Iran to tackle economic issues, threatens ‘more painful’ response to US attacks

TEHRAN – Tehran said on Sept 6 it will step up efforts to tackle problems created by the US sanctions that are crippling its economy, even as a senior Iranian official warned of a “more painful response” if Iran comes under further attack.

Six months after the United States and Israel struck Iran, the war appears to be at a stalemate. A preliminary ceasefire accord reached in June has unravelled, and little progress has been made in diplomatic efforts to get the peace process back on track.

After a pause in military action for much of August, tit-for-tat strikes have resumed, with the US Central Command (CENTCOM) saying it hit three Iranian tankers on Sept 5 in response to Iran’s Islamic Revolutionary Guard Corps (IRGC) launching ballistic missiles at two US Navy ships.

Following the attacks, Iran’s Parliament Speaker Mohammad Bagher Ghalibaf said on Sept 6 the US should understand the rules of the game in the war against Iran have changed “before it is too late”.

“From now on, any attack against Iran’s interests and security will receive a faster, heavier and more painful response,” he said in a speech published on his Telegram channel.

Tehran has shown it still retains the capability to attack US interests in neighbouring countries and to shut down oil flows through the Strait of Hormuz, through which a fifth of global oil supplies flowed prior to the conflict.

However, the US campaign to throttle Iran’s economy by blockading its oil exports and stopping sanctions evasion is growing increasingly difficult to withstand, three senior Iranian sources have said.

In his speech, Ghalibaf added that, alongside the military front, Iran’s main battle is now over production and people’s livelihoods.

He cited sharp currency fluctuations, inflation, unemployment and market management as major challenges, adding that Iranians can tolerate hardship but not mismanagement or inaction, and expected the government to act quickly.

Iran’s Economy Minister Ali Madanizadeh said Tehran plans to respond to US economic pressure with reforms, and rejected the idea that sanctions would cause it to change course.

“They speak of economic pressure and isolation, of breaking off financial ties, and they think that by pressuring the economy of a country they can change the decisions of its people,” he said.

“I have to clarify one point: The responsibility of reforming Iran’s economy is with its government and people, not with the US Treasury,” he added.

Separately, Deputy Economy Minister Morteza Zamanian said the ministry’s “Economic War Headquarters” was doubling down on its work to resolve problems caused by the war.

Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries. It exported 90 per cent of its crude via its Kharg Island export hub before the war. Flows have been disrupted since a US blockade of Iranian oil exports began in mid-April.

On Aug 31, US President Donald Trump issued a one-line social media post accompanied by an AI-generated video depicting Kharg Island being “blown to smithereens”. The Iranian authorities have vowed a strong response if Kharg is attacked.

In an interview aired on state TV on Sept 6, Iran’s Oil Minister Mohsen Paknejad said the island has been hit around 550 times in previous months but continues to operate.

Iran has also imposed a blockade on the Strait of Hormuz, creating an issue for Trump by pushing up fuel prices globally ahead of midterm elections for his Republican Party in November.

On Sept 5, CENTCOM said it struck tankers linked to the Iranian Guards, after the IRGC launched ballistic missiles at two US Navy ships.

“Following Iran’s failed attacks, CENTCOM permanently disabled the IRGC crude oil carriers M/T Downy off the coast of Kharg Island and M/T Stark 1 near Jask,” it said.

It added that it also “completely destroyed the unladen crude oil carrier M/T Kylo in the Gulf of Oman, striking the vessel in multiple critical locations to render it inoperable after the crew was directed to abandon ship”.

Video posted by CENTCOM showed large fireballs and billowing flames after projectiles slammed into the ships.

The three vessels were “part of a multibillion-dollar shadow network that funds the IRGC and its regional proxies”, it said.

‘Higher economic cost’

The Guards, meanwhile, claimed the two American warships they targeted had been “forced to retreat” after “suffering damage”, but CENTCOM said those ships successfully evaded Iranian attacks.

CENTCOM commander Admiral Brad Cooper said after the operation: “If you shoot at two of our ships, we will impose an even higher economic cost, taking out three of yours.”

The Iranian foreign ministry hit out at Washington over the strikes on oil tankers, calling them “illegal and aggressive actions”.

A correspondent for Iranian state TV in Jask, in the southern province of Hormozgan, said one of the tankers was empty and the second was carrying oil. The crews were transported to shore on lifeboats, they said.

Another state TV correspondent on Kharg Island said the attack there caused no casualties.

Iran’s Khatam-al Anbiya central military command warned that if the US continues its attacks, then Tehran’s retaliation against US warships will be “more severe than before, and there is a possibility of their expansion”.

The Trump administration has tried to downplay the significance of the six-month conflict, which has proven increasingly unpopular at home as midterm elections near.

US Vice-President J.D. Vance went so far as to say that he “wouldn’t call it a war”.

Trump reiterated that view on Sept 4, calling the war “small potatoes” for Washington.

Iran’s security chief Mohsen Rezaei warned this week that the Islamic republic had adopted a “new strategy” against Washington that “will shatter your foundations”.

Trump has in recent weeks repeatedly threatened to claim sovereignty over the strait, even posting a map showing it as “new US territory”.

Vance has insisted the US will not reopen talks with Iran until it ends attacks on commercial shipping in Hormuz. REUTERS