Welcome back to the MBN Iran Briefing.
While the Islamabad MOU and its aftermath have consumed international coverage of Iran, the country’s press has been telling different stories about the war’s impact and outcome. This week, I look at some of the war costs that the Iranian press is revealing.
The government has admitted it printed money to cover wartime spending at a scale not seen since 1974. A city of 200,000 in Khuzestan has had no working hospital since a U.S.-Israeli strike on a nearby missile base. And Iran’s economists are warning that the market rally that greeted the MOU reflects emotion more than reality.
Also in this edition: I look at how Iran’s volatile economy has dramatically restructured society and Iranian class structures, why Tehran’s rental market isn’t reflected in official figures, and what oil’s slide below $70 a barrel actually means for Iran.
Find out more below, and share your thoughts, analysis and predictions with me at ailves@mbn-news.com. If you were forwarded the MBN Iran Briefing, please subscribe. Read me in Arabic here, or on the flagship MBN Arabic-language and English-language news sites.
And don’t forget to check out the latest Iran Briefing podcast. In this edition I’m joined by Henry Sokolski, founder and executive director of the Nonproliferation Policy Education Center, as we examine the newly announced U.S.-Iran Memorandum of Understanding, the fundamental flaws in inspecting nuclear fuel production, the overlooked plutonium threat at Bushehr, nuclear proliferation risks across the Middle East, and whether the 60-day negotiation window can address half a century of unresolved nuclear concerns.
And later this week in the MBN Iran podcast I’ll be joined by Dana Stroul, director of research at the Washington Institute for Near East Policy and Matthew Kaminski, MBN’s editorial chair, as we take up the MOU, Iran’s nuclear and missile programs, how Iran weaponized the Strait of Hormuz, the Houthi wildcard in the post-ceasefire landscape, and what a genuine post-war strategic success looks like for Washington.
QUOTE OF THE WEEK
We have sufficient evidence and proof to prove that some countries in the region played an active role in the military aggression of the United States and the Zionist regime against Iran…The action of the United States and the Zionist regime against Iran was completely illegal, and anyone who participated in providing their country’s airspace will definitely be held responsible.
—Iranian foreign ministry spokesman Esmail Baghaei, at a press conference on Tuesday
TOP OF THE NEWS
Iran’s New Class Pyramid
The conventional picture of Iranian society, with a middle class squeezed between a wealthy elite and a struggling working poor, no longer maps onto reality, according to an analysis published by Fararu drawing on recent social research. It says that Iran’s social hierarchy can no longer be read off a simple income scale and describes seven economic tiers defined by net asset value.
The largest single tier, accounting for 55 to 60 percent of the population, is what the analysis calls the “vulnerable class,” with net assets below one billion tomans (approx. $6,000 at the current free market rate). They rent in the urban periphery, have no car, no savings, are entirely dependent on their monthly income and are fully exposed to every inflationary shock. Just above them, at around 20 percent of the population, is a layer of salaried workers and skilled laborers who are permanently one economic jolt away from falling into the tier below, with one to three billion tomans (approx. $6,000 – 18,000) in assets.
The “true middle class,” defined as households with net assets of three to eight billion tomans (approx. $18,000 – 50,000), and owning one apartment and a domestic car, accounts for only around 10 percent of the population. The article notes that recent inflation has pushed a large share of what was once the traditional middle class down into lower tiers. This group can still plan for the future but cannot buy a second property or make significant investments.
The sharpest observation in the piece concerns the subjectivity of class identity under these conditions. Someone holding a 19-billion-toman (approx. $120,000) Tehran apartment may still describe themselves as middle class, surrounded as they may be by neighbors with comparable or greater assets. The same asset value in a provincial city places the owner firmly in the wealthy tier. Class in Iran has become almost entirely location-dependent, and any single national benchmark has lost descriptive power.
At the top, the analysis identifies three tiers: the wealthy (30 billion to xxx billion tomans, or about $185,000 to $615,000), at roughly one percent of the population, the very wealthy (100 to 500 billion tomans, or approximately $615,000 to $3 million), at 0.2 percent of the population, and the ultra-wealthy (above 500 billion tomans or $3 million), representing less than 0.05 percent. This last group, the article notes, rarely appears in official statistics but holds assets exceeding those of millions of ordinary Iranians combined. Under sustained high inflation, the article concludes, wealth should no longer be measured by monthly income but by how fast the value of your assets is growing relative to the inflation rate. By that measure, most Iranians are losing ground.
The Tehran rental market has intensified this stratification. Khabaronline’s most recent survey of the market found a sharp divergence between the official figures from the real estate agents’ organization, which points to 20 to 30 percent rent increases, and what agents on the ground in west Tehran describe: increases of around 50 percent in most contracts, with many landlords pushing for 100 percent. A tenant in east Tehran cited in the piece went from paying a deposit of 200 million tomans (approx. $1,200) and 8 million tomans ($50) a month to being asked for a deposit of 200 million tomans ($1,850) and 16 million tomans ($100) a month on renewal. The Central Bank stopped publishing housing price data in August 2024, removing the only independent check on what either landlords or the union claim.
Andimeshk hospital. Photo: Sharq
A City Without a Hospital
“For three months we have had no operating room, no maternity ward and no ICU,” says a physician interviewed by an Iranian newspaper, describing the situation since the blast wave from a U.S.-Israeli strike on a missile base near Dezfoul damaged the only public hospital in Andimeshk, a city of 200,000 in Khuzestan province.
The situation was reported in detail by Sharq newspaper, whose reporter found that the city’s Imam Ali Hospital remains largely closed and its management gone. The doctor, quoted under a pseudonym, describes what Sharq calls “a breeding ground for disaster.”
The article reports that a temporary hospital of ten to twelve beds was set up during the war. However, the doctor reports that “the beds are placed in a non-standard way and at close distances in two four-by-four rooms next to each other. For example, an infectious patient is placed next to a patient with a weakened immune system. The situation is also extremely non-standard in terms of isolation and is dangerous even for non-infectious patients.”
Neighboring cities lack the capacity to absorb Andimeshk’s caseload. Patients needing emergency admission are being turned away or accepted with difficulty, and one patient who required intensive care died after delays. The physician’s assessment of the makeshift replacement facility that has been set up inside a vocational university: “A field tent would be more useful than this building.”
The article also quotes an obstetrician, who says “We haven’t had a single delivery in Andimeshk since the beginning of Farvardin [the Persian month corresponding to March 21 to April 20] because there is no maternity hospital, and if God forbid something happens to the mother or the baby, we have no place to take care of it.”
The article notes that all was not ideal even before the attack, as the city’s only hospital had less than one hospital bed per 1,000 people.
One official claimed that the hospital was out of service for only 30 minutes after the attack, but an account given by physicians on the ground describes how the blast disrupted treatment for around 45 thalassemia patients who depended on Imam Ali Hospital for regular transfusions.
A poster with a picture of the late Supreme Leader of Iran, Ayatollah Ali Khamenei, is displayed in a store in Tehran. Photo: Reuters
The Optimism Gap
In a previous edition of this newsletter I reported on a market rally that followed the announcement of the U.S.-Iran MOU. The dollar fell, gold retreated, and the Tehran Stock Exchange recorded one of its strongest weeks in years. But a parallel conversation has been running in Iran’s specialist economic press that is considerably less cheerful.
The core argument, laid out by Donyaye Eqtesad, is that the problem with Iran’s economy is not limited to sanctions, and a deal with the U.S. does not fix it. Economist Hossein Salaharzi points out that when the JCPOA was signed in 2015, Iran’s money supply had not yet reached today’s levels, economic damage had not accumulated to the current degree, and, most importantly, public trust in the national currency had not been as severely eroded. As he puts it, “If we want to look realistically, we must distinguish between the psychological effect of the agreement and the real economic effect of the agreement.” He adds that in response to an agreement, “the market is likely to react emotionally in the short term and the dollar may experience a significant drop. Even a 20 to 30 percent drop is not out of the question. The Iranian market always reacts to political news in extremes, whether it is rising or falling.”
At the 33rd Annual Monetary and Currency Policy Conference held at the Central Bank of Iran, Iranian president Masoud Pezeshkian said that inflation of 40 to 60 percent is “unacceptable” and that the gains from the MOU with the U.S. will only hold if structural reforms follow.
The War’s Hidden Bill
While diplomats were still working through the details of the Islamabad MOU, Iran’s Economics Minister Ali Madanizadeh was disclosing something that dampened the post-deal optimism: to cover the budget shortfall caused by the war, the government borrowed 100 trillion tomans, around $615 million, directly from the Central Bank.
In plain terms, that means it printed money. When a government borrows from its own central bank rather than raising funds by selling bonds to investors, it creates new currency without any corresponding economic activity to back it up. Iranian economists and informed members of the public understand this, which is why previous governments tended to obscure the practice through more indirect mechanisms. That Madanizadeh said it plainly is itself notable.
The scale of the problem becomes clearer when set alongside the monetary data the Central Bank also released this week — after an unusually long delay. According to Donyaye Eqtesad’s analysis of those figures, Iran’s money supply grew by 53.3 percent in the year to March 2026, and the monetary base grew by 61.5 percent. Both are the highest rates recorded since 1974. The Central Bank itself attributed the surge to the two wars of the past Iranian year and to the need to finance the government during them.
More money chasing the same goods means higher prices. Annual inflation was already above 50 percent before the war. The new monetary data suggests that pressure is not easing. The market rally that followed the drawing up of the MOU reflects genuine relief that the fighting has stopped. But the bills from the war are still being counted.
Iranians swim in Bandar Abbas along the Strait of Hormuz. Photo: AFP
Oil price plummets
Oil prices hit their lowest point since before the war yesterday. Brent crude fell over four percent to below $70 a barrel. This is roughly 30 percent below last month’s peak, when it briefly topped $100 as the Strait of Hormuz closure cut off around a fifth of global oil supply.
The drop reflects a rapid shift in expectations since the Islamabad MOU. The sixty-day U.S. sanctions waiver allowing Iran to sell oil internationally came into effect a few days ago. Tanker traffic through Hormuz has picked up sharply, with shipowners now crossing openly following safety guarantees from the International Maritime Organization. More than 30 million barrels departed Iranian ports in the days around the MOU signing. The UAE has recovered to roughly eighty-five percent of pre-war export levels, according to the International Energy Agency, and Kuwait is ramping output back toward pre-war levels.
Iranian state television announced that vessels wishing to transit the strait must coordinate their passage with the IRGC Navy, in a reminder that Tehran intends to exercise sovereign control over the waterway regardless of what the MOU says about free passage. Analysts caution the drop has moved faster than the facts on the ground warrant. Analyst Vandana Hari says “crude’s slide is entirely sentiment-driven” and that “potential hiccups from logistics to renewed geopolitical tensions are not being adequately factored in.” Lebanon remains unresolved, the IAEA dispute is live, and the UN’s shipping body only launched its plan to evacuate more than eleven thousand seafarers still stranded in the Gulf on Tuesday.
