Iran's Rial Hits a Record Low, Battered by Regional Tensions and Energy Crisis

An Iranian trader counts money in Tehran's Grand Bazaar. (Reuters)
An Iranian trader counts money in Tehran's Grand Bazaar. (Reuters)
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Iran's Rial Hits a Record Low, Battered by Regional Tensions and Energy Crisis

An Iranian trader counts money in Tehran's Grand Bazaar. (Reuters)
An Iranian trader counts money in Tehran's Grand Bazaar. (Reuters)

The Iranian rial on Wednesday fell to its lowest level in history, losing more than 10% of value since Donald Trump won the US presidential election in November and signaling new challenges for Tehran as it remains locked in the wars raging in the Middle East.

The rial traded at 777,000 rials to the dollar, traders in Tehran said, down from 703,000 rials on the day Trump won.

Iran’s Central Bank has in the past flooded the market with more hard currencies in an attempt to improve the rate.

In an interview with state television Tuesday night, Central Bank Gov. Mohammad Reza Farzin said that the supply of foreign currency would increase and the exchange rate would be stabilized. He said that $220 million had been injected into the currency market, The AP reported.

The currency plunged as Iran ordered the closure of schools, universities, and government offices on Wednesday due to a worsening energy crisis exacerbated by harsh winter conditions. The crisis follows a summer of blackouts and is now compounded by severe cold, snow and air pollution.

Despite Iran’s vast natural gas and oil reserves, years of underinvestment and sanctions have left the energy sector ill-prepared for seasonal surges, leading to rolling blackouts and gas shortages.

In 2015, during Iran’s nuclear deal with world powers, the rial was at 32,000 to $1. On July 30, the day that Iran’s reformist President Masoud Pezeshkian was sworn in and began his term, the rate was 584,000 to $1.

Trump unilaterally withdrew America from the accord in 2018, sparking years of tensions between the countries that persist today.

Iran’s economy has struggled for years under crippling international sanctions over its rapidly advancing nuclear program, which now enriches uranium at near weapons-grade levels.

Pezeshkian, elected after a helicopter crash killed hard-line President Ebrahim Raisi in May, came to power on a promise to reach a deal to ease Western sanctions.

Tensions still remain high between the nations, 45 years after the 1979 US Embassy takeover and the 444-day hostage crisis that followed. Before the revolution, the rial traded at 70 for $1.



Oman’s Dhahirah: A Strategic Gateway Strengthening Trade with Saudi Arabia

Oman has developed an integrated economic zone in Dhahirah. (Asharq Al-Awsat)
Oman has developed an integrated economic zone in Dhahirah. (Asharq Al-Awsat)
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Oman’s Dhahirah: A Strategic Gateway Strengthening Trade with Saudi Arabia

Oman has developed an integrated economic zone in Dhahirah. (Asharq Al-Awsat)
Oman has developed an integrated economic zone in Dhahirah. (Asharq Al-Awsat)

In the heart of Dhahirah Governorate in northwestern Oman, a key economic zone is emerging—not just as a border crossing but as a vital trade and logistics hub linking Oman and Saudi Arabia.

The border crossing in the Empty Quarter, located about 170 kilometers from Ibri, plays a crucial role in facilitating commercial convoys and enhancing logistical integration between the two countries.

Recognizing the strategic significance of this route, Oman has developed an integrated economic zone in Dhahirah, spanning 388 square kilometers and situated just 20 kilometers from the border. This joint Omani-Saudi project aims to capitalize on the region’s geographic and commercial advantages, driving economic growth and attracting investment.

The initiative aligns with Saudi Vision 2030 and Oman Vision 2040, both of which prioritize economic diversification and regional cooperation. The project is expected to foster sustainable growth, create job opportunities, and position the area as a major economic hub in the Gulf.

The Dhahirah Economic Zone will offer diverse investment opportunities to support cross-border trade, including business complexes and industrial zones specializing in agriculture, livestock, and mining. It will also feature a 4-square-kilometer dry port, a logistics hub, warehouses, and import-export companies.

Speaking to Asharq Al-Awsat, Ibri Governor Dr. Saeed Al-Harthi emphasized the strategic importance of the Saudi-Omani border crossing, highlighting that the new economic zone will be a major catalyst for development. He noted that trade between the two nations has surged by approximately 360% between 2022 and 2024.

The first phase of infrastructure development for the zone is estimated to cost around 120 million Omani rials ($312 million), with strong backing from both governments to ensure the project’s success.

Additionally, Dhahirah has seen the launch of the Ibri Solar Power Plant, Oman’s largest, with an investment of $403 million. Covering 13 million square meters, the plant has a production capacity of 500 megawatts. According to Al-Harthi, the first phase has been completed, with the second phase underway, contributing to Oman’s goal of achieving net-zero emissions by 2050.

The industrial city within the zone is also a key component of Oman’s strategy to support private sector growth and small-to-medium enterprises (SMEs), with an estimated contribution of $3.9 million to SME development.

Strategically positioned near the Empty Quarter border crossing, the industrial city is set to become a hub for manufacturing and logistics, strengthening economic ties between Oman and Saudi Arabia.

Commenting on the project’s progress, Majid Al-Muqrashi, Director of Financial and Administrative Affairs at Ibri Industrial City, told Asharq Al-Awsat that since the first phase’s inauguration in 2024—spanning 3 million square meters at a cost of $23.4 million—the city has seen significant growth.

He revealed that 15 contracts have been signed with investors across various sectors, with 191,000 square meters already leased. While some projects remain under construction, additional contracts are in the finalization stage, further cementing Dhahirah’s role as a key economic hub in the region.