Summary
Iran is pursuing an agreement with the United States while maintaining threats designed to increase the cost of continued pressure. The strategy aims to combine economic risk reduction with deterrence, but households and investors remain unconvinced, as reflected in rising gold prices and movement toward inflation-resistant assets. Economic strains are also visible in wages, transportation, mobile-phone costs, and access to medicine. The central challenge is whether diplomacy can produce tangible improvements before continuing confrontation further undermines public and market confidence.
Key Takeaways
- Diplomacy and deterrence are operating simultaneously. Iran’s leadership is presenting negotiations with the United States as compatible with continued military and economic pressure, including threats involving the Strait of Hormuz and discussion of possible NPT withdrawal.
- Economic behavior shows continued uncertainty. Gold prices jumped nearly 6% in two days, money shifted away from conservative savings, and wages have not kept pace with rapidly rising living costs.
- Security priorities risk conflicting with economic recovery. Expanded anti-infiltration legislation and tighter security measures could discourage the international investment, expertise, and professional contacts needed for economic stabilization.
The Picture Today: Diplomacy Within a War
The central debate in Iran on Sunday August, 23, 2026, is not whether to negotiate or fight. The question is how to negotiate without admitting that military and economic pressure has forced the country to compromise.
President Masoud Pezeshkian provided the government’s formula. In a speech published overnight, he defended the 14-point memorandum of understanding between Iran and the United States, signed in June as a framework for ending the war and opening broader negotiations. He said the document contains no provision that amounts to surrender, while its implementation could reduce the risk that drives capital and investment away from Iran.
Later in the morning, the president sharpened his rhetoric, declaring that Iran is engaged in an all-out economic, military, and security war. He apologized for the hardships citizens are experiencing, but argued that the country had managed to maintain fuel supplies, keep stores stocked, and preserve roads and water systems. The publication confirms that the president made these statements. His claims regarding the performance of these systems and the extent of the adversary’s failure are his assessments and are not independently verified in the report.
The combination of the two speeches is key to understanding the approach Pezeshkian is seeking to advance. He is not offering the public the prospect of imminent normalization with the United States. He is seeking to present the agreement as a measure intended to improve Iran’s position within a confrontation that has not yet ended.
Under this view, diplomacy is not an alternative to resistance but one of its tools. The agreement is supposed to reduce economic risk, enable the release of funds, and bring investment back, while military capability and control over the Strait of Hormuz are meant to ensure that the other side fulfills its commitments.
Yet this combination sounds more coherent in a speech than it does in the market. For an Iranian household, an agreement that does not lower the price of gold, improve wages, or ensure access to medicine remains a political promise. A threat to oil exports, by contrast, could increase risk even before another missile is fired.
The Agreement Needs a Security Seal of Approval
Pezeshkian has been careful not to portray the memorandum of understanding as an initiative of the government alone. According to him, the policy was determined under the authority of the Supreme Leader and approved by the Supreme National Security Council.
The council is the body in which Iran’s president, military chiefs, representatives of the Supreme Leader, and senior officials from the foreign, interior, and intelligence ministries coordinate national security policy. Its decisions take effect after approval by the Supreme Leader. Presenting the memorandum as a council decision is therefore intended to shield the president from accusations that his government is acting alone or capitulating to the Western camp.
Pezeshkian’s argument is not solely about security. He linked implementation of the understandings to investment, and investment to the state’s ability to provide healthcare, assist the poor, elderly, and unemployed, and narrow the gap between the center and the periphery. In doing so, he is trying to shift the debate from the abstract question of national honor to everyday life: a country exposed to prolonged wartime risk struggles to retain capital, create jobs, and finance public services.
Yet the secretary of the Supreme National Security Council, Mohsen Rezaei, delivered an almost simultaneous but very different message. Rezaei, a former commander of the Islamic Revolutionary Guard Corps who was appointed council secretary this month, warned that if the United States continues its economic war, no oil will be exported from the Gulf states.
This was not an operational order to close the Strait of Hormuz. No council decision, naval announcement, or official directive to halt shipping has been published. It is a deterrent threat issued by one of the most senior figures in Iran’s security establishment. Nevertheless, the fact that it was made warrants attention: Rezaei is not an outside commentator but an official at the center of the decision-making process.
Pezeshkian and Rezaei do not necessarily disagree on the objective. Both want to reduce pressure, preserve Iran’s independence, and compel the United States to honor the understandings. The difference lies in the method and the sequence of actions. The president wants to reduce risk in order to bring investment back; the council secretary wants to raise the cost of failure in order to extract concessions.
The problem is that the public and the markets hear both messages at the same time.
Gold Is Rising Faster Than Wages
The most tangible response to the uncertainty appeared in gold prices. According to a price table published by ILNA, the price of one gram of 18-karat gold reached approximately 21.036 million tomans, compared with about 19.853 million tomans two days earlier. That represents an increase of nearly 6%.
The price of an Emami coin, a full gold coin widely used in Iran as a savings vehicle and hedge against inflation, rose from approximately 200.54 million to 210.01 million tomans, an increase of nearly 5%.
The toman is the unit of account commonly used in everyday life in Iran and is equivalent to ten rials, although the rial remains the official currency. The price tables are market reports rather than official central bank data and therefore should not be treated as a comprehensive picture of the economy. Nevertheless, the sharp movement over two days suggests that the president’s promise of reduced risk has yet to convince savers.
The Tehran stock market also rose. The main index crossed the six-million-point mark, and according to an economic report, approximately 2.65 trillion tomans in private money flowed into equities and equity funds. At the same time, around 6.7 trillion tomans left fixed-income funds, relatively conservative vehicles that invest primarily in bonds and deposits.
A simultaneous rise in gold and equities is not necessarily a sign of growth. It may indicate that investors are fleeing cash and fixed-interest savings for assets perceived as offering greater protection against inflation and currency depreciation. When the denominator, the value of the currency, is eroding, the nominal prices of assets can rise even without any real improvement in output, profitability, or employment.
Against the rapid movement in asset prices stand workers’ wages. The Supreme Labor Council, a tripartite body comprising representatives of the state, employers, and workers and empowered to address the minimum wage, is due to meet today. Yet wage adjustments do not appear on the official agenda.
Ali Aslani, a senior representative of workers’ councils in Alborz Province, claimed that a worker’s salary now covers only 10 to 15 days of living expenses. According to him, a new worker may earn about 21.8 million tomans per month, while rent for an urban household can reach 28 million. He estimated the cost-of-living basket for a family of four in major cities at 80 to 90 million tomans.
These are estimates from a labor representative, not an independent national measurement. The institutional fact, however, is clear: while gold becomes more expensive within hours, wage adjustments are not even on the agenda.
The Infiltration Bill and the Line Between Security and Isolation
In the background of the political debate is legislation known in Iran as the bill to combat infiltration by intelligence services, governments, and foreign institutions.
The 33-article proposal is intended, according to its sponsors, to consolidate disparate laws and provide the state with tools to combat espionage, the transfer of information, activity on behalf of hostile states, and foreign influence over Iranian institutions. Parliament has approved the general principles of the proposal and begun considering its individual provisions, but it has not yet completed the full legislative process. It should therefore not be presented as final, binding law, and there is no basis for claiming that every contact with an entity outside Iran has become a criminal offense.
The controversy stems from the broad definitions contained in the text. Alongside espionage and the transfer of security information, the proposal also addresses activities that could harm national unity, public trust, the country’s culture, or its interests. Critics fear that such vague language could allow the provisions to be applied to researchers, journalists, cultural figures, civil society organizations, and experts who maintain professional contacts with foreign institutions.
The government has opposed the broad wording, arguing that it could harm civil rights and professional and scientific activity. The dispute is not merely legal. It directly affects Pezeshkian’s economic strategy. A president seeking to bring investment, experts, and technology back to Iran will struggle to do so if international contacts remain subject to poorly defined criminal suspicion.
The proposed law therefore exposes one of Iran’s central postwar tensions. The security establishment wants to close the gaps that it says enabled infiltration and assassinations. The government wants to prevent the security response from further isolating the economy and academia. The question is not whether the state has the right to combat espionage, but where espionage ends and legitimate research, journalism, and professional contact begin.
Hormuz and the Nuclear Issue as Levers of Pressure
A telephone conversation between Foreign Minister Abbas Araghchi and Pakistan’s army chief, Asim Munir, confirms that the Pakistani mediation channel remains active. Pakistan is conveying messages between Iran and the United States, while Oman is involved in talks over a temporary safe shipping route through the Strait of Hormuz.
This does not mean that direct negotiations have resumed. No date for a new round, composition of delegations, or updated formula for addressing the nuclear file has been announced. Nor has verified information been published regarding uranium stockpiles, inspection arrangements, or the sanctions to be lifted. At this stage, there are channels for exchanging messages and a struggle over implementation of the memorandum, but there is no full and transparent diplomatic process.
The Strait of Hormuz is the narrow maritime passage connecting the Persian Gulf with the Gulf of Oman, through which a significant share of the Gulf states’ oil and gas exports passes. Rezaei’s threat to prevent oil exports is therefore directed not only at the United States. It also signals to Saudi Arabia, the United Arab Emirates, Kuwait, and Qatar that cooperation with American pressure on Iran could affect their ability to export energy.
Even without an actual closure, such a threat could increase insurance, shipping, and transportation costs. It could therefore raise the price of pressure on Iran’s adversaries, but also increase the cost of Iran’s own imports and trade.
At the same time, debate has resumed over the possibility of Iran withdrawing from the Treaty on the Non-Proliferation of Nuclear Weapons, known as the NPT. The treaty gives member states the right to develop nuclear energy for peaceful purposes, but requires them not to develop nuclear weapons and to accept safeguards administered by the International Atomic Energy Agency.
A parliamentarian associated with the hawkish camp has again raised the idea of withdrawal, but no decision has been taken by the government, parliament, or the Supreme National Security Council. At this stage, it remains a political threat and a means of applying pressure. Withdrawal from the treaty could theoretically expand Iran’s freedom of action, but it could also be perceived as preparation for nuclear escalation, deepen the country’s isolation, and provide legitimacy for additional international pressure.
The same pattern therefore operates across three arenas: the agreement promises to reduce risk, Hormuz threatens to increase it, and the debate over the NPT reminds the other side that Iran can reduce its cooperation if the understandings are not implemented.
The Crisis Reaches Trains, Phones, and Medicine
The price is not measured in gold alone. According to an official in the railway sector, fewer than 1,000 passenger railcars are operating in Iran for a population of approximately 92 million, while demand for tickets may be three to five times greater than supply. These figures are estimates from an industry professional rather than an official census, but they help explain why passengers struggle to obtain tickets even when fares are regulated.
Regulated prices ostensibly preserve the affordability of transportation, but when revenues do not cover the purchase and maintenance of railcars, supply contracts. The result is a service that is inexpensive on paper but difficult to use in practice.
In the mobile phone market, prices of common models were reported to have doubled, tripled, or even quadrupled within a year. Here too, the figures do not constitute a comprehensive official index, but the combination of currency depreciation, import costs, foreign-currency shortages, and supply restrictions is turning a basic communications device into an expense that families postpone. At a time when work, education, and government services depend on phones, rising prices also undermine access to essential services.
Health Minister Mohammad Reza Zafarghandi argued that the exemption of medicines and medical equipment from sanctions exists only formally, because restrictions on banks, payments, insurance, and shipping impair the ability to import them. The publication confirms the minister’s remarks, but does not include import or shortage data that would make it possible to measure the extent of the impact.
In Sistan and Baluchestan, a large and impoverished province in southeastern Iran, government offices and banks were closed in several areas because of strong winds, dust storms, and air pollution. Emergency services and hospitals were exempted. This is not a political event, but it illustrates how economic pressure, weak infrastructure, and harsh environmental conditions accumulate precisely in the peripheral regions the president promises to protect.
Unity for the Elites, Punishment in the Security Sphere
The Iranian press does not divide neatly between supporters of peace and supporters of war. Kayhan, which is associated with the conservative camp, argues that the solution to the economic crisis lies in management and effort rather than displays of weakness. Jomhouri-e Eslami, in a more moderate voice, warns that an opportunity for agreement must not be missed and calls on the authorities to speak candidly with the public.
Pezeshkian is not asking for trust in the United States. He is asking for trust in the Iranian mechanism that approved the memorandum. Rezaei does not reject diplomacy outright. He argues that it must be conducted on the assumption that Washington may violate its commitments.
Seyyed Hassan Khomeini, grandson of the Islamic Republic’s founder, Ruhollah Khomeini, and a figure with standing within the establishment, also called on Iranians to stand together whether the path ahead leads to war or to peace and negotiations. Mahmoud Vaezi, a former presidential chief of staff, called on opponents of the talks to present their position rather than resorting to insults and accusations.
These appeals do not prove that there is a public majority in favor of the agreement. They indicate that the moderate establishment is trying to prevent diplomacy from becoming a weapon in factional struggles.
Alongside these calls for unity, the judiciary announced the execution of Majid Adineh. According to the state’s account, he was arrested in January in the Karaj area, west of Tehran, while in possession of a handgun, ammunition, and other equipment, and was convicted of acting on behalf of Israel, the United States, and hostile groups.
The announcement confirms that the execution took place and records the authorities’ allegations. It does not independently verify the evidence, the fairness of the proceedings, or the foreign connections attributed to the condemned man. A distinction must therefore be made between the fact that the sentence was carried out and the state’s account of the offenses that preceded it.
The gap between calls for political reconciliation and severe punishment in the security sphere defines the boundaries of permissible debate. Within the elite, there is room to argue over the pace and terms of negotiations, provided the debate remains within the national consensus. Anyone portrayed as connected to an external enemy is moved from the political arena into the harshest reaches of criminal law.
The Bottom Line
Iran is not choosing this morning between an agreement and escalation. It is trying to present them as complementary tools. Pezeshkian promises that an agreement will reduce risk and enable investment; Rezaei threatens to increase the risk if the United States fails to honor its commitments; parliament is considering expanding legislation against infiltration; and hawkish circles are reviving discussion of a possible withdrawal from the NPT.
This is not a paralyzed system. It continues to operate its institutions, convey messages through Pakistan and Oman, manage the Strait of Hormuz, and conduct a limited internal debate. But the capacity to act is not the same as the capacity to generate trust.
Gold has risen by nearly 6% in two days. Money is moving out of conservative savings and into assets. Wage adjustments remain off the agenda. Train tickets are scarce, phones are becoming more expensive, and access to medicine depends not only on formal sanctions exemptions but also on banks, insurance, and shipping.
The real dispute in Iran concerns the order of causality. The security camp argues that economic stability will come only after the enemy has been deterred and understands the cost of applying pressure. The camp led by the president argues that sustainable deterrence requires first reducing risk, bringing investment back, and stabilizing citizens’ daily lives.
The issue will not be decided by speeches alone. It will be measured by the announcement of a concrete step to implement the memorandum, an easing of trade and shipping restrictions, the addition of wage adjustments to the agenda, and clarification of the boundaries of the infiltration legislation. As long as these steps remain absent, the financial public will continue to look to the gold market for an answer.
And the answer the market is giving this morning is clear: the leadership is talking about an agreement, but savers are still preparing for war.
