In recent months, Iran has experienced unprecedented anti-government protests driven by a devastating economic crisis largely attributed to external pressures. U.S. Treasury Secretary Scott Bessent’s admission about a deliberately engineered dollar shortage not only highlights the complexities of sanctions but also raises important questions about the humanitarian impact on the Iranian populace. As tensions escalate, understanding the interplay between international economics and domestic stability becomes essential.
U.S. Treasury Secretary Scott Bessent has alleged that the United States strategically caused a dollar shortage in Iran, a move intended to destabilize the country by devaluing the rial and inciting protests among the populace. This claim comes in the wake of one of the largest anti-government protests witnessed in Iran since the Islamic Revolution of 1979, triggered by a severe economic crisis affecting the nation.
Demonstrations began on December 28, 2025, when shopkeepers in Tehran closed their businesses to protest soaring prices, a response to the rial plummeting to a record low against the dollar. What initially started as localized dissent quickly spread across various provinces, prompting a significant crackdown by the government. Reports indicate that more than 6,800 protesters were killed in the government’s efforts to suppress the movement, including at least 150 children.
The concept of a dollar shortage indicates a situation where a nation lacks sufficient U.S. dollars to meet its international trade needs. Given that the dollar is the dominant currency in global commerce, particularly for essential commodities like oil and machinery, a sustained shortage can severely undermine a country’s economy. Iranian economist Mohammad Reza Farzanegan explained how the U.S. imposed sanctions particularly targeted Iran’s oil exports and banking access, effectively cutting off critical foreign exchange inflows and trapping existing reserves abroad.
In a recent Congressional hearing, Bessent detailed the U.S. approach that ultimately led to the recent economic downfall. He noted that the collapse of a major Iranian bank in December was a pivotal moment, leading to rampant inflation and widespread civil unrest as the government struggled to respond.
As January 2026 progressed, the rial had dropped dramatically, trading at 1.5 million to the dollar — a staggering decline from 700,000 a year prior. This dramatic devaluation resulted in food prices soaring by an average of 72 percent, exacerbating the already dire situation for many Iranians.
The long-standing sanctions imposed on Iran began in 2018 when former President Trump withdrew from the Joint Comprehensive Plan of Action (JCPOA), further compounding economic woes with intensified restrictions targeting Iran’s oil supply chain. The ongoing sanctions have rendered Iran unable to secure necessary imports, catalyzing social unrest among those increasingly affected by the mounting economic pressures.
Farzanegan emphasized the unique nature of the economic constraints facing Iran, noting that the country’s economy is inherently vulnerable due to years of mismanagement and reliance on oil revenue. While the U.S. sanctions represent a significant external shock, the absence of domestic reform has severely limited the Iranian government’s capacity to weather the crisis.
Bessent’s assertion of a deliberate dollar shortage underscores a shift towards a narrative of economic warfare. This strategy, he argues, carries the potential for significant diplomatic ramifications, as it risks undermining humanitarian aid efforts aimed at ensuring access to essential goods like food and medicine for the Iranian people.
Experts caution that the extensive economic coercion applied to Iran may not yield the desired outcome of regime change. Bruce Fein, a constitutional law expert, remarked that economic sanctions rarely lead to regime toppling, suggesting that the impoverishment of ordinary Iranians could impede the prospect of successful revolution, as immediate survival supersedes political action.
In light of these developments, the situation remains precarious as negotiations between the U.S. and Iran unfold, with key talks focusing on Iran’s nuclear program and its role in regional security. Observers note that without a more comprehensive approach, the continuing economic crisis may lead to a deteriorating humanitarian situation within Iran rather than the political change sought by U.S. policymakers.
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