Senior Research Analyst, NUFDI
Tehran’s approach to diplomacy may be best summed up by a Persian phrase: refusing with one hand and accepting with the other. But does the moribund economy show that the equivocating strategy has finally run out of road?
In Iran, the term “guaranteed purchase of wheat” refers to a government program whereby the Government Trading Corporation (GTC) commits to buying wheat from domestic farmers at a pre-established, fixed price.
The government says the policy shields farmers from volatile market prices and ensures a stable income by offering a predictable price while also enabling the government to manage reserves of the staple crop and guarantee supply.
However, state-guaranteed purchases had dropped to 700,000 tons, Attaollah Hashemi, head of the National Wheat Farmers Foundation, told ISNA news agency on Thursday.
'Risks ahead'
“This year’s guaranteed purchases have decreased by 35 percent compared to last year, a decline that is a direct result of reduced production caused by drought and insufficient rainfall,” he said.
The government still owes some farmers payments for wheat deliveries but promised settlement soon, Hashemi added. He warned that “reliance on wheat imports could bring serious risks for the country.”
According to US Department of Agriculture data, the country's wheat production for the 2024/25 season is projected at around 16 million metric tons.
Despite these figures, Iran’s import needs can vary: the FAO projects wheat import requirements for the 2024/25 marketing year (April–March) at 1.3 million tons.
However, due to drought-induced production shortfalls, imports are expected to rise in the current calendar year to about 4.5 million tons, according to state media.
Water crisis
Agriculture Minister Gholamreza Nouri Ghezaljeh recently described the situation as unprecedented. “From the perspective of food security, we are in the most difficult circumstances,” he said, citing poor economic conditions and what he called the worst droughts in memory.
Production had fallen by 35 to 40 percent due to energy shortages and irrigation problems, Ghadamali Bourbour, deputy head of the Wheat Farmers Foundation, said in late August.
“This decline is rare in Iran’s agricultural history,” he said, adding that the trend would also push up dairy and meat prices.
Despite repeated water cuts across cities, official data show that 80 to 90 percent of Iran’s consumption still goes to agriculture, much of it under traditional methods.
With procurement falling and drought intensifying, the government faces rising pressure to reform or risk deeper food insecurity.
“The policy of Moscow and Beijing, which consisted of fairly mild condemnations of the Israeli and US strikes in Iran, sparked criticism and disappointment in Tehran," a research paper from the Institute of National Security Studies (INSS) said.
“It also reinforced the Iranian assessment that its reliance on Russia and China remains limited, particularly in the event of a military confrontation with Israel and the United States," the report by Danny Citrinowicz and Raz Zimmt added.
The 12-day war, initiated by a surprise campaign of Israeli strikes and assassinations on June 13 which killed senior military figures and nuclear experts, saw Iran fighting both Israel and the US, while China and Russia resisted involvement.
The US struck Iran's three biggest nuclear facilities while Israel took control of Iran's aerial defense systems and destroyed swathes of military and nuclear infrastructure, along with civilian sites such as Evin Prison, leaving its foe much weakened.
Israel too suffered major blows with Iranian missile barrages which struck military and civilian infrastructure.
“It is clear that for now, Iran has no viable alternative to continuing its political, economic, and security partnership, as limited as it may be, with Russia and China, especially given the escalating tensions between Tehran and Europe,” the paper said, referring to the imminent threat of a snapback of UN sanctions due by the end of the month from Britain, France and Germany.
"Likewise, Russia and China, who view Iran as a junior partner in a coalition against the West and the United States, have no real alternative to Tehran, and they are expected to continue the partnership as long as it serves their interests,” the authors said.
Iran relies on China as its number one buyer of oil, and has deep ties with Russia militarily as a supplier of a kamikaze drone which has been key to Moscow's war effort in Ukraine.
A diplomatic tightrope
Iranian President Masoud Pezeshkian attended a major military parade in Beijing on Wednesday marking the 80th anniversary of Japan's surrender in World War II.
President Xi Jinping, flanked by Russian President Vladimir Putin and North Korean leader Kim Jong Un, used the parade to project China's military strength, and Pezeshkian appeared to be nearer the back of assembled heads of state.
“(China and Russia) would not hesitate to sacrifice Iran to advance important strategic goals, such as improving relations with Washington," the Israeli researchers added.
The paper noted that there was some caution in Iran's often raucous political discourse about directly criticizing the Eurasian allies.
“Circles identified with the conservative and hardliner wing of Iran’s leadership refrained from voicing similar criticism and instead expressed understanding of Russia and China’s conduct,” the paper said.
“For example, Yadollah Javani, the head of the political bureau of the Islamic Revolutionary Guards Corps, declared that Iran had not requested assistance from Russia or China during the war, emphasizing that the military cooperation agreement between Tehran and Moscow does not obligate Russia to support Iran in wartime.”
Condemnation from Beijing and Moscow
China's foreign ministry "strongly condemned" the Israeli and US strikes, urging de-escalation while Russia slammed them as "unprovoked and unacceptable" in a statement through the Russian state news agency RIA Novosti.
In March, the three nations carried out a joint naval drill in the Gulf of Oman, an annual drill the three allies performed in recent years as ties deepened.
“At the conclusion of Operation Rising Lion, pragmatic circles in Iran voiced criticism mainly at Russia and, to a lesser extent, China for refraining from providing assistance to Iran during the war and limiting themselves to condemning the Israeli and American strikes, especially given Iran’s significant military support for Russia since its invasion of Ukraine in February 2022,” the researchers said, echoing the fears in Iran itself of too much dependence on the two allies.
Britain, France and Germany last week triggered the so-called snapback mechanism which is due to reinstate UN sanctions by month's end, sending Iran’s fragile economy into a tailspin.
Iran’s currency, the rial, now trades at more than one million to the dollar, having lost nearly a third of its value since Donald Trump won the US presidential election last November.
Even the country’s private sector has sounded the alarm, but fast regretted it.
The Iran Chamber of Commerce—an institution run by business elites under heavy state oversight—published a report warning that UN snapback sanctions could spark a “deep crisis,” with inflation hitting 90 percent and GDP shrinking by three percent.
The report was swiftly deleted. Tasnim News, tied to the Revolutionary Guards (IRGC), blasted it as “dangerous and inflammatory,” saying it could fuel panic and speculative inflation.
Within hours, IRGC intelligence officers raided the Chamber, interrogated staff, and pressured the board into silence. It was yet another display of the regime’s instinct: shoot the messenger.
Official bravado
Government officials have chosen defiance over honesty.
Deputy Foreign Minister for Economic Diplomacy Hamid Qanbari declared that Iran’s “economy is so big and self-sufficient that it will not break under sanctions.”
Oil Minister Mohsen Paknejad admitted snapback could tighten restrictions on oil exports but boasted that “our hands are not tied.”
The message is meant for domestic consumption, but Iranians have heard it before: decades of promises that sanctions are survivable, even beneficial. Few believe it now.
Rial’s dead cat bounce
The rial’s collapse has not been a straight line.
On March 24 it hit a historic low of nearly 1.1 million to the dollar. But in April, as Tehran and Washington engaged in Oman-mediated nuclear talks, the currency clawed back 31 percent.
Officials convinced themselves they could entice the Trump administration into a deal that would preserve Iran’s nuclear leverage, maintain funding for regional proxies, and leave intact its growing missile and drone programs.
But surprise Israeli strikes on June 12 torpedoed the talks, upended markets and erased the rial’s temporary gains, initiating the next slide.
An economy in ruins
Iran’s economic woes go beyond currency freefall. Inflation and joblessness are grinding daily life, while water shortages, blackouts and environmental crises repeatedly halt basic activity.
Public anger simmers but has not so far erupted.
Meanwhile, Tehran’s military capacity has been gutted. Missile stockpiles are depleted, air defenses degraded, and armed allies from Gaza to Lebanon weakened by repeated blows. Once a symbol of strength, Iran’s arsenal is now a reminder of vulnerability.
And yet, the clerical establishment shows no sign of recalibrating.
Faced with looming UN sanctions, domestic crisis and international isolation, it clings to the illusion that a mix of propaganda, repression and tactical stalling can buy survival.
Talk therapy as diplomacy
For years, Tehran has treated negotiations less as a path to resolution than as a pressure valve—a way to appear engaged, delay enforcement and test the patience of counterparts.
That strategy may have worked when the global community was divided or distracted. It no longer does.
The snapback mechanism is proof: Europe has abandoned its posture of indulgence, siding with Washington in reimposing penalties.
Iran’s rulers now face the consequences of years spent refusing with one hand and pretending to accept with the other.
For ordinary Iranians, the result is an ever-shrinking future: savings vaporized, wages worthless and hope steadily eroded.
Tehran remains content to offer the world more of the same—talk therapy instead of genuine negotiation, illusion instead of strategy—while hoping for divine intervention.
