Iran International
Iran’s economic crisis is deepening, and with few answers for a population becoming poorer, Tehran is signaling how it may respond if economic anger again spills into the streets: repression and lethal force.
Judiciary chief Gholam-Hossein Mohseni-Ejei has threatened an even harsher crackdown on another uprising. Leaked Basij audio has exposed anxiety inside the security establishment, while authorities have identified gasoline, unemployment and livelihoods as potential triggers.
Security forces have already opened fire on people protesting over jobs in southwestern Iran this week.
“The economic crisis in itself is turning Iran into a powder keg,” Khosro Isfahani, research director at the National Union for Democracy in Iran (NUFDI), told Iran International.
Fixing the conditions driving the anger would require the state to change into “something that is fundamentally not the Islamic Republic,” he said, adding that Iran’s rulers are willing to “kill as many as it takes to stay in power.”
At least 950 people have been executed since the beginning of the year. Not all were political prisoners, but the accelerating use of capital punishment has added to a wider climate of fear.
The same pattern can be seen in a renewed crackdown on compulsory hijab, cafe closures, pressure on workers and pensioners and the deployment of police onto the streets.
‘Damaged fruit’
And there is little economic relief in sight, with fewer and fewer families able to afford meat, fruit or even dairy products.
Economist Ali Dadpay points to damaged fruit, once sold cheaply to the poorest or left for the homeless, as an increasingly common measure of what many families can afford.
For decades, the Islamic Republic has sought to blame economic hardship on sanctions, foreign powers, merchants or individual officials. But Dadpay says it is becoming harder to separate what Iranians experience in the supermarket from the decisions made by the state.
Inflation, he said, has become “the perfect indirect taxation.”
Instead of openly raising the money needed to finance its policies, Tehran prints it. The rial loses value and ordinary Iranians pay the difference every time they buy food, medicine or other necessities.
They have been made “poorer and poorer and poorer,” Dadpay said, and are now in danger of being “permanently impoverished.”
Middle class no more
The deterioration is reaching people who once considered themselves middle class. Pensioners are protesting. Even some government-linked companies are struggling to pay wages that barely cover basic living costs.
“Even the middle class cannot afford,” Dadpay said.
And winter threatens to tighten the squeeze.
Gasoline is already in short supply. Mahdi Ghodsi, senior economist at the Vienna Institute for International Economic Studies, estimates Iran has lost 15% to 30% of its energy-production capacity through war damage and depreciation.
As temperatures fall, factories may have to shut down so scarce gas can be redirected to households.
Transport workers would be among those hit by worsening fuel shortages, with disruptions potentially spreading quickly through the wider economy.
‘Fragile calm’
Miad Maleki, a former senior US Treasury sanctions strategist and senior fellow at the Foundation for Defense of Democracies (FDD), says the regime is looking at the same deteriorating numbers as everyone else.
“To keep paying salaries and pensions to roughly eight million state payees, including its own security forces, the regime has been printing rials and borrowing directly from the central bank,” Maleki said.
“Ejei’s threat tells you they know how fragile that is.”
Dadpay points to Venezuela and Zimbabwe as reminders that governments can survive extraordinary economic deterioration. Money can be printed, salaries can be deposited and the machinery of the state can continue operating even as the population becomes dramatically poorer.
“Yes, it works,” Dadpay said. But what it produces is “a miserable impoverished situation.”
Iran’s rulers learned in November 2019, however, how quickly the calculation can change. A sudden gasoline price increase led to spontaneous protests that Tehran crushed with lethal force.
‘Revolutions are not advertised’
Inflation is easier to disperse. It quietly takes purchasing power from millions of people without creating a single moment around which they can mobilize.
The danger for Tehran comes when that diffuse suffering suddenly becomes concrete: an empty gas station, a bread shortage, a missed salary, a delayed pension or another sudden price decree.
That is when, Maleki said, scattered grievances can acquire “a single address and a single date.”
But there is another calculation now: fear.
Iranians have seen what happens when they confront the state. Ghodsi said the expected cost of taking to the streets has become enormous because people know they could be shot or killed.
And yet, he said, “society is boiling.”
What changes that calculation may ultimately be impossible to forecast. Ghodsi believes it could take an unpredictable shock. Isfahani looks for something even less measurable: the image, death or act of defiance that suddenly turns private anger into a collective cause.
Mahsa Amini became such a moment in 2022. Isfahani said he has not seen an equivalent tipping point yet. “It’s never about number,” he said.
He quoted his late father: “Revolutions don’t advertise their time of arrival. They arrive.”
The Islamic Republic may not know when, or whether, scattered economic grievances will converge into another uprising. But its threats, preparations and response to smaller protests are already showing how it intends to confront one.
Global News identified him as Mohammad-Reza Ghafouri-Fard, a 45-year-old Edmonton resident who has done business in Canada under the name Sal Ghafouri and whose father, HassanGhafouri-Fard, was a conservative Member of Parliament and former vice-president to Akbar Hashemi Rafsanjani.
Citing a recently declassified Canadian Security Intelligence Service (CSIS) report, Global News said Ghafouri had been the subject of a long-running investigation over his alleged work for Iran’s military and the Islamic Revolutionary Guard Corps.
According to the report, CSIS said Ghafouri was “involved in the research and development of Iranian military technologies” and allegedly helped develop a guided anti-aircraft missile system and an electronic warfare tool intended to counter US aircraft.
The report said CSIS also alleged that Ghafouri participated in a “covert procurement structure” that used a company in Southeast Asia to obtain components for Iranian military projects that were unavailable because of sanctions.
Government contracts
Global News said public records showed companies founded by Ghafouri received more than $2 million in government contracts, including from the Royal Canadian Mounted Police and Department of National Defence.
The report said Ghafouri had been flagged by immigration investigators for national security reasons in 2017 but later won procurement contracts, including two worth more than $1.5 million from the Canadian military. His companies continued receiving federal money after CSIS completed its security screening report in 2023, it said.
Alleged military work
Ghafouri worked for Iranian company Rabi Kosar, which CSIS described as conducting research and development for Iran’s military.
According to the CSIS report, Ghafouri worked on the Shahin missile used in Iran’s Mersad air-defense system, the RAAD electronic warfare project and the SINA direction-finding system, which had military applications including locating ships in the Persian Gulf.
CSIS alleged Ghafouri was later reassigned to procurement work, where requirements for military components were passed to a Malaysia-based contact who sourced parts from third countries, including the United States.
Ghafouri returned to Iran in 2015 and met twice with members of Iran’s Ministry of Intelligence and Security, who questioned him about his activities in Canada and advised him on how to respond if approached by Canadian police or intelligence services.
Citizenship case
Global News said Canada’s immigration department informed Ghafouri in May 2026 that it was launching proceedings to deny him citizenship on the grounds that he was a “threat to the security of Canada.”
Canada Border Services Agency had separately decided to launch deportation proceedings against him over his employment activities in Iran but withdrew the case in November because of an “inability to use the required evidence.”
His lawyer, Bjorna Shkurti, told Global News that Ghafouri “strongly disputes the allegations made against him” and intends to pursue all available legal avenues.
Global News said Ghafouri is also pursuing legal action over delays to his citizenship application and has argued in court filings that he answered CSIS questions truthfully, contributed significantly to Canada and does not pose a security threat.
The program, codenamed C430L, began in 2023 and continued during this year's war with the United States and Israel, the FT said.
Its main focus is a ramjet propulsion system that would allow a cruise missile to sustain flight at several times the speed of sound, reducing the time available for US and allied defenses to detect and intercept it.
“For the Iranians, this would give them a qualitatively new strategic weapon system that could threaten US Navy vessels,” Jim Lamson, a former CIA military analyst focused on Iran, told the FT.
Iran has built and flight-tested the propulsion system, but there is no evidence that a Russian-assisted supersonic cruise missile has entered service, the newspaper said.
Russian technical support
The FT said Russia's state arms exporter Rosoboronexport arranged the program with missile developer NPO Mashinostroyenia.
Russian engineers made repeated trips to Iran before a contract was signed with Iran's Ministry of Defense and Armed Forces Logistics in November 2023, according to records reviewed by the newspaper.
By 2025, Russian specialists were analyzing Iranian flight-test data and advising Tehran on the ramjet's fuel system, combustion stability, air intake and engine nozzle.
“This is the transfer of a highly strategically sensitive military technology from Russia that the Iranians have wanted to acquire for decades,” Fabian Hinz, a senior analyst with Conflict Armament Research, told the FT.
“A programme like this would require political clearance from the very top in Russia,” he said.
The Kremlin, Rosoboronexport, NPO Mashinostroyenia and the Iranian government did not respond to requests for comment from the FT.
Potential naval impact
Supersonic cruise missiles combine high speed with low-altitude flight, making them harder for air and missile defenses to detect and engage quickly.
That could be particularly significant in the Persian Gulf, where the United States and its regional allies operate advanced land- and sea-based defenses.
Hinz said Russian engineering support could be especially valuable because it would help Iran solve technical problems rather than simply provide finished weapons.
“Getting a 60-year-old engineer to fly over and problem-solve, using their experience, is hugely valuable,” he said.
The FT said the program continued into 2026, with Russia preparing technical reports and both sides discussing a further phase of development.
A June 2026 Rosoboronexport letter showed talks were still under way over that next stage, though it was unclear whether it had begun.
Deeper military ties
The program points to a deeper form of military cooperation between Moscow and Tehran, with Russia helping Iran acquire the know-how to develop an advanced weapon system of its own.
Iran previously supplied Russia with Shahed attack drones used in Ukraine and helped Moscow establish domestic production.
The FT has also reported that Russia agreed to supply Iran with Verba shoulder-fired air defense systems, while Tehran acquired a high-resolution Chinese satellite later used to monitor US military facilities in the region.
“If the Russians are able to help the Iranians fix their technical problems, I think this would be one of the more impactful areas of Russian military-technical assistance to Iran in recent years,” Lamson said.
