Iran’s unrest entered a ninth day on Monday 5 January after demonstrations began on Sunday 28 December, initially as shop closures and marches around Tehran’s commercial districts. The United States has issued unusually direct public warnings during the protests; President Donald Trump said on 2 January that the US was “locked and loaded” if authorities killed peaceful demonstrators. Reuters and Iranian rights monitors put the death toll at at least 17 so far, with incidents reported across multiple provinces.
The trigger is economic. The rial slid to record lows around 1.38–1.45 million per US dollar in the final days of December, prompting strikes at the Alaeddin and Charsou electronics markets and then the Tehran Grand Bazaar. Officials confirmed the Central Bank governor’s resignation as protests swelled in Tehran, Isfahan, Shiraz and Mashhad.
Official data show annual inflation at 42.2% in December, with point‑to‑point food inflation above 70%-figures consistent with the price rises driving grievances on the streets. Protesters’ economic slogans have rapidly shifted to political demands, including chants directed at Iran’s supreme leader.
Reporting conditions are constrained. Iranian and foreign journalists face legal threats, internet throttling and movement restrictions, pushing much of the evidence base onto social media and citizen footage that requires careful verification. The Committee to Protect Journalists and domestic watchdogs have documented convictions, summonses and intimidation against media workers through 2025.
Though smaller than the 2022 “Woman, Life, Freedom” mobilisation, this wave is geographically broad and more tightly coupled to immediate household economics. Rights groups say children are among the dead and injured. Authorities have used tear gas and live fire in some locations, according to local and international outlets.
Sanctions architecture has tightened since September. After European states invoked the JCPOA’s snapback clause, the UN Security Council declined to continue sanctions relief, reimposing UN measures; the EU restored its own nuclear‑related restrictions days later. Washington has layered additional actions against Iran’s “shadow fleet,” banking conduits and procurement networks.
That framework interacts with domestic governance. Economists inside Iran argue that opaque trade channels have created “sanctions profiteers,” enriching politically connected actors and worsening price shocks for households. US Treasury and FinCEN advisories similarly describe parallel payment systems routing oil revenue via front companies in the UAE, Hong Kong and elsewhere.
Regional dynamics compound the pressure. The June 2025 Iran–Israel fighting ended under a US‑announced ceasefire after US forces struck Iranian nuclear sites in “Operation Midnight Hammer”; Iran retaliated with missiles at Al Udeid Air Base in Qatar. Israeli operations have also degraded Hezbollah’s senior ranks. These events have strategic and fiscal consequences for Tehran.
Tehran’s external alliances are also thinner. Syria’s government fell on 8 December 2024, removing a long‑standing partner and supply corridor; subsequent US‑mediated security talks between Syria and Israel underscore a changed map. France and others recognise a Syrian transitional authority, while security conditions remain fragile.
Developments in Venezuela further reduce financial headroom. On 3 January 2026 US forces captured Nicolás Maduro and Cilia Flores; legal proceedings began in New York. Concurrently, Venezuela’s sanctioned oil exports continue in “dark mode,” and China‑linked trade remains significant-routes historically linked to Iran’s evasion playbook.
At home, President Masoud Pezeshkian has paired calls for dialogue with targeted relief, announcing a monthly electronic grocery credit for lower‑income families, while security organs signal a tougher line. Ayatollah Ali Khamenei has urged that “rioters” be put “in their place,” indicating limited tolerance for sustained street action.
What this means in practice: risk premia on Iranian exposure are likely to rise, with currency volatility, import restrictions and intermittent connectivity disruptions affecting trade, compliance and humanitarian operations. The trajectory depends on three moving parts-exchange‑rate stabilisation, the scope of force used domestically, and whether the US follows rhetoric with additional military or sanctions measures.