The United Nations Development Program (UNDP) has estimated losses in Iran (between June 13, 2025, and mid-June 2026) to be between $400 billion and $600 billion, warning that the losses could be far greater if a comprehensive field survey were permitted (the Iranian regime forbids even discussing.
Khurshid Alam, an expert at the program, says the scale of the losses is catastrophic in every sense of the word. He notes that Iran’s economy was already deeply in crisis before the war. Inflation, he points out, has reached around 90 percent, while unemployment is estimated at about 66 percent; 55 percent of Iranians live below the poverty line, with another 23 percent standing on its edge.
Some among the Iranian leadership are aware of the scale of the catastrophe. They are therefore seeking to end the war and begin a push effort that will take years and require a radical change in approach. Only then can Iran return to the international community and obtain the expertise and investment needed to rebuild what the war has destroyed.
This path, however, faces opposition from hard-liners in the IRGC who believe that the United States and the West are in a moment of weakness and are desperate for an agreement with Iran that ends the crisis caused by the closure of the Strait of Hormuz. This faction believes that this opportunity may not come again, and that continuing the confrontation would grant Tehran a stronger position on the international stage. It is therefore pushing for further escalation despite the economic and living costs, hoping to force the West to accept Iran’s terms.
In the coming weeks, Iran may find itself facing two paths: either a deeper economic collapse if the talks in Switzerland fail, or a major shift in its policies that opens the door to a return to the international community and to the start of efforts to address one of the worst disasters the country has seen in decades.
US President Donald Trump has exerted mounting pressure on the Iranian regime in an attempt to deepen divisions within the institutions of power, seeking to create impression that internal rifts already exist, even if they are not visible to those unfamiliar with the nature of the regime and how it operates.
After Trump reposted a tweet by Iranian Foreign Minister Abbas Araghchi, there were strong reactions in Iran. In the city of Mashhad, a number of hard-liners loyal to the late Supreme Leader Ali Khamenei gathered outside the Foreign Ministry and chanted slogans accusing Araghchi of treason and infiltration, going so far as to demand his execution.
At the same time, groups affiliated with the hard-line camp organized protests across the country, while police chief Ahmad Reza Radan warned that any move against what he called “national unity,” or against the agreement, would be met with repression.
In his final years, the late Supreme Leader Ali Khamenei was deeply suspicious even of the Revolutionary Guard, which had been created to protect the regime. For this reason, he was careful to distribute centers of power within the regime so that no single person or faction could monopolize influence or money. He kept the various wings in a state of constant rivalry to prevent any one of them from seizing complete control.
At the same time, the elder Khamenei relied on a group intensely loyal to him personally, made up of people recruited from the poorest and most marginalized classes, and used them to manage the balance of power within the regime and monitor the other centers of influence.
With the elder Khamenei gone, these forces entered an open struggle for power, as the political vacuum left the door open to competition among the various wings. Reports indicate that an influential group within the regime had closed ranks around the elder Khamenei and curtailed the roles of its most prominent rivals, among them former President Ebrahim Raisi and Foreign Minister Hossein Amir-Abdollahian. The two men died in a helicopter crash in 2024, clearing the way for new arrangements within the power structure.
Hard-line circles believe Araghchi has come to embody this course of action, which is why they brand him a traitor and an infiltrator. In their view, the regime is being dismantled from within.
After the ceasefire, the centers of power had a chance to close ranks. Continued American pressure, however, is pushing them to resolve the internal struggle more quickly, at a time when the confrontation over power, oil revenues, smuggling networks, and sanctions-evasion channels is coming to a head.
Proponents of this view believe that continued infighting among the regime’s wings will exhaust and weaken it from within, without exposing American or Israeli soldiers to danger, and without Iranian protesters having to pay a fresh price in the streets.
This thinking also bets that allowing the Americans into Iran to transfer the uranium stockpile, if done under non-wartime conditions, will confront the regime with a major challenge. The presence of American monitors would make it harder to suppress protests and would also make it easier to support the opposition inside the country. It was noted that on the first day of the negotiations in Switzerland, Trump posted two threats in response to Hezbollah’s attacks on the Israeli army and to Iranian threats to close the strait. The Iranian negotiators flew into a rage, issued hostile statements, refused to shake hands or pose for photographs, and so on.
They panicked because they had received no instructions from Vahidi, the younger Khamenei, or the Supreme Council of Trustees. However, their panic showed that President Trump’s posts had hit their target (the Iranian leadership) and that Trump frightens them and shapes their behavior.
In their panicked reaction to those tweets, they laid bare of Iran’s weakness and disarray.
In a scene rich with symbolism, women from the hard-line camp appeared wearing, over their chadors, the white shroud used in Islamic burial rites, signaling that they are willing to die in defense of the regime.
