Iran's economy buckles under strikes as leaders hold out for Trump to blink

Five weeks of U.S. and Israeli airstrikes have damaged roughly 20,000 Iranian factories and put at least 1 million people out of work, yet Iran's leaders are betting their grip on the Strait of Hormuz will force President Donald Trump to negotiate first, the Korea Times reported.

The economic toll — threatening to idle half of Iran's entire workforce — represents what economists describe as an unprecedented collapse of industrial capacity, with consequences already rippling through global energy markets and commodity supply chains.

The strikes, which ostensibly targeted Iran's paramilitary Revolutionary Guard, have shut down more than 50 petrochemical complexes and halted production at the country's two largest steel producers — Mobarakeh Steel and Khuzestan Steel — according to the Korea Times. Factory owner Mehdi Bostanchi, a member of Iran's industrialist council, said "all the country's industries in some way rely on our petrochemical industry."

Iran's Deputy Labor Minister Gholamhossein Mohammadi confirmed at least 1 million direct job losses, but the Korea Times reported that economists warn cascading supply-chain failures could put 10 to 12 million additional positions at risk — roughly half the country's labor force. White-collar workers have not been spared. A Tehran consulting engineer told the Korea Times: "I am at the top 1 percent (of society), and I am without a job. I am super worried about my future."

Consumer prices have spiked sharply. Chicken rose 75 percent in a single month; beef and lamb jumped 68 percent and dairy products increased 50 percent, the Korea Times reported. In Kashan — the historic center of Iran's carpet trade — 80 percent of manufacturers have ceased operations. The son of one factory owner told the Korea Times the city "relies on the rug industry and unfortunately it's been crippled."

Construction has been pulled into the collapse. "Construction is facing a massive shock," Bostanchi said, pointing to severed steel supply chains. Any recovery, he cautioned, hinged on concessions that have yet to materialize: "If we cannot lift the sanctions in any agreements, then no, the optimistic forecast … will not happen," he told the Korea Times.

Despite the devastation, Iranian leaders are holding firm. The government said it had stockpiled eight months of electrical machinery, six months of cement, and four months of steel and iron as of the end of 2025, according to the Korea Times. Tehran is threatening to close the Strait of Hormuz — a chokepoint for roughly one-fifth of global oil — unless international blockades are lifted and the fighting stops, calculating that Washington will move first.

Hadi Kahalzadeh, an Iranian economist and research fellow at Brandeis University, told the Korea Times that meaningful recovery cannot begin without sanctions relief — a condition that, as both sides hold their positions, shows no sign of materializing soon.