Over five weeks of aerial bombardment, American and Israeli warplanes struck thousands of industrial sites across Iran, inflicting damage that now cascades through every layer of the economy. In Kashan, the historic heartland of Iran’s famed carpet industry, manufacturing has largely ground to a standstill. Dairies cannot secure adequate packaging for milk and butter. Steel complexes that once powered the nation’s non-oil exports have fallen silent. The human toll is beginning to surface in stark figures: Deputy Labor Minister Gholamhossein Mohammadi, cited by state media, put direct war-related job losses at a minimum of one million. Hadi Kahalzadeh, an Iranian economist and research fellow at Brandeis University, estimates that ripple effects jeopardize the livelihoods of 10 to 12 million workers, nearly half the country’s labor force.
The strikes were officially aimed at the industrial infrastructure of Iran’s paramilitary Revolutionary Guard, but their reach extended significantly further. Kahalzadeh calculates that roughly 20,000 factories — about 20% of Iran’s production units — sustained damage. Among the facilities hit were Tofigh Daru, the country’s largest pharmaceutical holding, which manufactures anticancer medications; optics and chemical developers; and producers of aluminum and cement. The most consequential wave of attacks, occurring just before the April 8 ceasefire, crippled Iran’s two premier steelmakers, Mobarakeh Steel and Khuzestan Steel, alongside smaller mills. More than 50 petrochemical complexes have also been forced to shut down, according to the semi-official Jamaran news agency. These twin pillars of non-oil exports sustained extensive disruption, with knock-on price surges spreading through plastics, pipes, fabrics, and food packaging.
At a household level, the cost of living is spiraling sharply. The price of chicken has climbed 75% in a single month; beef and lamb have risen by 68%; many dairy products have seen increases of half. Such pressures erupted earlier into the mass protests of January — initially triggered by inflation before transforming into broader calls for systemic change — and officials are acutely aware that sustained economic misery could again propel Iranians into the streets.
Yet the economic wound is not solely a product of direct strikes. A near-total internet shutdown, imposed since the protests, has gutted small and medium-sized enterprises dependent on online commerce. Even before the U.S. naval blockade took hold, Iranian attacks on the United Arab Emirates — a trading partner that previously supplied around one-third of Iran’s imports — prompted the UAE to sever trade ties. The cumulative effect has rippled outward. In Kashan, roughly 80% of carpet and rug manufacturers have ceased operations. The son of a rug factory owner, speaking anonymously for his family’s safety, described his father, a veteran of the trade, as more distressed than he had ever witnessed. Exports have collapsed and domestic purchases are near zero, he said, while synthetic fiber prices have leaped by 30% to 50%, a downstream consequence of damage to petrochemical plants.
The same distress echoes across other sectors. Mehdi Bostanchi, who owns a ventilation and air conditioning factory as well as a household fan producer employing more than 1,130 workers combined, said his HVAC operations have been hit hard by paralysis in the construction sector. New building projects are largely suspended, and the price of iron sheeting has more than doubled. As a member of a council representing Iranian industrialists, he observed that virtually all domestic industries depend in some way on the petrochemical complex, either directly or through contracting chains. A chemical engineer working at a major private construction contractor reported that his firm dismissed half of its 180 headquarters employees and was forced to abandon a project tied to Mobarakeh Steel, eliminating 1,000 jobs. Another professional, a Tehran-based consulting engineer, described himself as being in the top one percent of society yet facing sudden unemployment. He voiced acute worry about his future, noting that savings would begin to drain in the weeks ahead.
Washington’s blockade, designed to choke off Iran’s oil exports and deny it billions in revenue, compounds this fragility. Iran sold roughly $98 billion in exports in 2025, just under half of which derived from petroleum. A complete blockade is logistically challenging: around half of Iran’s non-oil trade moves overland or through ports on the Caspian Sea, according to Esfandyar Batmanghelidj, who leads the Bourse and Bazaar Foundation, a research group focused on economic development in West and Central Asia. In that same analysis, Batmanghelidj detailed the reserves Iran has accumulated to insulate itself. At the close of 2025, the country held sufficient electrical machinery for nearly eight months, cement stocks to last almost six months, and steel and iron supplies for roughly four months. Such inventories could theoretically be extended further through rationing.
This preparedness stems from decades spent constructing an economy designed to function under international sanctions. Iran’s leaders are wagering that this capacity for endurance will allow them to absorb more pain than their American adversary, who faces domestic political pressure from rising fuel prices and the broader global economic reverberations of the Strait of Hormuz’s closure. The strategic calculus in Tehran involves maintaining a chokehold on the strait until the U.S. lifts its blockade and hostilities formally conclude.
Even those with a stake in the country’s industrial future sound cautious notes about what recovery might require. Bostanchi expressed belief that the Iranian economy could rebound once the fighting stops, but he tied the outlook to a political variable: the fate of international sanctions. Without securing their removal through any peace agreement, he warned, “the optimistic forecast will not happen.” In the interim, officials are attempting to project resilience, promising to expand unemployment insurance even as the social security system’s own funding base — heavily reliant on its stakes in the very petrochemical and industrial firms now shuttered — comes under severe strain. The gamble for Iranian leaders is that their population, and the economic architecture built to absorb decades of external pressure, will endure longer than the resolve of the White House.