Iran's currency, the rial, has dropped by more than 5% in two weeks, following Israeli strikes against Hezbollah in Lebanon, Iran's missile attack on October 1, and Israel's threat of retaliation.
On Sunday, October 6, the rial was trading at 630,000 to the US dollar, down from 592,000 on September 20, when Hezbollah began experiencing mass casualties from exploding pagers and walkie-talkies. This was followed by an Israeli airstrike that killed Hezbollah leader Hassan Nasrallah, prompting Iran to launch a massive ballistic missile attack on Israel. Israel's subsequent threat of retaliation has left Iran on edge, further weakening its already battered currency.
Gold prices also rose in Tehran in tandem with a rising dollar and other major currencies.
An Israeli attack could target Iran’s energy sector, potentially causing domestic chaos and a significant reduction in oil exports—the financial lifeline of Tehran's Islamic government.
Iranians are concerned about a potential Israeli attack, although it seems targets will be mainly military and political. An attack on Iran's refineries could lead to serious difficulties as the winter approaches.
Since 2018, when the US withdrew from the JCPOA nuclear deal and imposed sanctions on Iran’s oil exports and international banking, the rial has lost 15 times its value. In the past three years alone, it has depreciated by more than 50%.
This sharp devaluation has coincided with soaring inflation, now hovering between 40-50%, pushing tens of millions of Iranians into poverty and creating a potentially volatile public mood.
The Iranian government has been quietly signaling an interest in new negotiations with the West this month to reduce sanctions, but so far, the US and its European allies maintain that only a genuine change in behavior will lead to talks."
Iranian hardline newspapers are ramping up threats against Israel, detailing an extensive list of potential targets Iran will strike if Israel retaliates for last week's ballistic missile barrage.
An IRGC source told Tasnim News "if Israel takes any steps, there will be no hesitation in carrying out Iran's retaliatory strike," adding that several types of counterattacks are ready to be executed depending on the nature of Israel's retaliation.
Last week, Iran launched two waves of ballistic missiles towards the Jewish state, the second direct attack on Israel this year as aggression between the two archenemies escalates to crisis levels.
Tehran-based Hamshahri newspaper, understood to be reflective of the sentiment of the hardline faction in Iran, on Sunday outlined Iran's potential targets in the event of an escalation. Among the 35 strategic locations named in the newspaper’s infographic are critical infrastructure and military facilities in Israel, understood to be part of the government's messaging to its nemesis.
Key targets identified include the Hagit Combined Cycle Power Plant and the Orot Rabin Power Plant in Haifa, both essential to Israel's energy grid. Additionally, the Bazian Oil Refinery, Israel’s largest, and the Ashdod Oil Refinery, the second-largest, are highlighted as vital points in the country’s energy production and distribution.
Israel's gas infrastructure was also cited, with the Tamar Gas Field and the Leviathan Gas Field listed as potential targets. These facilities play a major role in Israel’s domestic energy needs and export capacity, and any disruption would significantly impact the economy.
Military sites are also among the targets, including Nevatim Air Base and Ramat David Air Base, crucial for Israel’s air defense. Civilian locations such as Ben Gurion International Airport in Tel Aviv and Ramon Airport in Eilat are also on the list.
A BBC report on Wednesday also noted that Iran's next volley of missiles could shift focus from military bases to Israeli residential areas. The report further highlighted that Iran's IRGC Navy, with its fast missile boats, could attempt to sow mines in the Strait of Hormuz, interrupting the flow of up to 20% of the world’s daily oil exports, or launch swarm attacks on US Navy vessels. Additionally, US military bases scattered throughout the region are also potentially vulnerable to Iranian strikes, according to the report.
Last week's attack caused damage in various parts of Israel, including at airbases. The Israeli military reported that despite the damage, no aircraft or critical infrastructure were hit, and the Israeli Air Force continues to operate at full capacity.
Israel is yet to respond to Tuesday’s attacks, with Israeli Prime Minister Benjamin Netanyahu having vowed retaliation for Iran's missile strike, saying Tehran would "pay for it."
The US, a critical ally, has called for a "proportionate" response as Israel weighs its options.
Iranian authorities are restricting the flow of information about last month's coal mine explosion in Tabas which killed at least 51 workers as the country fails to control a spate of disasters blighting the industry dating back years.
Iran’s security agencies have threatened labor activists and the families of Tabas coal miners for sharing information about the miners and the conditions at the Tabas mine, Iran International has learned.
Activists on social media have also been coerced into deleting their posts related to the disaster.
The explosion, which occurred on September 21, was caused by a methane gas leak deep within the mine according to state TV. Rescue operations were hampered by high levels of methane gas, with many miners trapped in Block B, where conditions were particularly hazardous.
On Saturday, Ali Nesa'i Zahan, the prosecutor of South Khorasan Province and lead investigator in the case, confirmed that "negligence regarding the lack of safety at this mine has been established, and this failure is attributed to the mine's officials," as reported by the state-run ISNA.
He added that the investigation is ongoing, with the next step being to assess the degree of negligence and identify "which individual or individuals are responsible," with the findings to be submitted in writing to the judge.
"Ultimately, those found responsible will be summoned to the court and held accountable," he said, noting that sharing images or other details of suspects during the investigation is prohibited.
A day after the disaster, Iran's attorney general, Mohammad Movahedi Azad, warned that “no entity is permitted to comment on potential negligence until a final verdict is issued by the investigating judge.”
The Islamic Republic's suppression of information about the Tabas explosion is part of a broader pattern of limiting public discourse on sensitive issues within the country.
Iranian authorities have frequently used intimidation tactics to silence families and activists. Families of the victims of Ukraine International Airlines Flight PS752, which was shot down by the Islamic Revolutionary Guard Corps (IRGC) on January 8, 2020, also faced threats, including murder and torture, aimed at preventing them from speaking out.
Likewise, in 2023, Amnesty International highlighted the Iranian government's campaign of harassment against the families of those killed during the 2022 Woman Life Freedom uprising “preventing them from demanding justice.”
As Iran faces a serious energy crisis, Israel's potential retaliation could reportedly target oil refineries or export terminals, turning the country's struggling energy sector into a prolonged disaster.
This summer, Iran faced a 20,000-megawatt electricity deficit, equivalent to 25% of the country's electricity demand. Unlike previous years, Iran experienced a gas shortage alongside the electricity deficit. As a result, the consumption of fuel oil (mazut) in Iran's power plants doubled, and diesel consumption increased by 80%.
Altogether, these two polluting fuels accounted for 15% of the power plants' fuel supply. With the onset of autumn, this share has risen to 25%, and in winter, it's expected that half of the fuel used in power plants will be fuel oil and diesel, requiring the consumption of 150 million liters of liquid fuel per day in this sector.
Meanwhile, data from the Ministry of Oil shows that the country's reserves of diesel and fuel oil amount to only 1.5 billion liters. Even if no diesel or fuel oil is provided to industries or land and sea transportation, this quantity would only suffice for 10 days' worth of electricity production.
In recent years, Iran has faced a growing gasoline crisis, with average daily consumption reaching 124 million liters (nearly 33 million gallons). This winter, a severe natural gas shortage is expected to halt the supply of 20 million cubic meters of CNG daily, pushing gasoline consumption to nearly 140 million liters. However, data from the Ministry of Oil shows that the country’s strategic gasoline reserves are barely one billion liters—enough to cover just one week of domestic demand.
If Israel targets just two of Iran's refineries—such as the Persian Gulf Star and Abadan refineries—30% of the country's liquid fuel production capacity, or 800,000 barrels per day, would be lost.
A quarter of the government's budget is allocated to subsidies, which range from monthly cash handouts to heavily subsidized fuel, bread, and other essentials. These subsidies are primarily funded by the domestic and international sale of petroleum products. According to the Supreme Audit Court of Iran, in the first five months of the current fiscal year (starting March 20), the government borrowed 800 trillion rials ($1.3 billion) to cover subsidies—an amount equivalent to one-fourth of the total subsidy expenditure.
The reason for this borrowing is the sharp decline in petroleum product exports due to the significant rise in power plants' demand for fuel oil and diesel, caused by the natural gas shortage. This has resulted in a severe drop in the financial resources for subsidies.
Half of Iran's population lives in poverty, with their livelihoods dependent on government subsidies. If the country’s refineries are attacked, the government will essentially be unable to continue providing subsidies to the people.
Iran is already grappling with an inflation rate exceeding 40%, and the elimination of subsidies and a surge in fuel prices would trigger hyperinflation.
This summer, due to the electricity shortage, Iran's steel production and exports, which account for 16% of the country's non-oil exports, sharply declined. It is expected that this winter, the production of petrochemical products, which make up 30% of non-oil exports, will also drop significantly due to the severe gas shortage.
Iran's winter gas shortage is projected to reach 250 million cubic meters per day, accounting for 25% of the country’s total gas demand. If oil refineries are attacked, the government could lose its ability to supply fuel to power plants, exacerbating the energy crisis.
Crude oil revenues would also be severely impacted in case of an attack on Iran’s production infrastructure. Despite a significant rise in the country's oil exports, only 74% of the government’s oil revenue target has been met in the first five months of the current fiscal year. Even if only the Kharg oil terminal is attacked, Iran would lose 90% of its oil export capacity.
Last year, Iran's oil and petroleum product exports totaled $36 billion, which accounted for 8% of the country's total GDP and nine months of the government's general budget.
Israeli Prime Minister Benjamin Netanyahu says his country will retaliate against Iran following what he called one of the largest missile attacks in history.
Scores of ballistic missiles were launched by Iran toward Israeli cities and military targets last Tuesday. Since then, the entire region has been anticipating an Israeli response to Tehran's second direct attack on Israel since April.
“Iran has twice fired hundreds of missiles at our territory and our cities — ballistic missile attacks among the largest in history,” Netanyahu said in a video statement recorded in his office in Tel Aviv after the Rosh Hashanah weekend.
The Israeli prime minister said no country in the world would accept such an attack on its cities and citizens, and the Jewish state will not either. “Israel has the duty and the right to defend itself and respond to these attacks — and we will do so.”
Netanyahu portrayed the missile attack as part of a broader Iranian strategy to fuel a multi-front war against Israel, using its proxy forces across the Middle East, including Hezbollah in Lebanon and Hamas in Gaza. “As Israel fights the forces of barbarism led by Iran, all civilized countries should stand firmly by Israel's side,” he declared, calling for international support in Israel's fight against Iran.
Hossain Aghaei, an analyst of international relations and strategic affairs, said in an interview with Iran International that "the Iranian government’s efforts to establish deterrence through its proxy groups are futile."
The analyst said the Islamic Republic does not even have a strategic ally in times of danger, and "relying solely on proxy groups will not lead to any success."
Meanwhile, in a broadcast to mark one year since Hamas’s October 7 attack, Israeli President Isaac Herzog underscored that the nation remains vulnerable, with hostages still held by Hamas and residents displaced due to ongoing conflict. He highlighted Iran’s role in supporting militant groups that continue to threaten Israel, stating, "It is in the ongoing threat to the Jewish state by Iran and its terror proxies, who are blinded by hatred and bent on the destruction of our one and only Jewish nation state."
Israel’s Foreign Minister Israel Katz also issued a warning to Iranian Supreme Leader Ali Khamenei on social media, urging him to withdraw Iranian proxies from Lebanon. “Khamenei, take your proxies and leave Lebanon,” Katz wrote in a post on X, alongside images of slain Hezbollah leader Hassan Nasrallah and his likely successor Hashem Safieddine, who is believed to have been targeted by Israeli forces.
Israeli military spokesman Rear Adm. Daniel Hagari also stated on Saturday that his country's response to Iran's "disgraceful attack" will be carried out "in the manner, at the location, and at the timing which we decide."
He acknowledged the strikes but stressed that the Israeli Air Force (IAF) remains fully operational. “There were several impacts in the center of the country, in civilian areas, and there were also impacts in airbases, in Nevatim and Tel Nof,” Hagari said, while assuring that “these impacts did not hit planes and did not harm the Air Force’s competence. The airbases, both Nevatim and Tel Nof, are fully functioning.”
Iran responds to Israeli threats
Iranian officials have not backed down in response to Israel's warnings. IRGC Navy Commander Alireza Tangsiri in a statement on Saturday vowed that Iran would resist any Israeli action.
“The message of peace and friendship to our friends is that ‘we can,’ but the message to our enemies is that if they want to play with fire in the region, we will stand against them decisively,” Tangsiri said. He added that Iran is preparing for any situation, and that “the Leader of the Revolution and the Commander-in-Chief of the IRGC always emphasize the need for full readiness and vigilance to face both normal and exceptional circumstances in the region.”
In a press conference held in Syria, Iranian Foreign Minister Abbas Araghchi also promised a stronger response to any Israeli aggression. “Our response to any Israeli aggression will be clear and direct. Every action will be met with a similar, proportional, and even stronger reaction,” Araghchi stated. “This is something we have repeatedly proven, and they are welcome to test us.”
CENTCOM chief in Israel as tensions mount
As tensions between Israel and Iran continue to rise, US CENTCOM chief Gen. Michael Kurilla arrived in Israel on Saturday for high-level meetings with Israeli defense and military officials. Kurilla’s visit underscores the United States' commitment to its ally Israel as both countries prepare for potential escalation in the aftermath of the Iranian missile attack.
Israel is coordinating its preparations for a retaliatory attack on Iran with Washington, an Israeli official told the country's state broadcaster, adding that "all scenarios" are on the table.
Iran's missile attack on Israel has reignited talk of war, leaving many anxious. Some hope an Israeli strike could free them from the Islamic government. But most remain silently apprehensive—numbed, perhaps, or resigned to their helplessness.
"Some people are in denial, but the war is at our doorstep," says Shayan, a 28-year-old artist who makes a living by teaching painting. "I immediately Googled for shelters in Tehran after the missile attack was announced, but found none. We’re on our own. The authorities don’t even bother to inform or reassure the public."
He refers to reports that Iran's missile attack on October 1 occurred before Iranian airspace was closed. "They launched ballistic missiles while passenger flights were still in the air. Human life holds no value, neither for Khamenei nor for Netanyahu."
Iranian reactions to military actions are often reflected at gas stations. Mere minutes after the missile strike, long lines were formed at gas stations across the country. I’m not sure why. Perhaps a full tank is a slight assurance that you can go somewhere safer if things heat up. I was guilty of this collective rush that night, reaching the actual pump after an hour in line. The attendant asked if I wanted to fill it up. I said please. “I’d do it for free if Israel hits them," he joked.
The killing of Ismail Haniyeh in Tehran led many Iranians to believe that Israel can ‘take out’ anyone it wants—and with precision. This belief was strengthened after the attack on Hezbollah HQ in southern Beirut. Strangely enough, not much was reported about civilian casualties in that operation. Many don’t seem to note that several residential blocks were bombed to rubble, most likely with hundreds in them.
The day after Nasrallah was killed, I overheard a conversation in a pharmacy. "I wonder when they’ll cut off the head of the snake," a young man asked an older man, both waiting for their prescription. “Soon, God willing,” was the response, “and hopefully they’ll be precise like with the last two.” No names were mentioned, but all present knew what was meant by ‘head of snake’ and ‘the last two’.
“People hoping for Israel to attack think it will only wipe out the regime. I don’t believe that’ll be the case.” This was Nasrin, 46, an Instagram ‘influencer’. She’s annoyed by what she calls “casual warmongering” of some people around her. “We all hate the Islamic Republic, but we also love Iran; we don’t want to see it ruined,” Nasrin says. “Those here who cheer for an Israeli attack are either delusional or have no recollection of war like I and many in my generation do.”
That’d be two-thirds of Iran’s population. The war that broke out following Iraq’s invasion of Iran in 1980 ended in 1988. Only a third of Iranians are old enough to remember the sirens and the Soviet-made Scud missiles raining on Iran’s urban centers in the war's latter years—known as the War of Cities.
This is not to suggest that those younger than Nasrin look forward to an Israeli attack. Far from it, in fact. Shabnam is a 36-year-old lawyer who grapples with the “societal consequences” of a theocratic state every day. “I detest the Islamic Republic and its allies. But I abhor Israel too. Hezbollah holds meetings under residential buildings to make it harder for Israelis to strike. But Israel bombs everything including the kitchen sink. And the Islamic Republic retaliates with 200 missiles, firing while Iran’s airspace is open. They’re all fanatic criminals with no regard for human life.”
Shabnam’s friend, Sadra, enters the conversation. “The world revolves around power. If you can, you do. And that’s not changing anytime soon.” Sadra is 34 and out of work. “Humanitarian law is obsolete in times of war. So are the institutions tasked to preserve it. But that’s all we have for now. What I think is really dangerous is for rogue states like Iran and Israel to undermine the UN or its watchdogs because they don’t like their rulings or findings.” We’re nearing a “complete dog eat dog” world order, he fears.
Around me, I see people growing less indifferent to the situation in the Middle East. More are becoming wary—or at least more alert. As conflicts that once felt distant inch closer to home, many are increasingly attuned to words like displacement and famine.
A few days after Nasrallah was killed, I asked my 70-year-old neighbor if he was worried about a potential war. “There won’t be a war because the Islamic Republic is afraid of war,” he said with no detectable hint of humor. I asked him again the day after Iran fired missiles at Israel. “I stand by my word dear: there won’t be a war,” he replied. Time might prove him right. But for now, most here would tell you he’s wrong.