Iran Steps Up Economic Reforms, Warns of Harsher Response to US Attacks
Iran's Response to US Sanctions and Military Actions
DUBAI, Sept 6 (Reuters) - Iran said it will step up efforts to tackle problems created by U.S. sanctions that are crippling its economy, while a senior Iranian official warned of a "painful response" if it comes under further attack.
Six months after U.S.-Israeli strikes on Iran launched the war, the conflict 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.
Renewed Military Escalation
After a pause in military action for much of August, tit-for-tat strikes have resumed with U.S. Central Command saying it hit three Iranian tankers on Saturday after Iran's Islamic Revolutionary Guard Corps launched ballistic missiles at two U.S. Navy ships.
Following the attacks, Iran's Parliament Speaker Mohammad Baqer Qalibaf said on Sunday that the U.S. should understand that the rules of the game 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.
Security Measures in the Strait of Hormuz
A restricted zone will be announced outside the Strait of Hormuz in coming days, Mohsen Rezaei, the secretary of Iran's Supreme National Security Council, said on Sunday, according to state media.
He added that the zone would include areas in the Gulf. Few details were provided on the plan initially, but Rezaei said any ship entering the new zone would be added to a sanctions list.
Tehran has shown it retains the capability to attack U.S. 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.
Economic Pressures and Reform Initiatives
Sanctions, Oil Blockade Squeeze Economy
SANCTIONS, OIL BLOCKADE SQUEEZE ECONOMY
However, the U.S. 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.
Government Response and Reform Plans
In his speech on Sunday, Qalibaf added that alongside the military front, Iran’s main battle was now over production and people’s livelihoods.
He cited sharp currency fluctuations, inflation, unemployment and market management as major challenges, adding Iranians could tolerate hardship but not mismanagement or inaction and expected the government to act quickly.
Iran's Economy Minister Ali Madanizadeh said that Tehran planned to respond to U.S. economic pressure with reforms and rejected the notion that sanctions would cause it to change course, according to state media on Sunday.
“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,” Madanizadeh said.
“I have to clarify one point: The responsibility of reforming Iran’s economy is with its government and people, not with the U.S. Treasury."
Economic War Headquarters
Separately, Economy Ministry Deputy Morteza Zamanian said on Sunday that the ministry's “Economic War Headquarters” was doubling down on its work to resolve problems caused by the war, according to the semi-official Tasnim news agency.
Impact on Oil Exports and Regional Stability
Kharg Island and Oil Export Disruptions
KHARG ISLAND HIT 550 TIMES IN PRIOR MONTHS, IRAN SAYS
Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries and exported 90% of its crude via its Kharg Island export hub before the war. Flows have been disrupted since a U.S. blockade of Iranian oil exports began in mid-April.
U.S. Central Command said on X that as of Sunday it had redirected 92 commercial vessels, disabled three and boarded two to ensure strict compliance with its blockade.
On August 31, U.S. President Donald Trump issued a one-line social media post accompanied by an AI-generated video depicting Kharg Island being "blown to smithereens." Iranian authorities have vowed a strong response if Kharg is attacked.
Iranian and US Statements on Oil Flow
In an interview aired on state TV on Sunday, Iran's Oil Minister Mohsen Paknejad said the island had been hit around 550 times in previous months but continued to operate.
Iran has also imposed a blockade on the Strait of Hormuz, creating an issue for Trump by pushing up fuel prices globally as his Republican Party heads into elections in November when control of Congress is at stake.
However, U.S. Energy Secretary Chris Wright said oil was getting through the waterway.
"Our transits through the Strait are averaging over 9 million barrels a day now, and with the access pipelines that go around the strait, we're probably two-thirds or more of pre-conflict flows. So Iranians are still causing trouble, but the United States Navy is winning that battle," he told CNN.
Recent Military Actions Near Kharg Island
On Saturday, U.S. Central Command said it struck three Iranian vessels, including one off the coast of Kharg Island, after Iran's Islamic Revolutionary Guard Corps launched ballistic missiles at two U.S. Navy ships.
(Reporting by Dubai Newsroom; Writing by Sharon Singleton; Editing by Toby Chopra, Ros Russell and Cynthia Osterman)
