Iran International
Hardline voices in Tehran are escalating rhetoric around the Strait of Hormuz, calling for transit fees on ships even as a US blockade challenges Iran’s control over the strategic waterway.
They portray control over Hormuz—much like uranium enrichment—as a “red line” that Iranian negotiators must not compromise in any future talks.
Amir-Hossein Sabeti, a member of parliament, recently declared that Iran could soon gain “a third source of income called the Strait of Hormuz.”
Mehdi Mohammadi, a strategic analyst and adviser to the parliament speaker, went further, claiming Iran could earn as much as $800 billion annually from the waterway.
“We have only just discovered this treasure,” he wrote.
Energy analyst Ehsan Hosseini said Iran increasingly sees the strait as its main deterrent—likening it to an “atomic bomb”—and is unwilling to trade this existing leverage for uncertain promises of sanctions relief.
Yet experts and critics say the idea of a “Hormuz toll” is economically unrealistic, legally problematic and potentially damaging to Iran’s long-term interests.
“Some want to take us back, to turn the Strait of Hormuz into a bargaining chip and give it away just to have sanctions lifted,” international affairs expert and university professor Naser Torabi said. “This is a disaster. This means defeat,” he added.
Economic commentator Abdollah Babakhani also warned against inflated expectations.
“Experts have a responsibility to stand against exaggerated narratives—such as claims of $50 to $60 billion in revenue from the Strait of Hormuz—so that unrealistic expectations do not form or persist in society,” he wrote on X.
The United States is enforcing a maritime blockade on vessels entering or leaving Iranian ports, part of a broader effort to pressure Tehran after talks failed to produce a breakthrough.
Shipping data from the firm Kpler shows a sharp drop in traffic through the strait, with only six vessels transiting on April 13 compared with 14 the previous day.
Within Iran, some hardliners initially dismissed the blockade as a bluff. Iran’s top joint military command warned that its armed forces could move to prevent the continuation of trade flows across regional waters if the blockade persists.
Yet more than two days into the blockade, Tehran has yet to take direct military action, as both sides explore diplomatic routes to ending the war.
President Donald Trump said on Wednesday that the Strait of Hormuz would soon be open again to maritime traffic, even as US forces continue enforcing the blockade around Iranian ports.
Some moderates and experts in Tehran have warned that aggressively leveraging the strait could ultimately weaken Iran’s position, especially given that regional producers have invested in pipelines and export routes designed to bypass Hormuz.
Ebrahim Gholamzadeh-Zanganeh, head of the Iran-Kuwait Chamber of Commerce, argued that even if a toll were possible, any financial benefit would pale against the opportunity cost of Iran’s isolation.
“The reality is that our losses from sanctions have been—and continue to be—many times these figures each year,” he said.
Fatemeh Mohajerani, the spokesperson for the Iranian government, said on Tuesday losses from the US-Israeli military campaign are estimated at around $270 billion.
The New York Times, citing three Iranian officials and two economists, reported that early estimates broadly align with that figure, placing the damage at roughly $300 billion or higher.
Preliminary estimates by the US-based think tank Foundation for Defense of Democracies also suggest Iran absorbed roughly $150–$300 billion in economic damage.
Using a population of about 92 million, the lower estimate of $150 billion translates to roughly $1,600 per person, rising to nearly $3,250 per person under the higher estimate.
These figures reflect national wealth lost through destruction, halted production and disrupted trade.
Iran’s central bank has warned President Masoud Pezeshkian that rebuilding the country’s war-damaged economy could take more than a decade, sources familiar with internal deliberations told Iran International.
In a stark assessment delivered to the president in recent days, senior economic officials said the damage inflicted during the 40-day war with the United States and Israel—combined with Iran’s already fragile economic situation—could take up to 12 years to repair.
Industrial sectors bear largest losses
Petrochemicals account for the largest share of damage. Iran’s petrochemical sector, with annual sales of $29.1 billion, has seen about 85% of export capacity disrupted following strikes on major hubs including Mahshahr and South Pars. Estimated losses range from $30 billion to $50 billion.
Energy infrastructure has also been heavily affected. Refineries, storage depots and gas facilities have been struck, weakening a sector that generated about $78 billion in exports in 2024. Losses are estimated at $15 billion to $25 billion.
Steel production, which underpins both industrial output and reconstruction, has been severely reduced, with about 70% of capacity disrupted. Losses are estimated at $5 billion to $10 billion.
Beyond physical losses, the war has triggered a sharp contraction in output.
Experts estimated a decline of more than 10% in GDP, equivalent to $34 billion to $44 billion in lost economic activity, affecting an economy that was already under strain before the conflict.
Beyond physical damage, policy-driven disruptions have compounded the losses.
Internet shutdown
A nationwide internet blackout beginning Feb. 28 has imposed additional costs.
Direct losses are estimated at $37 million to $42 million per day, totaling $1.5 billion to $2.5 billion over more than five weeks.
Afshin Kolahi, a member of Iran’s Chamber of Commerce, said Monday indirect losses could raise the daily figure to $70 million to $80 million due to disruption to online businesses.
Online sales fell by about 80% during the shutdown, while the Tehran Stock Exchange lost 450,000 points within four days.
The shutdown is affecting multiple layers of the economy simultaneously, according to economic analyst Masoumeh Taherkhani.
“The Iranian economy is damaged at three levels by internet disruption, starting with the digital core, which employs between four and five million people,” Taherkhani told Iran International. “Then the platform layer collapses, and finally the broader economy is affected in a way that spreads across production and services.”
Taherkhani said the combined effect leads to widespread job losses. “When the economy is fully stagnant, the outcome is unemployment for workers, and that is not something that can easily be reversed,” she said.
Trade disruption and self-inflicted losses
Disruptions linked to the Strait of Hormuz have added further pressure, with estimated losses of $5 billion to $15 billion.
The restrictions have affected imports of essential goods and weakened non-oil exports, contributing to supply chain disruptions across the economy.
A US naval blockade targeting Iran’s maritime trade routes is expected to deepen losses.
Sanctions strategist and former US Treasury official Miad Maleki estimated that cutting off seaborne trade could eliminate about $435 million in daily economic activity, equivalent to roughly $13 billion per month.
Iran relies on the Persian Gulf for more than 90% of its trade, leaving it highly exposed to sustained disruption.
Oil exports of about 1.5 million barrels per day – generating roughly $139 million daily – could be halted almost entirely, removing the country’s main source of foreign currency.
What the losses could have funded
The scale of damage corresponds to investment levels that could have reshaped core sectors of the economy.
A large combined-cycle power plant with capacity of around 1,000 to 1,500 megawatts typically costs between $600 million and $1 billion to build, depending on technology and fuel infrastructure.
At the lower estimate of $150 billion in losses, Iran could have financed roughly 150 to 250 such plants. At the upper estimate of $300 billion, that rises to between 300 and 500 plants, enough to eliminate electricity shortages and significantly expand export capacity.
In housing, average construction costs for a modest apartment unit range between $30,000 and $50,000. With $150 billion, between 3 million and 5 million housing units could have been built. At $300 billion, that increases to roughly 6 million to 10 million units, enough to address shortages across major urban areas.
High-speed rail construction typically costs between $20 million and $40 million per kilometer. The lower estimate of losses could have funded approximately 3,750 to 7,500 kilometers of rail, while the higher estimate could support up to 15,000 kilometers, connecting major cities nationwide.
A modern hospital costs between $200 million and $500 million to construct and equip. The lower-end losses could have built 300 to 750 hospitals, while the higher estimate could fund up to 1,500 facilities, expanding healthcare access across the country.
What it means for individual Iranians
The per capita loss of up to $3,250 represents a substantial share of annual income for many households.
With average monthly earnings between $150 and $200, an individual earns roughly $1,800 to $2,400 per year, meaning a $3,250 equivalent exceeds a full year of income for many citizens.
If such an amount were available, it could cover between 12 and 20 months of living expenses for an average worker. Families could use it toward housing costs, including down payments or completing home purchases in smaller cities.
Small businesses could be launched with startup capital of $2,000 to $5,000, enabling self-employment in sectors such as retail, services or online commerce. Households could also afford private healthcare, education or relocation costs that are otherwise beyond reach.
Even the lower estimate per person represents several months of income, providing a buffer against inflation, job loss or unexpected expenses.
The overall range reflects damage already incurred, with additional losses building as trade, production and financial flows remain disrupted.
At up to $3,250 per person and rising, the economic toll underscores the scale of damage to Iran’s productive capacity, with long-term implications for recovery and growth.
