Iran demands war compensation from five regional states

In a stark assessment delivered to the president in recent days, senior economic officials said the damage inflicted during the 40-day war with the United States and Israel—combined with Iran’s already fragile economic situation—could take up to 12 years to repair.

Several major airports were damaged during the conflict, while strikes also targeted oil facilities, refineries and petrochemical installations that are central to Iran’s export revenues and industrial supply chains.

Officials involved in the discussions warned that the destruction of production capacity could trigger a sharp surge in inflation in the coming months. According to the assessment presented to the president, inflation could reach as high as 180% if shortages of industrial inputs persist.

The same projections estimate that unemployment could rise by around two million people as factories, service providers and small businesses struggle to resume operations.

According to sources familiar with the discussions, central bank governor Abdolnaser Hemmati has been urging Pezeshkian to take urgent steps to stabilize the economy, including restoring full internet access and pursuing an agreement with the United States.

Tehran and Washington appear to be exploring the possibility of further talks following the one in Pakistan last weekend. Iranian economists have long argued that a diplomatic thaw and easing of sanctions could be the best path toward economic stabilization.

Iran has maintained a nationwide internet shutdown for weeks during the conflict, a move officials say was intended to counter cyber threats but which has also severely disrupted businesses that rely on global connectivity.

Iran’s digital economy accounts for roughly 5–6% of the country’s GDP, and the shutdown has cut off millions of entrepreneurs from customers, payment systems and online platforms.

Small businesses, freelancers and startup founders have been among the hardest hit. Many rely on services such as Instagram, messaging apps and foreign-hosted websites to reach clients.

Economists inside the government warn that prolonged restrictions could deepen the downturn and slow recovery even further.

The bleak economic projections have heightened concerns among members of Pezeshkian’s team, according to the sources.

Some officials fear that if the economic crisis worsens or the state faces financial collapse, powerful figures within the Islamic Revolutionary Guard Corps could seek to shift blame onto the president, they said.

Iran entered the war already under heavy economic strain from years of sanctions, high inflation and currency instability.

The heads of the International Monetary Fund, World Bank and International Energy Agency have warned that disruptions from the US-Israel war with Iran could lead to a prolonged period of high prices for critical commodities, including energy and fertiliser.

Fatih Birol, executive director of the IEA, said the damage to energy infrastructure across the region represents “the greatest energy security challenge in history.”

According to the agency, roughly one-third of the energy facilities it tracks in the region have been damaged during the conflict.

Birol also warned that global economic conditions could deteriorate further in April as oil supplies from tankers that were already in transit when the war began begin to run down.

The US aircraft carrier USS George H.W. Bush is sailing around the African continent toward the Arabian Sea, bypassing the Red Sea and the Bab el-Mandeb Strait, according to USNI News.

The carrier strike group has been operating off the coast of Namibia as it heads toward the Middle East to join a growing US naval presence tasked with blocking the Strait of Hormuz.

Two US defense officials told USNI News the carrier group chose the longer route around Africa rather than the usual transit through the Mediterranean and the Suez Canal.

The route avoids the Red Sea and the Bab el-Mandeb, waterways that saw repeated drone and missile attacks by Yemen’s Houthi movement on US and commercial shipping in 2024 and 2025.

US Vice President JD Vance signaled progress in talks with Iran, saying Washington had made “a lot of progress” and expects Tehran to move toward reopening the Strait of Hormuz.

Speaking to Fox News, Vance said further diplomatic movement now depends on Iran.

“The ball is in Tehran’s court,” he said, suggesting Washington is waiting for Tehran’s next step following the latest round of negotiations.

Vance also said the expectation was that Iran would make progress toward reopening the strategic waterway, a key global oil shipping route whose disruption has unsettled energy markets.

China’s foreign minister Wang Yi said blocking the Strait of Hormuz would run counter to the interests of the international community, according to a statement from his office after talks in Beijing with a senior UAE envoy.

Yi said Beijing understands the “legitimate security concerns” of Iran's Arab neighbours and supports the UAE in safeguarding its sovereignty, security and national interests, the Chinese Foreign Ministry said.

Addressing the US-Iran conflict, Wang called for “a comprehensive and lasting ceasefire” to be achieved through political and diplomatic means.