# Iran's Security Chief Admits the Economy Is in Its Hardest Period as the Blockade Cuts Oil Revenue

Mohsen Rezaei, secretary of Iran's Supreme National Security Council, has admitted the economy is in crisis as the rial trades near 2.57 million to the dollar. Foreign Minister Abbas Araghchi says only "just and fair" talks can end the war with the United States.

- Published: 2026-10-05T05:06:07.059Z
- Canonical: https://polylog.news/2026-10-05/iran-s-security-chief-admits-the-economy-is-in-its-hardest-p
- Publisher: Polylog (Global desk)
- Section: geopolitics
- Sources: [The New York Times](https://www.nytimes.com/2026/10/04/world/middleeast/iran-economy-rial.html), [Dawn](https://www.dawn.com/news/2034846/only-just-fair-talks-can-end-war-iran-tells-us), [ZeroHedge](https://www.zerohedge.com/military/us-navy-super-hornet-sub-buster-marking-hints-iranian-submarine-kill)

Mohsen Rezaei, secretary of Iran's Supreme National Security Council, has made what The New York Times called [a rare admission of a dire economic crisis](https://www.nytimes.com/2026/10/04/world/middleeast/iran-economy-rial.html). The admission came weeks after Washington tightened both sanctions and the naval blockade. Rezaei said the economy is going through [the most difficult period in its history](https://news.sbs.co.kr/english/article.do?news_id=N1008783412) because of the war, which began on February 28. The rial weakened to 2.567 million per dollar on September 30. Analysts quoted in the same report said the blockade has nearly cut off crude exports, Iran's main source of revenue, and caused fuel shortages at home.

Rezaei's statements are not fully consistent. In late August, he said Iran had [broken the blockade during the ceasefire and exported 70 million to 80 million barrels](https://www.jpost.com/middle-east/iran-news/article-906287). He also threatened that Iran would target US economic interests ["100 percent"](https://www.iranintl.com/en/202608281251) if the blockade continued. An official who first claims success against the blockade and then admits crisis is setting expectations at home for either a deal or harder measures.

The diplomatic message from Tehran is consistent. Foreign Minister Abbas Araghchi said on Sunday that [there is no military solution](https://www.dawn.com/news/2034846/only-just-fair-talks-can-end-war-iran-tells-us) to what Iran calls the US war against it, and that only negotiations based on justice and fairness can end it. The reformist Iranian outlet Jamaran carried his position that [neither force nor more sanctions](https://www.jamaran.news/%D8%A8%D8%AE%D8%B4-%D8%A8%D8%A7%D8%B2%D9%86%D8%B4%D8%B1-59/1709030-%D8%B9%D8%B1%D8%A7%D9%82%DA%86%DB%8C-%D9%87%DB%8C%DA%86-%D8%B1%D8%A7%D9%87-%D8%AD%D9%84-%D9%86%D8%B8%D8%A7%D9%85%DB%8C-%D8%AF%D8%B1%D8%A8%D8%A7%D8%B1%D9%87-%D8%A7%DB%8C%D8%B1%D8%A7%D9%86-%D9%88%D8%AC%D9%88%D8%AF-%D9%86%D8%AF%D8%A7%D8%B1%D8%AF) will settle the dispute. Dawn reported that talks between Washington and Tehran appeared stalled.

There is also unconfirmed evidence about the naval war. ZeroHedge, citing the defense site The Aviationist, reported that a US Navy F/A-18F Super Hornet [returned from Operation Epic Fury with a "Sub Buster" marking](https://www.zerohedge.com/military/us-navy-super-hornet-sub-buster-marking-hints-iranian-submarine-kill). The marking suggests a carrier aircraft may have sunk an Iranian submarine. The Pentagon has not confirmed such a kill, and Tehran has not acknowledged a loss.

## What this means

The blockade is working on Iran's balance of payments. Lost oil revenue weakens the rial, raises import prices and creates domestic fuel shortages. Rezaei's admission shows that Tehran now faces a choice between negotiating and escalating against the blockade itself. Iranian households and holders of rials lose first. Gulf shipping insurers and Saudi infrastructure are exposed if Tehran or its partners respond. Most commentators read the admission as weakness that forces concessions. A precedent points the other way. After the 2012 oil embargo halved Iran's exports and the rial collapsed, Tehran negotiated, but the interim deal took about 18 months and required a change of president. The two concrete outcomes over the next one to three months are a renewed round of mediated talks with limited sanctions relief, or escalation against shipping and US-linked assets, as Rezaei threatened. The deciding factor is whether Washington offers any blockade relief in exchange for talks. Without that, the escalation path becomes likelier, because Iran's leadership has said it will not negotiate under maximum pressure.

## What to watch

- The rial's open-market rate in Tehran. A further rapid decline would increase pressure on the leadership to either accept talks or escalate.
- Any announcement of a mediator or venue for renewed US-Iran talks. Pakistan, Oman and Qatar have hosted earlier contacts.
- Pentagon or Iranian acknowledgment of a submarine loss. Confirmation would show the US Navy is actively reducing Iran's ability to contest the Strait of Hormuz.