Iran Faces Economic Struggles Amid Military Challenges
DUBAI, United Arab Emirates — Iran is grappling with significant economic turmoil coupled with pivotal military setbacks in the Middle East. The situation is poised to deteriorate even further as President-elect Donald Trump prepares to return to the White House, reinstating his “maximum pressure” approach towards Iran.
In response to both internal and external pressures, Iran initiated an atypical two-month military exercise last week. This includes air defense tests near a crucial nuclear facility, as well as military activities in vital shipping routes that are essential for global oil transport.
The display of military strength appears to be a strategic move to assert dominance, although skepticism regarding Iran’s capabilities persists following a year of significant losses.
The ousting of Syrian President Bashar Assad in December, whom Iran had supported financially and militarily, dealt a severe blow to what Iran considers its “Axis of Resistance” in the region. This axis has already been weakened by Israeli military actions against Iranian-backed groups like Hamas and Hezbollah, alongside direct attacks on Iran itself.
A hard-hitting statement from an Iranian Revolutionary Guard general highlights the situation. General Behrouz Esbati expressed remorse about the loss of Syria, claiming, “We lost. We badly lost. We blew it,” during a speech that was later circulated in the media.
Domestically, Iran’s economy is under severe strain. The United States and its allies persist with stringent sanctions to prevent Iran from nuclear weapon development; however, recent diplomatic efforts by Iran to lift these sanctions have faltered. The air quality in Tehran has worsened due to power plants burning low-quality fuel to manage winter demands, while families are increasingly struggling due to the Iranian rial’s plummeting value against the U.S. dollar.
As these socioeconomic challenges escalate, the potential for political unrest looms, as seen in previous nationwide protests regarding women’s rights and the poor economy.
How Trump intends to approach Iran remains uncertain. However, he hinted at the possibility of the U.S. conducting preemptive strikes on nuclear facilities, where Iran’s uranium enrichment is nearing weapons-grade levels.
“It’s a military strategy,” Trump stated during a press conference at his Mar-a-Lago resort, emphasizing that he would not disclose further details on military strategies.
Iran maintains that its nuclear program is for peaceful purposes, yet official discourse suggests a growing willingness to consider the pursuit of a nuclear arms program.
European leaders are also reevaluating their stance on Iran. French President Emmanuel Macron articulated that Iran poses a significant strategic and security challenge, raising alarms over the rapid advancements in its nuclear program and ballistic capabilities that threaten European interests.
Previously, Europe had been seen as more favorable towards Iran, but its position has shifted considerably, primarily due to Iran’s noted military support of Russia amidst the ongoing conflict in Ukraine.
France, Germany, and the United Kingdom, which were signatories to the 2015 nuclear agreement, are now characterizing Iran’s nuclear pursuits as “nuclear escalation,” which may lead to calls for reinstating U.N. sanctions. Such measures, known as a “snapback,” could have devastating effects on the Iranian economy as the expiration of this power is set for October.
Additionally, Iran’s recent release of Italian journalist Cecilia Sala, who had been detained for three weeks, followed the arrest of an Iranian engineer in Italy, accused of supplying drone technology linked to an attack on U.S. forces.
In light of growing tensions, the series of military drills by Iran’s armed forces and the Revolutionary Guard aims to project an image of resilience against potential attacks from the U.S. and Israel.
Iran conducted air defense exercises around its underground enrichment facility in Natanz, asserting its capability to intercept advanced bombing attacks designed to target such sites. However, the drills notably did not utilize any of the S-300 air defense systems, which reportedly sustained damage during Israeli strikes.
Kenneth Katzman, a veteran analyst on Iran, suggested that U.S. and Israeli hesitation regarding military action against Iran’s nuclear program is waning, implying that the Trump administration might permit Israel to proceed with strikes on Iranian installations.
Iran may also resort to alternative forms of military response. Upcoming naval drills in the Persian Gulf and the Strait of Hormuz are planned, an area through which a significant portion of global oil transportation occurs. Iran has previously threatened to obstruct shipping routes and has engaged in attacks on oil tankers in the region since 2019.
Ambrey, a private maritime security firm, predicts that harassment and seizures could remain Iran’s primary methods of counteraction. However, the support from its allies might wane, given the reduced frequency of Houthi attacks on shipping lanes and increasing doubts about Russia’s reliability in the ongoing geopolitical landscape.
Amidst these developments, General Esbati’s comments also suggest frustrations with Iran’s missile capabilities and foresee potential U.S. retaliations in response to attacks on American bases in the region. He indicated that escalating military operations would not be in line with the interests of Iran’s resistance efforts at this time.
