Photo by Molly Riley)

Iran’s Supreme Leader has called for unity at home and across the Middle East last weekend, as Tehran begins to strengthen its internal security apparatus amid growing concern that, after six months of war and rising inflation, the civilian population could begin new anti-government protests.

In a written message on Sunday, August 30, Supreme Leader Mojtaba Khamenei called on Muslim countries, particularly Iran’s Gulf neighbors, to unite against what he described as their “real enemy.” The message was Khamenei’s first major public intervention since he was seriously injured in the opening U.S.-Israeli strikes on Iran on February 28.

His father and predecessor, Ayatollah Ali Khamenei, was killed in those attacks. But the call for unity comes as the United States continues its work to normalize relations between Muslim countries in the Middle East, Israel, and the West – and as Gulf countries remain concerned about Iranian aggression as Tehran attempts to secure its control over the Strait of Hormuz and, in turn, the global economy.

The appeal from Tehran comes as Iran faces growing internal pressure over its poor economic health, with fuel shortages leading to long queues at gas stations and rising resentment among the civilian population. President Masoud Pezeshkian and other senior officials are now warning that economic conditions are deteriorating, while hardliners in Tehran are preparing the government for a prolonged confrontation that will extend at least past the United States’ November midterm elections.

Khamenei Calls for Unity

Supreme Leader Mojtaba Khamenei urged Iran’s Gulf neighbors on Sunday to unite against the United States and Israel, issuing a written message in which he called on regional governments to recognize what he described as their shared “real enemy.”

In the letter, the Iranian leader said that anybody who “knowingly or unknowingly” creates division among Muslim nations is helping the enemies of Islam.

“The solution to the problems of the Islamic nations is unity of words, friendship, and cooperation on the path of goodness,” the letter reads. “Anyone, in any position, who does anything that leads to division among Muslims and creates conflict in the Muslim community, knowingly or unknowingly, intentionally or unintentionally, has served the purpose of the enemies of Islam.”

“My enduring and repeating advice to rulers of Islamic nations,” he said, was “to know your real enemy, understand its plans and confront it.”

Supreme Leader Intervenes Over War Debate

It was easily the most significant public intervention by the new Iranian leader since he was seriously wounded during the opening U.S. and Israeli strikes on Iran in February.

The letter also came only two days after the supreme leader intervened in the public argument over whether Iran should continue the conflict with the United States or seek to make a deal. Reports have described how senior officials, including President Masoud Pezeshkian and Parliament Speaker Mohammad Bagher Ghalibaf, believe that now is the time to make a deal with the United States and take steps to improve the national economy, while hardliners insist that the war must continue and that Iran should wait out the end of President Donald Trump’s term in 2029.

The supreme leader intervened, urging the government to address the country’s weaknesses without making it a public discussion, citing his fears that doing so would communicate the country’s vulnerabilities to its enemies.

Tehran Prepares for New Protests

Amid growing unrest and economic problems, Tehran is now preparing for the likelihood of new protests.

Iran’s Intelligence Ministry announced on Friday that authorities had arrested 30 people accused of helping organize or participate in the anti-government protests that erupted last winter. The government is also strengthening the Basij, the Islamic Revolutionary Guard Corps-linked paramilitary organization that has historically played a central role in suppressing demonstrations.

Former IRGC intelligence chief Hossein Taeb was appointed to lead the Basij earlier this month, tasked with strengthening its intelligence network and expanding its presence in neighborhoods and among different sections of Iranian society. Taeb has since focused his attention on traders and bazaar merchants, per reports – an important constituency that played a major role in the unrest that took place last winter.

The preparations suggest that Tehran is concerned about what could happen as the economic situation deteriorates – a bet that Washington is making, fully expecting that Iran will eventually concede under the weight of new economic sanctions. 

Hardliners Think They Can Outlast Trump

Hardliners who believe that Iran can outlast Trump, either by waiting until the November midterms or until after 2029, now face a major challenge. Conflict on the streets could ultimately force the regime to compromise or, in theory, bring it to an end entirely.

With Tehran now preparing for unrest, it’s clear that President Trump’s economic campaign has legs. But the question now is how long it will take for Iran to concede, and what could happen in the meantime.

About the Author: Jack Buckby

Jack Buckby is a British researcher and analyst specializing in defense and national security, based in New York. His work focuses on military capability, procurement, and strategic competition, producing and editing analysis for policy and defense audiences. He brings extensive editorial experience, with a career output spanning over 1,000 articles at 19FortyFive and National Security Journal, and has previously authored books and papers on extremism and deradicalization.

Jack Buckby
Written By

Jack Buckby is a British author, counter-extremism researcher, and journalist based in New York. Reporting on the U.K., Europe, and the U.S., he works to analyze and understand left-wing and right-wing radicalization, and reports on Western governments’ approaches to the pressing issues of today. His books and research papers explore these themes and propose pragmatic solutions to our increasingly polarized society. His latest book is The Truth Teller: RFK Jr. and the Case for a Post-Partisan Presidency.

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