US dollar hits record high of 1,060,000 rials in Iran’s market
The value of the US dollar surged to an unprecedented 1,060,000 rials in Iran’s free market on Sunday, setting a new all-time record as fears of renewed UN sanctions deepened.
The value of the US dollar surged to an unprecedented 1,060,000 rials in Iran’s free market on Sunday, setting a new all-time record as fears of renewed UN sanctions deepened.
By mid-afternoon, the rate had reached 1,062,600 rials, continuing a sharp climb that added more than 30,000 rials since Saturday. The jump comes amid heightened expectations that the snapback mechanism will be activated, reinstating international sanctions previously suspended under the 2015 nuclear deal.
On September 20, the dollar opened trading at around 1,013,000 rials and rose to above 1,035,000 by midday, immediately after the UN Security Council rejected a South Korean draft resolution that would have permanently lifted sanctions. With the measure defeated, all restrictions are now set to reimpose automatically from September 27.
The rial has faced repeated shocks since Donald Trump returned to the White House. The latest surge follows months of volatility, with the dollar climbing to 1,058,900 rials in April when US B-2 bombers were deployed to the region. Optimism over nuclear talks briefly brought the exchange rate down to 820,000 rials after a second round of negotiations in Rome, but subsequent Israeli strikes on Iranian targets reignited the currency’s slide.
Even after a ceasefire was announced, the US dollar remained high at 930,000 rials and later climbed back above 940,000 on speculation over snapback sanctions. Despite occasional dips, the overall trend has been steadily upward, culminating in Sunday’s record high.
The collapse of the rial underscores Iran’s deepening economic vulnerability as diplomatic isolation grows, with markets responding sharply to both international pressure and the stalled state of nuclear negotiations.
US president Donald Trump on Saturday night boasted of ordering the bombing run that he said destroyed Iran’s enriched uranium stockpiles, praising American pilots for carrying out the long-planned mission.
“I also obliterated Iran's nuclear hopes by totally annihilating their enriched uranium,” Trump told a dinner hosted by the conservative American Cornerstone Institute. He described the B-2 stealth bombers that executed the raid as “beautiful” and said the pilots flew for 37 hours with the support of 52 refueling tankers.
“Every single one of those bombs hit its targets. It was absolutely amazing and they were the heroes,” he said.
Trump recounted meeting the pilots and mechanics after the mission, comparing them to film star Tom Cruise. According to his account, the airmen said they had practiced the strike for more than two decades and told him he was “the only president that had the courage to let us go and do our thing.”
His remarks come as the dispute over uranium enrichment remains the central obstacle in nuclear talks. Iranian officials insist their country’s right to enrich uranium on its own soil is non-negotiable under the Nuclear Non-Proliferation Treaty, framing it as a matter of sovereignty. The United States argues that enrichment inside Iran poses an unacceptable proliferation risk and maintains Tehran can meet civilian nuclear needs through international supply.
Negotiations have stalled over this gap, with Tehran refusing to sign any accord without recognition of its enrichment rights, while Washington and European allies see such recognition as legitimizing a path to weaponization.
The deadlock has deepened after US strikes in June shut down Iran’s nuclear facilities, halting production and leaving the fate of hundreds of kilograms of enriched uranium unclear.
The European push to trigger the UN snapback mechanism this month means sanctions suspended under the 2015 deal will now return, further isolating Tehran.
Cooperation with the UN nuclear watchdog will be suspended if European states push ahead with reinstating United Nations sanctions, Iran’s Supreme National Security Council said on Saturday.
The council, in a meeting chaired by President Masoud Pezeshkian, concluded that despite months of engagement with the International Atomic Energy Agency, “the path of collaboration will in practice be suspended" following the Europeans' push for reinstating UN sanctions on Iran, state media reported.
The foreign ministry was also tasked with continuing diplomatic outreach in line with the Council’s decisions.
On September 9, IAEA Director General Rafael Grossi and Iranian Foreign Minister Abbas Araghchi signed an agreement in Cairo that set out procedures for inspections, notifications, and reporting obligations.
However, Araghchi said at the time that the agreement would be scrapped if European powers proceed with reimposing UN sanctions on Iran through the so-called "snapback" mechanism.
President Pezeshkian in remarks made on Saturday rejected what he described as Western pressure over the country's nuclear program.
“They have decided to bring back the snapback (sanctions),” he said. “They can close the paths, but minds and ideas will build new ones. They can strike Natanz and Fordow, but people will create Natanz and even more important than Natanz. They cannot stop us.”
The UN Security Council on Friday rejected a South Korean-sponsored draft resolution that sought to permanently lift sanctions suspended under the 2015 nuclear deal. With that proposal defeated, all international sanctions are due to automatically snap back into place on September 28.
Iran’s currency weakened further on Saturday after the UN Security Council's vote. The dollar, which opened the day around 1,013,000 rials on the free market, rose above 1,035,000 by midday and later reached 1,036,700, according to local exchange trackers.
Tehran conducted a successful test of an intercontinental missile late Thursday, an Iranian parliamentarian said, after videos shared online appeared to show trails of smoke from the launches arcing upward in the sky.
“Two nights ago, we tested one of the country’s most advanced missiles, which had not been tested so far, and it was successful,” Mohsen Zanganeh told state broadcaster IRIB.
“I want to say that even under these circumstances, we are conducting a security test of an intercontinental missile.”
Residents across Tehran and in nearby cities including Gorgan, Sari and Semnan reported seeing the missile’s trajectory in the night sky. Eyewitness videos posted on social media showed arcs of smoke and light, while a Revolutionary Guards-affiliated channel shared images of the launch without claiming direct responsibility.
A local official confirmed missile tests had taken place around the capital on Thursday evening.
Intercontinental Ballistic Missile (ICBM)
Less than a month after the end of June's 12-day war with Israel, Iran conducted a suborbital test using a satellite launch vehicle in a move experts said showcased its defiance and determination to advance its strategic goals.
A 2019 report from the US Defense Intelligence Agency concluded that expertise in space launch vehicles “can be used as a test bed for developing an ICBM (intercontinental ballistic missiles).”
While the Islamic Republic has gained multi-stage launch capabilities through its satellite projects, there is no evidence yet of a fully developed intercontinental ballistic missile, Shahin Modarres, an international relations scholar and security analyst, told Iran International.
“Now the knowledge is there, but until this moment there has been no test and no sign of a built intercontinental weapon,” he said.
“If such a missile had been developed, Israel would already be within range, but the danger would also extend to Europe, while questions remain over whether they have the guidance systems or technology to reach the United States.”
Western governments have repeatedly voiced concern over Iran’s satellite launches, warning that the same rocket technology can be used for intercontinental ballistic missiles. Tehran, however, says its space program is peaceful.
Push for atomic bomb
Hardline voices in Iran's parliament are pushing for escalatory steps after the UN Security Council voted against lifting sanctions against Iran ahead of the so-called "snapback" of UN embargoes on September 28.
“Withdrawing from the NPT, adopting a policy of ambiguity and ultimately testing the atomic bomb is the only option that can spare Iran the fate of Iraq and Libya,” Ahmad Naderi, a member of the parliament’s presiding board said on Saturday.
"Experience has shown that countries without nuclear deterrence eventually become victims of invasion or regime change. The time has come to make hard but necessary decisions."
Iran denies seeking nuclear weapons citing a fatwa by the Supreme Leader and insists that its missile program is defensive. Yet several high-ranking officials have in recent years talked about the necessity of developing an atomic bomb and the possibility of changing the "nuclear doctrine".
The UN Security Council’s decision not to lift sanctions on Iran has heightened the stakes for Tehran, with hardliners pushing for nuclear escalation, reformists urging engagement, and a public already strained by inflation.
Hardliners and ultra-hardliners in Tehran, who have long dismissed the 2015 nuclear deal (JCPOA) as a “total failure,” downplayed the impact of the UN’s decision. For them, renewed sanctions are little more than symbolic.
“In the past, sanctions far harsher than these have been imposed; this is simply a psychological tactic intended to impact our economy,” hardline lawmaker Hosseinali Haji-Deligani told ILNA.
Meanwhile, Kayhan newspaper, linked to the Supreme Leader’s office, and other hardline outlets such as Vatan-e Emrouz have urged Tehran to withdraw from the Nuclear Non-Proliferation Treaty (NPT).
In an editorial titled “Is it still not time to leave the NPT after 22 years of costly negotiations?!” the paper argued for building a bomb to “fully strengthen national deterrence.”
Ahmad Naderi, a member of parliament’s presiding board, echoed this stance, insisting that “acquiring nuclear weapons is the only way to preserve Iran’s territorial integrity and national security.”
“Withdrawing from the NPT, adopting a policy of ambiguity and ultimately testing the atomic bomb is the only option that can spare Iran the fate of Iraq and Libya,” said Naderi.
“Experience has shown that countries without nuclear deterrence eventually become victims of invasion or regime change. The time has come to make hard but necessary decisions.”
Warning of a deepening crisis, push for policy change
Others caution that the impact will be severe. Journalist Azadeh Mokhtari argued on social media that the Iranian people will once again bear the brunt of political maneuvering: “The return of UN sanctions means increased economic pressure, reduced access to essential goods and medicine, and a deepening livelihood crisis.”
Meanwhile, reformists are calling for urgent diplomacy. Azar Mansouri, head of the Reform Front, warned that “immediate and maximal use of diplomatic capacity to prevent a global consensus against Iran is an unavoidable necessity.”
She stressed that the window of opportunity for negotiations is closing fast, with reinstated UN resolutions carrying “wide-ranging international consequences.”
Ebrahim Asgharzadeh, a reformist politician, went further, telling Etemad newspaper: “Iran stands on the brink of a historic choice: either insist on the illusion of costly deterrence and a single-track foreign policy, which yields nothing but isolation and domestic erosion, or acknowledge the reality of rival powers.”
He added that the world today is “waiting for a change in Iran’s language and behavior, not a repetition or justification of the past.”
Doubts over Russia and China
Hardliners often argue that Russia and China will help Iran weather sanctions. Yet that view has drawn criticism even from conservative voices. Journalist Ali Gholhaki dismissed the notion: “At least in China’s case, it’s just empty talk! Industrial and economic managers understand the reason well. They have seen examples of this in just the past few days.”
Mohammad-Ali Hanaei, head of the Nations Diplomacy Think Tank, told Etemad that Beijing profits from buying Iranian oil cheaply and has little incentive to back sanctions relief. He urged Tehran to consider “logical restrictions” as a way to manage the crisis.
Moscow has suggested it might mediate. Mikhail Ulyanov, Russia’s envoy to international organizations in Vienna, told Al Mayadeen that Russia and China are preparing a joint initiative to resolve the crisis, though he offered no details.
Diplomatic openings still possible?
Some experts still see potential for compromise. Economics professor Alireza Soltani told Khabar Online that the diplomatic window is not yet closed, while cautioning against “emotional reactions.”
Even if previous UN resolutions are reinstated, he argued, a comprehensive deal remains possible “provided there is political will from both Iran and the United States.”
Foreign policy analyst Morteza Makki raised the possibility of a “miracle” if Tehran can strike a temporary arrangement with the E3 (Britain, France, and Germany) in the coming days or at the UN General Assembly.
Pezeshkian-Trump Meeting Debate
At home, debate is intensifying over whether President Masoud Pezeshkian should meet US President Donald Trump during his upcoming trip to New York.
Reformist cleric Mohammad-Taghi Fazel-Meybodi called such a meeting “the last chance of the system,” recalling that a missed opportunity between Mohammad Khatami and Bill Clinton two decades ago paved the way for today’s sanctions.
Yet many doubt Supreme Leader Ali Khamenei will allow it, having denied similar requests from both Khatami and Hassan Rouhani.
Iran’s gas deficit will double in the next 15 years, reaching “terrifying” heights, a senior advisor to the president has warned.
“If the gas imbalance continues at this rate, by the year 2041 we will be facing a 512-million-cubic-meter shortfall. This figure is terrifying,” Ali Rabiei told Tehran media this week.
Such a gap would leave the government unable to meet two-thirds of domestic demand. The warning is stark given that Iran holds 33 trillion cubic meters of proven gas reserves, the world’s second largest after Russia.
Yet a mix of delayed field development, lack of energy diversification, declining reservoir pressure, and systemic inefficiencies has already created an unsustainable deficit.
Parliament’s Research Center estimates a current shortfall of 150 million cubic meters per day, rising above 250 million in peak winter—roughly equal to Turkey’s entire seasonal consumption.
Heavy reliance on gas
Around 70% of Iran’s energy consumption depends on natural gas, according to the Ministry of Petroleum. Clean energy contributes barely 1% of electricity generation, while over 90% comes from thermal power plants, most of them gas-fired.
By comparison, Turkey produces 40 times more electricity from renewables.
The International Energy Agency (IEA) puts Iran’s current daily output at about 750 million cubic meters. After a decade of 5% annual growth, production growth slowed to just 1% last year.
Even with new investments, the IEA projects output could shrink by as much as 40% without substantial investment by the decade’s end.
Decline and waste
Nearly three-quarters of Iran’s gas comes from South Pars, a giant offshore reservoir shared with Qatar.
The field entered the second half of its lifecycle last year, with output expected to fall by 30 million cubic meters annually due to declining pressure.
Qatar has invested heavily to offset this decline, deploying massive 20,000-ton platforms with industrial-scale compressors and signing $29 billion in contracts with global energy majors.
Iran once had a similar plan under a $5 billion deal with TotalEnergies and CNPC in 2015, but both firms withdrew three years later when US president Donald Trump pulled out of the nuclear deal.
The technology remains concentrated in Western companies, leaving Iran reliant on smaller 4,000-5,000-ton platforms that experts say will not halt decline.
Iran also loses huge volumes of gas to waste.
The IEA and World Bank estimate daily losses of 88 million cubic meters through leaks, flaring, and inefficiencies. This makes Iran the world’s second-largest gas flarer after Russia, and the fourth-largest methane emitter after China, the U.S., and Russia.
Iran’s paradox is clear: a country sitting on the world’s second-largest gas reserves is sliding toward a severe energy crunch.
Without major investment, technological access, and diversification, shortages will deepen—leaving households and industries exposed to chronic power cuts and mounting economic strain.
