Category World News

Tehran, Iran – The Iranian government is putting into place contingency plans for basic governance as the threat of another war with the United States and Israel looms large.

President Masoud Pezeshkian gathered governors of Iran’s border provinces as well as his economy minister in Tehran on Tuesday to delegate some responsibilities to the governors if a war breaks out, state media reported. A working group was also formed, tasked with ensuring the increased flow of essential goods, particularly food.

The governors have been given authority to import goods without using foreign currency, engage in bartering and allow sailors to bring in products under simplified customs rules, according to the government-run IRNA news agency.

“In addition to importing essential goods, governors now have the authority to bring in all goods that are directly linked with the livelihoods of the people and the needs of the market in order to balance the market and prevent hoarding,” Pezeshkian was quoted as saying at the meeting.

“Through enforcing this policy, a considerable part of the pressures resulting from the cruel sanctions are neutralised,” he said in reference to harsh restrictions imposed by the US as well as United Nations sanctions reimposed in September, which the Iranian government blames for the economic crisis the country is going through.

But while the government resorts to focusing on the basics, nearly all of Iran’s 90 million people and all sectors of the country’s beleaguered economy continue to suffer from an unprecedented internet shutdown.

The digital blackout was imposed by the theocratic state on January 8 as nationwide protests reached a boiling point, followed by the killings of thousands of Iranians.

The intranet set up to offer some basic services during the state-imposed shutdown is slow and has failed to shore up online businesses. Traditional shops are also struggling to bring in customers.

Economic trouble persists

Amid a large deployment of armed security personnel, most shops are now open in Tehran’s Grand Bazaar – where the protests against the poor economic conditions started on December 28 – and other downtown business districts.

But a shopkeeper at the Grand Bazaar told Al Jazeera that business activity is a fraction of what it was several weeks ago.

“There’s not much life and energy in the markets these days,” he said on the condition of anonymity. “The worst thing is that everything is still so unpredictable. You can see that in the currency rate too.”

Iran’s rial has been in freefall after markets partially reopened this week, degrading trust in the national currency.

The rial hit a new all-time low of about 1.6 million per US dollar on Wednesday. Each greenback had changed hands for about 700,000 rials a year ago and about 900,000 in mid-2025.

However, Central Bank of Iran chief Abdolnasser Hemmati said at the meeting with the governors in Tehran that the currency market was “following its natural course”.

He said $2.25bn worth of foreign currency deals have in recent weeks been registered in a state-run market set up to manage imports and exports, which he described as an “acceptable and considerable figure”.

The comments from Hemmati – who was also the Central Bank chief from 2018 to 2021 and was impeached as economy minister in March – immediately drew fire from the ultraconservative Keyhan newspaper, whose editor-in-chief is directly appointed by Supreme Leader Ali Khamenei.

The newspaper said his comments run counter to the reality in the tumultuous currency market as well as Hemmati’s promises of price stability for essential goods when he re-emerged as the Central Bank governor last month.

While dealing with foreign pressure, Pezeshkian’s government has also been hounded by hardliners at home who have demanded immediate changes to his relatively moderate cabinet.

The infighting became so serious that the supreme leader publicly intervened, telling lawmakers in parliament and other officials during a speech last week that they are “forbidden” from “insulting” the president at a time when the country must focus on providing essential goods to the people.

Subsidy scheme

For his part, Pezeshkian has kept his rhetoric focused solely on “combating corruption” through an initiative that has eliminated a subsidised currency rate used for imports of certain goods, including food.

Pezeshkian’s government argued the subsidised allocated currency was being misused by state-linked organisations. The scheme was supposed to deliver cheaper imported food, but that has not been the case.

The money freed up by the initiative has been distributed as electronic coupons among Iranians to buy food from select stores at prices set by the government.

But each citizen will get only 10 million rials per month for four months. That figure amounted to just over $7 when it was announced during the protests early this month, but it is now worth closer to $6 as the fall of the national currency further erodes purchasing power.

To add insult to injury, the announcement of the subsidy scheme contributed to an abrupt tripling or quadrupling of prices for some essential goods, including cooking oil and eggs. Iran’s annual inflation rate remains untamed at nearly 50 percent and has been on a rising trajectory in recent months.

The top two state-run carmakers, which hold a large monopoly in Iran’s auto industry, have also been positioning themselves for yet another price hike as the end of the Iranian calendar year approaches in March.

One of the firms, Iran Khodro, said on Tuesday that it would increase prices by up to 60 percent while local media reported that the other, Saipa, was expected to follow suit. The government has reportedly intervened to delay or slow the price hikes.

Eleven countries have condemned Israel’s demolition of the East Jerusalem headquarters of the United Nations agency for Palestinian refugees, saying it “marks the latest unacceptable move to undermine” UNRWA’s work.

In a joint statement on Wednesday, the foreign ministers of Belgium, Canada, Denmark, France, Iceland, Ireland, Japan, Norway, Portugal, Spain and the United Kingdom slammed the demolition as an “unprecedented act” against a UN agency.

“We call upon the Government of Israel, a member of the United Nations, to halt all demolitions,” they said.

Israel has carried out an intensified pressure campaign against UNRWA, which provides aid and services to Palestinian refugees across the Middle East, amid the country’s genocidal war against Palestinians in the Gaza Strip.

Without concrete evidence, the Israeli government and its allies, including the United States, have accused UNRWA of being linked to Hamas – a claim rejected by the UN.

Israel has used those allegations to try to restrict UNRWA’s ability to operate in Gaza, despite humanitarian leaders noting that the agency is best equipped to distribute food, water, medicine and other critical humanitarian aid in the war-ravaged enclave.

In late 2024, Israel’s parliament passed legislation barring UNRWA from operating in areas under Israeli control.

Israeli lawmakers approved amendments in December of last year to strengthen that prohibition, drawing condemnation from UN Secretary-General Antonio Guterres.

Last week, UNRWA reported that Israeli forces, under the watch of Israeli lawmakers, stormed its East Jerusalem headquarters and began demolishing buildings.

“This constitutes an unprecedented attack against a United Nations agency & its premises,” UNRWA chief Philippe Lazzarini wrote on social media.

“Like all UN Member States & countries committed to the international rule-based order, Israel is obliged to protect & respect the inviolability of UN premises.”

Lazzarini said Israel’s anti-UNRWA moves “fly in the face” of an October 2025 ruling by the International Court of Justice, which said Israel has an obligation under international law to lift restrictions on the agency’s operations and facilitate its work.

“The United Nations, acting through UNRWA, has been an indispensable provider of humanitarian relief in the Gaza Strip,” the court said in its ruling (PDF).

Therefore, it said that, “Israel is under an obligation to agree to and facilitate relief schemes provided by the United Nations and its entities, including UNRWA.”

Call to let aid into Gaza

In Wednesday’s statement, the 11 foreign ministers reiterated their “full support for UNRWA’s indispensable mission” to provide services and humanitarian aid in the occupied Palestinian territory, including East Jerusalem.

“UNRWA is a service provider delivering healthcare and education to millions of Palestinians across the region, particularly in Gaza, and must be able to operate without restrictions,” they said.

The ministers also called on Israel to facilitate aid deliveries to Gaza, where at least 71,660 Palestinians have been killed in Israeli attacks since October 2023.

“Despite the increase in aid entering Gaza, conditions remain dire, and supply is inadequate for the needs of the population,” the statement read.

As the occupying power in Gaza, Israel has an obligation under international law to ensure the needs of the occupied population are met.

The Israeli government also agreed under a US-brokered ceasefire deal, which came into effect in October, to allow 600 trucks of humanitarian aid into the Palestinian territory each day. But it has failed to adhere to that tenet of the agreement.

Fears of a US attack on Iran are again heightened after Donald Trump demanded Tehran submit to his demands or face an attack “like with Venezuela.”

Secretary of State Marco Rubio has defended the United States abduction of Venezuelan leader Nicolas Maduro before a Senate committee, arguing the operation did not constitute an act of war while framing the attack as a strategic necessity.

The hearing before the Senate Foreign Relations Committee on Wednesday offered the latest window into the administration’s thinking behind the extraordinary January 3 abduction of Maduro, who remains in a New York prison awaiting drug trafficking and narco-terrorism conspiracy charges.

Rubio began the hearing by underscoring the operation as a “strategic” necessity for the Trump administration, while downplaying what United Nations Experts have decried as a flagrant violation of international law.

Rubio described Venezuela under Maduro as a “base of operation for virtually every competitor, adversary and enemy in the world”. He listed Venezuela’s alleged ties to Iran, Russia and Cuba.

“[Having Maduro in power] was an enormous strategic risk for the United States, not halfway around the world, not in another continent, but in the hemisphere in which we all live, and it was having dramatic impacts on us, but also on Colombia and on the Caribbean Basin and all sorts of other places,” he told lawmakers.

“It was an untenable situation, and it had to be addressed, and now the question becomes what happens moving forward,” he said.

Rubio said the US had three objectives in the South American country, the culmination being “a phase of transition where we are left with a friendly, stable, prosperous Venezuela – and democratic”.

In that, Rubio defended the decision of US President Donald Trump to continue working with the government surrounding Maduro, including interim President Delcy Rodriguez, while not initially supporting an opposition takeover.

Rubio said the first objective was avoiding civil war in Venezuela and aiming to “establish direct, honest, respectful, but very direct and honest conversations with the people who today control the elements of that nation”.

He said the second objection aims for “period of recovery … and that is the phase in which you want to see a normalised oil industry”.

Speaking before Rubio, Senator Jeanne Shaheen, the top Democrat on the Senate, focused little on the wider international law implications of the Trump administration’s approach to Venezuela.

Instead, she emphasised the cost, noting that the military operation and ongoing naval blockade have been estimated by some outside analysts to cost $1bn.

“So it’s no wonder that so many of my constituents are asking, why is the president spending so much time focused on Venezuela instead of the cost of living and their kitchen table economic concerns?”

Senator Rand Paul, a Republican, was more direct, asking Rubio is the operation against Maduro constituted an act of war.

“We just don’t believe that this operation comes anywhere close to the constitutional definition of war,” Rubio responded, arguing that Maduro’s election in 2024 had been contested and that he had been indicted on US drug trafficking charges.

Paul, who has been a vocal advocate of passing legislation asserting congressional oversight over future actions in Venezuela, described the arguments as “empty”.

Emphasis on oil

During his testimony, Rubio appeared to downplay the prospect of future attacks on Venezuela, even as a blockade on sanctioned oil tankers remains in effect and US military assets remain surged to the region.

“We are not postured and do not expect to take military action,” Rubio said. Still, he declined to rule out future strikes to protect US interests.

The secretary of state also laid out plans for Venezuela’s oil industry, which has been a key emphasis of the Trump administration.

He said Washington and Caracas reached an agreement that “on the oil that is sanctioned and quarantined, we will allow you to move it to market … In return, the funds from that will be deposited into an account that we will have oversight over, and you will spend that money for the benefit of the Venezuelan people.”

He called the plan a “short-term mechanism”.

“And so we have created that, we hope to do is transition to a mechanism that allows that to be sold in a normal way, a normal oil industry, not one dominated by cronies, not one dominated by graft and corruption,” Rubio added.

He further hailed a law passed by Venezuela’s legislature that allows for more international access to the country’s oil industry.