Iran’s war-shattered economy means it has an urgent reason to negotiate

Subscribe to enjoy similar stories.Iranian leaders have portrayed the current cease-fire as a victory against an overwhelming U.S. and Israeli onslaught.

But they now face a towering postwar reconstruction challenge that is putting pressure on them to negotiate for sanctions relief.The U.S. and Israel hit at least 17,000 targets over five weeks of war, including factories; rail, road and port infrastructure; government buildings; and military facilities.

Iranian state media put the cost to rebuild at $270 billion, though analysts said it was too early for an estimate as the impact of the damage filters through the economy.Rebuilding will be complicated by the interlocking nature of the damage done by attacks aimed at dragging out the country’s road to recovery. The air campaign not only hit infrastructure but the facilities producing material such as steel that is needed to repair it and operations such as petrochemicals that bring in the foreign currency to pay for the work.The physical damage adds to an economic crisis that was already so severe it sparked mass protests that shook the country around the new year.

While Iran’s control of the Strait of Hormuz and ability to hit targets across the Gulf have given it leverage in talks with the U.S., the scale of the necessary rebuilding limits its room to maneuver.“Iran insiders are rumbling about the looming economic catastrophe if Washington does not grant sanctions relief that would unlock prospects for economic recovery,” said Burcu Ozcelik, senior research fellow with the London-based Royal United Services Institute think tank. “Without the prospect of economic recovery, regime survival beyond the short term will face sustained structural and popular pressure.”The