$1 = 1,400,000 Rials: How Will Iran Survive U.S. Pressure Amid Economic Turmoil?

Iran has been facing widespread protests over the past few weeks, with reports suggesting that over 500 demonstrators have been killed during government crackdowns. At the same time, the country is under the looming threat of U.S. military action, raising serious concerns about its fragile economy.

Currency Collapse and Inflation

Iran’s primary source of revenue is crude oil, yet Western sanctions have severely restricted its ability to sell abroad. The Iranian rial has plummeted dramatically; while one Indian rupee equals around 11,000 rials, the U.S. dollar is now valued at 1.4 million rials. In comparison, during the 1979 Islamic Revolution, $1 was worth roughly 70 rials, marking a staggering 20,000-fold depreciation of the currency over the decades.

Protests have been fueled by this currency collapse and rising inflation. The government blames international sanctions, but demonstrators hold the country’s leadership responsible for the economic crisis.

Economic Structure

Iran’s economy is dominated by the Islamic Revolutionary Guard Corps (IRGC) and affiliated religious organizations, which control large swaths of industry without transparency or tax compliance. The IRGC influences key sectors including manufacturing, energy, ports, and telecommunications, acting as a parallel power center with both military and economic clout.

The country’s industrial revenue largely depends on oil exports, but sanctions force Iran to sell its crude through indirect channels, including shadow fleets, offshore storage, and ship-to-ship transfers at sea, often at discounted prices to attract buyers. This reduces the revenue Iran earns per barrel.

Poverty and GDP

According to Iran Open Data, Iran earned about $23.2 billion from oil exports in 2025, whereas legally it could have fetched over $28 billion. The World Bank estimates that between 2011 and 2020, sanctions contributed to an average annual decline of 0.6% in per capita GDP, pushing roughly 10 million Iranians into poverty. The share of Iranians living below the international poverty line increased from 20% to 28.1% during this period.

Iran’s GDP composition is as follows: services – 47%, industry – 40%, and agriculture – 12.5%. Experts warn that if the U.S. takes military action, Iran’s economy—projected to shrink to $356.5 billion in 2025—would struggle to endure for long. Its defense budget is just $9.9 billion, while the U.S. maintains the world’s largest economy with a $1.5 trillion defense budget, according to President Trump.

Outlook

With sanctions, currency collapse, and domestic unrest, Iran faces a severe economic crisis. Analysts say that unless sanctions are eased or diplomatic solutions emerge, the country’s ability to withstand both internal protests and external military pressure remains extremely limited.