Fifteen key household items had increased in price by an average of 12% in just one month, a recent analysis by Iran International found, exposing a stark gap between official inflation figures and the reality faced by consumers.
The sanctions announced on February 24 followed similar measures by the US Treasury in late 2024, targeting ultra-large crude carriers in Iran's shadow fleet.
Such vessels, widely referred to as VLCCs, or very large crude carriers, can carry up to 2 million barrels of oil, far more than what a normal or large tanker can carry.
The VLCCs are essential for Iran's oil shipment, hence their targeting by the US Treasury since October last year.
With the latest US sanctions imposed by the Trump administration, nearly two-thirds of the 126 VLCCs shipping Iranian oil have now been blacklisted, according to oil tanker tracking data, forcing a significant number to abandon Iran and turn to transporting Russian oil.
Trump administration’s long road
Although stricter sanctions have complicated oil transportation for Iran’s VLCCs, claiming that Iran’s oil exports will face severe disruption and a catastrophic decline would be an exaggeration.
United Against Nuclear Iran (UANI) has identified 503 tankers with a combined capacity of 61 million tons of oil (over 350 million barrels), but sanctions currently cover less than 45% of this total capacity.
An investigation by Iran International shows that to maintain an average daily oil transit of 1.3 million barrels, as observed in recent months, Iran needs 45 VLCCs. Currently, 47 VLCCs linked to Iranian oil smuggling remain unsanctioned.
Meanwhile, dozens of VLCCs worldwide have surpassed 20 years of age in the past year, with each valued at an average of $25 million. Operators of the shadow fleet could potentially purchase some of these aging vessels. Notably, the number of foreign tankers involved in smuggling Iranian oil has surged sevenfold over the past five years.
In January 2024, China banned sanctioned tankers from docking at Shandong Port, its largest terminal for Iranian crude imports, causing Iranian oil offloading to drop to 850,000 barrels per day. However, a recent policy shift privatized part of the port, facilitating the reception of sanctioned crude cargoes. As a result, Iranian oil discharges in China surged to over 1.7 million barrels per day in February, according to industry intelligence firm Kpler.
Thus, it appears that the US still has a long road ahead to achieve what Treasury Secretary Scott Bessent described as a “90% reduction goal” in Iran’s oil exports.
Previously, several oil tanker tracking companies, in interviews with Iran International, estimated that Iran’s daily oil exports could drop by one-third in the coming months. However, they all agreed that such a scenario depends entirely on China's cooperation with the US.
Iran’s Difficult Situation
While foreign energy analysts and media mostly focus on Iran’s oil export volumes, the most critical issue for Iran—and especially for the US—is its oil export revenue.
Oil tanker tracking data from recent months indicate that Iran’s export volume has declined by around 25%. However, Iran’s domestic financial data suggests that its oil revenue has been cut in half, dropping below $1.8 billion per month.
This clearly highlights the soaring costs Iran has incurred to bypass US sanctions in recent months.
Meanwhile, Masoumeh Aghapour, an economic advisor to Iran’s president, acknowledged the country’s severe foreign currency shortages on February 25, just a day after the latest US sanctions targeted oil-related companies and tankers.
“We have a currency problem. Let’s be frank. Trump has played a major role in our forex market. The situation has become exponentially more difficult for us in the past two weeks,” she said.
Since early September, Iran’s national currency, the rial, has lost half of its value due to setbacks in the region and Trump’s election, as he has pledged to significantly cut Tehran’s oil exports.
Despite government statistics indicating a food inflation rate of 26.6% and an overall inflation rate of 32%, supermarket prices have risen far beyond these numbers, leaving many Iranians struggling to afford basic goods.
Supermarket prices have surged beyond what official reports indicate, leaving many citizens once considered middle class struggling to maintain their previous standard of living.
“We have stopped buying many things we used to consider normal, like nuts or even good quality rice,” said Mansour, 52, a resident of Tehran, who used to work in the banking sector but now finds his salary insufficient. “My children don’t understand why we’ve cut back so much.”
The economic crisis, which was once felt primarily by low-income families, has now engulfed middle-class households as well.
The Iranian rial has depreciated by more than 50% since September, falling to approximately 940,000 rials per US dollar. The collapse, combined with persistently high inflation—averaging around 40% annually over the past five years—has left many struggling to afford basic needs.
Official numbers versus market reality
Iran’s Ministry of Labor bases annual salary increases on official inflation figures, but market prices have consistently outpaced these statistics. A recent analysis by Iran International found that 15 key household items had increased in price by an average of 12% in just one month.
After cooking oil prices soared in December and potatoes became significantly more expensive in January, February has seen a sharp rise in the cost of legumes—some doubling in price within two weeks.
A survey of grocery prices in major cities, including Tehran, Mashhad, Isfahan, and Tabriz, found that household consumption costs had risen between 22% and 360% in the past week, with an average increase of 150%.
A 500-gram pack of tea, which cost 2 million rials ($2.13) last year, is now 4.6 million rials ($4.89).
Dairy products have also seen sharp increases. While official statistics report a 24% year-on-year inflation rate, market prices suggest much higher hikes.
A bucket of yogurt, which was 500,000 rials ($0.53) last year, now costs 760,000 rials ($0.81)—a 52% increase.
A 24-pack of toilet paper, once priced at 1.78 million rials ($1.89), now costs 3.93 million rials ($4.18), marking a 121% surge.
Families' statements about the price of various types of powdered milk also show that in February this year, the price of this essential product for infants has increased by 150 to 200 percent compared to the same time last year.
Rent and housing costs keep soaring
Inflation has also made housing less affordable. The Statistical Center of Iran reported a 37.6% increase in rent prices last month, but a nationwide survey by Iran International suggests that rents have risen by an average of nearly 78% over the past year. Many tenants have been forced to downsize or move to less expensive areas.
A resident of Tehran’s Yousef Abad neighborhood, who previously paid 240 million rials ($260) per month in rent, had to move to a smaller apartment due to rising costs. “I now pay 400 million rials ($430) a month for a place that is 10 square meters smaller,” he said.
While low-income citizens have long struggled with inflation, the economic crisis has now eroded the financial security of middle-class families. Many have reduced their spending on non-essential goods, and in some cases, even food quality has suffered.
With average monthly incomes now at just $120, while basic living costs exceed $500, over 30% of the population has fallen below the poverty line.
