Iran Threatens U.S. and Israel as Protests Enter Third Week

Iranian protests have entered their third week, with escalating unrest and mounting casualties. Demonstrators have taken to the streets over economic grievances, particularly the devaluation of the rial, which now trades at over 1.4 million to $1. The government has responded with crackdowns and a hardening stance, while international tensions are rising as the U.S. and Iran exchange threats.

U.S. President Donald Trump has pledged support for the protesters, warning Iran that any violence against demonstrators could trigger a strong response. 'We’re watching it very closely. If they start killing people like they have in the past, I think they’re going to get hit very hard by the United States,' Trump said aboard Air Force One.

Iran’s Supreme Leader, Ayatollah Ali Khamenei, has dismissed Trump’s comments, urging the U.S. leader to focus on his own country’s issues. 'The President of the United States declared that if the Iranian government did this or that, he would side with the rioters. The rioters have placed their hopes in him. If he is so competent, let him manage his own country then,' Khamenei said.

The U.S. Treasury Secretary, Scott Bessent, has emphasized the precarious state of Iran’s economy. 'The Iranian economy is on the ropes. It’s a very precarious moment. He does not want them to harm more of the protesters. This is a tense moment,' Bessent told the Economic Club of Minnesota.

Iran’s economy has been struggling with high inflation and deepening hardship. U.S. sanctions and mismanagement have contributed to the financial turmoil. The protests began in response to the devaluation of the rial but have since evolved into broader challenges to the regime.

Trump has warned that the U.S. would respond if Iran uses violence against the protesters. 'Iran is looking at FREEDOM, perhaps like never before. The USA stands ready to help!!!' Trump posted on Truth Social.

Iranian authorities have taken steps to manage the unrest, including implementing economic measures to ease hardship. Government spokesperson Fatemeh Mohajerani announced new subsidies to help households afford basic goods. The measures include tripling subsidies for food purchases, among other support.

Despite these efforts, the situation remains volatile. Security forces have faced attacks in several locations, including Kermanshah and Chenaran. Reports indicate that some security officials have been killed or wounded.

Why Did This Happen?

The protests began in response to the economic crisis, particularly the devaluation of the rial. The currency’s decline has been driven by U.S. sanctions and mismanagement. Iranian citizens are struggling with high inflation and rising living costs, which have made basic goods unaffordable for many. According to reports, the situation has been exacerbated by the aftermath of the 12-day war with Israel and the U.S., which damaged parts of Iran’s nuclear infrastructure. The government has accused foreign powers of stoking the protests, but critics argue that the unrest is rooted in domestic economic grievances.

How Did Markets Respond?

The oil market has taken notice of the unrest in Iran. The potential for supply disruptions has pushed Brent crude to nearly $63 a barrel, with a $2 per barrel gain in the last week. The market is also watching developments in Venezuela, where U.S. engagement has slowed production expectations.

Other markets have also felt the impact. China has increased its purchases of Saudi crude, while U.S. aluminum prices have surged due to tariffs. The global economy is bracing for potential volatility as tensions in the Middle East continue.

What Are Analysts Watching Next?

Analysts are closely monitoring the potential for U.S. military action in response to violence against protesters. Trump’s rhetoric has raised concerns about escalation, but there has been no clear indication of a U.S. response so far.

The government’s ability to manage the economic crisis will also be a key factor. If Iran fails to stabilize its currency and inflation, the protests may continue to grow. The international community is watching to see whether the U.S. will follow through on its threats or take a more diplomatic approach.

The situation in Iran is a reminder of the complex interplay between economic policy, political stability, and international relations. As the protests continue, the world will be watching for signs of how the situation will evolve and what impact it may have on global markets. According to market analysis, the unrest has already influenced oil prices and global market sentiment.