Iran Warns of Readiness for War and Economic Burden as US Talks Stall

Tehran, Iran – Iranian Foreign Minister Abbas Araghchi declared that the country remains ready to resume direct military conflict with the US if negotiations do not yield the desired results. The statement comes amid a series of coordinated state messages aimed at both domestic and international audiences.

Araghchi warned that a US-Israel war against Iran would not only devastate the region but also impact American households. Since the conflict erupted on February 28, the Strait of Hormuz, which carries about one-fifth of the world's oil and gas, has been effectively blockaded, driving up energy costs and inflation in the US.

“Americans are told they must bear the escalating costs of a self-inflicted war against Iran,” Araghchi wrote on X, accompanied by an image showing rising US Treasury bond yields. “Ignoring gasoline price hikes and stock market bubbles, the real pain begins when US debt and mortgage rates soar. Bad car loans are already at 30-year highs.”

Araghchi’s message to Americans essentially stated that US inflation would persist as long as the threat of war continues, and that pressure would soon translate into higher borrowing costs, raising the risk of recession.

Iranian Parliament Speaker Mohammad Bagher Ghalibaf, who led the first round of talks with the US in April, also highlighted the financial cost of the war on Americans, but with a more ironic tone. “So you are funding [Pete] Hegseth – the failed TV host – with interest rates unseen since 2007, so he can play dress-up as Secretary of War in our backyard at Hormuz?” Ghalibaf wrote on X. “What is crazier than $39 trillion in debt? Paying pre-Financial Crisis era interest rates to fund a role-play, and what you get in return is a whole new financial crisis.”

The comments came after the US government successfully auctioned $25 billion in 30-year bonds at a yield of 5% on May 13, a level not seen in nearly two decades. The 10-year Treasury yield hit its highest in about a year on May 16, as traders anticipated the Federal Reserve might raise interest rates to counter soaring inflation in global energy markets due to the Hormuz blockade.

A key sticking point in US-Iran negotiations is the future of the Strait of Hormuz. Iran insists any deal with Washington must grant Tehran sovereignty over the waterway, a demand rejected by other Gulf states who consider the strait international. Ebrahim Azizi, head of Iran’s Parliamentary National Security Committee, said on May 17 that Tehran has “prepared a professional mechanism for managing traffic in the Strait of Hormuz along a predetermined route, which will soon be announced.” He emphasized that only commercial vessels and parties cooperating with Iran would benefit, while ships from countries supporting the US “Freedom Project” would be denied access, and vessels would be required to pay fees.

Conversely, Iranian households are suffering from rising costs. Official data shows food inflation hit 115% in the first month of the Persian year (ending late April), with staples like cooking oil, rice, and chicken tripling in price compared to last year. Food, medicine, electronics, cars, and petrochemical products have reached new highs in recent weeks. The Iranian rial traded at around 1.8 million to the dollar on the open market in Tehran on May 17, near its record low.

Iran says a lack of trust with the US is a major obstacle in negotiations, evident in the failure of meetings in Islamabad last month to end the war. However, after President Donald Trump’s visit to China, Foreign Minister Araghchi stated Tehran welcomes mediation from Beijing.

While a fragile ceasefire holds, the Iranian regime calls on supporters to take to the streets every evening, seeing it as essential to achieving “victory” over the US. State television intensified messaging on the evening of May 16, with multiple channels broadcasting hosts holding assault rifles. State-run Ofogh channel invited a masked commander of Iran’s Islamic Revolutionary Guard Corps (IRGC) to guide viewers on loading a variant of the AK-47. The segment ended with the host firing a shot into the ceiling, then taking another aim at the UAE flag amid rising tensions with that Gulf state. On Channel 3, host Mobina Nasiri carried a rifle and said she was ready to “sacrifice” her life for Iran.

Major squares and streets in Iran remain crowded with armored vehicles and checkpoints guarded by armed men. Thousands of anti-government protesters have been killed in nationwide demonstrations since January, which the regime describes as a “coup plot” directed by the US and Israel. Iranian authorities imposed a near-total internet shutdown for 78 days and pushed a tiered access plan for restricted services. The judiciary has announced the execution of alleged dissidents almost daily throughout the war.