The Geopolitical Exploitation of Iran's Economic Crisis: When Human Suffering Becomes Proxy Warfare

The Economic Unrest and Political Context

Iran is facing one of the most severe economic crises in its modern history, with annual inflation reaching 42.2% in December 2025 and food prices skyrocketing by an alarming 72%. This economic catastrophe has triggered widespread protests that began on December 28, 2025, initially with Tehran shopkeepers rallying against the deteriorating economic conditions. The demonstrations have since spread to other cities, drawing in students and ordinary citizens who are bearing the brunt of this economic collapse. The protests have turned violent, with local media reporting the deaths of at least six civilians, transforming economic grievances into a deadly confrontation between the people and the regime.

The economic turmoil occurs against the backdrop of prolonged international sanctions and geopolitical tensions. Since former President Trump withdrew the United States from the Iranian nuclear deal in 2018 and re-imposed sanctions on the country, Iran’s economy has struggled under the weight of international isolation. The situation escalated further in June of the previous year when U.S. strikes on Iranian nuclear sites heightened tensions, effectively pulling Washington into Israel’s ongoing conflict with its regional rival. This complex web of economic hardship and international pressure has created a powder keg that has now ignited into open protest and violence.

The Internationalization of Domestic Protest

The domestic Iranian protests have rapidly become internationalized through the interventions of multiple external actors. Israel’s Mossad spy agency issued a direct call on December 31, 2025, urging Iranians to continue their protests and claiming to support them “on the ground” as demonstrations spread through Tehran and other Iranian cities. This unprecedented statement represents a bold and dangerous escalation in the long-standing shadow war between Israel and Iran.

Simultaneously, former President Donald Trump inserted himself into the crisis with inflammatory statements on Truth Social, threatening that if Iran “violently” intervenes with peaceful protests, then the U.S. will “come to their rescue.” Trump’s declaration that “We are locked and loaded and ready to go” represents a reckless escalation of rhetoric that could potentially commit American forces to another Middle Eastern conflict. His additional threats of military action if Iran attempts to build up its ballistic weapons reserves or reestablish its nuclear program further complicate an already volatile situation.

Iranian leadership has responded with equal belligerence. Supreme Leader adviser Ali Larijani stated that U.S. interference in Iran’s protests was equivalent to chaos across the entire region, while President Masoud Pezeshkian warned that Iran’s response to any “oppressive aggression will be harsh and regrettable.” This exchange of threats between world powers over what began as domestic economic protests represents a dangerous new phase in international relations.

Expert Analysis and Regional Implications

Suzanne Maloney, vice president and director of foreign policy at the Brookings Institution, provided crucial context about the nature of these protests. She observed that the Iranian people are calling not just for economic relief but for regime change, noting that Supreme Leader Ayatollah Ali Khamenei has been in power for 36 years. The protests include cries of “Death to the dictator” and slogans that juxtapose the regime’s support for militia groups across the region with the real interests and demands of the Iranian people.

This expert analysis suggests that the current protests represent something deeper than mere economic dissatisfaction—they reflect a fundamental questioning of the Islamic Republic’s legitimacy and priorities. The regime’s extensive support for regional proxies and military adventures while ordinary Iranians struggle to afford basic necessities has created a credibility gap that can no longer be ignored.

The U.S. administration has further complicated matters by announcing sanctions on a group of 10 individuals and entities based in Iran and Venezuela that are allegedly linked to weapons trade between the two countries. This move, while targeted at specific actors, effectively tightens the economic pressure on Iran at the precise moment when its economy is collapsing and its people are suffering immensely.

The Dangerous Path of Geopolitical Exploitation

The transformation of domestic economic protests into an international crisis represents one of the most dangerous developments in modern geopolitics. What began as legitimate grievances about economic hardship and government mismanagement has been hijacked by multiple external actors pursuing their own geopolitical agendas. Israel’s Mossad encouraging continued protests, former President Trump threatening military intervention, and Iranian leadership responding with threats of retaliation—all these actions risk turning the suffering of ordinary Iranians into a proxy conflict that could destabilize the entire region.

This situation represents a fundamental betrayal of the Iranian people’s right to peaceful protest and self-determination. Instead of allowing Iranians to voice their economic grievances and seek political solutions, external powers are exploiting their suffering to advance their own strategic objectives. The potential for miscalculation, escalation, and outright conflict is terrifyingly high when economic protests become subsumed into broader geopolitical rivalries.

The rhetoric employed by all sides demonstrates a reckless disregard for human life and regional stability. Trump’s “locked and loaded” comments and Iran’s threats of “harsh and regrettable” responses create a dynamic where saving face and demonstrating resolve become more important than protecting civilian lives and seeking peaceful resolutions. This macho posturing on all sides risks creating a self-fulfilling prophecy of conflict that nobody truly wants but that all parties feel compelled to prepare for.

The Human Cost of Geopolitical Gamesmanship

At the heart of this crisis are ordinary Iranians who are suffering from economic collapse, food insecurity, and now violence in the streets. The reported deaths of at least six civilians represent not just statistics but human lives lost—people who were likely protesting not for geopolitical reasons but because they couldn’t afford to feed their families or maintain their livelihoods. Their suffering is being exploited by multiple actors for purposes they never envisioned when they took to the streets.

The economic numbers tell a story of human misery: 42.2% annual inflation means savings evaporating, pensions becoming worthless, and economic security disappearing. Food prices jumping 72% means families going hungry, parents skipping meals to feed their children, and nutritional standards collapsing. These are not abstract economic indicators—they represent real human suffering that demands address through economic reform and humanitarian assistance, not geopolitical maneuvering and military threats.

The international community’s response to this crisis has been fundamentally misguided. Rather than focusing on humanitarian assistance, economic support, and diplomatic engagement to address the root causes of the protests, the dominant responses have been threats of military action, encouragement of further unrest, and additional economic sanctions that will only deepen the suffering of ordinary Iranians.

Principles-Based Approach to Complex Crises

A principled approach to this crisis would begin with recognizing the fundamental rights of the Iranian people to peaceful protest and economic dignity. External actors should refrain from interventions that escalate violence or transform domestic grievances into international conflicts. The international community should focus on humanitarian assistance and diplomatic engagement rather than military threats and economic warfare.

The United States, in particular, must reconsider its approach of maximum pressure and constant threats. While the Iranian regime’s behavior deserves criticism and opposition, policies that primarily harm ordinary citizens while strengthening the regime’s narrative of defending against foreign aggression are counterproductive. A more nuanced approach that distinguishes between the Iranian people and their government, that offers humanitarian relief while maintaining pressure on human rights abuses, would better serve both American values and strategic interests.

Israel’s open encouragement of protests represents another dangerous escalation that blurs the line between supporting human rights and engaging in regime change operations. While the desire to counter a hostile regime is understandable, methods that risk Israeli lives, Iranian lives, and regional stability require extremely careful consideration and democratic accountability.

The Path Forward: De-escalation and Human-Centered Solutions

The immediate priority must be de-escalation on all sides. This includes cessation of inflammatory rhetoric, withdrawal of military threats, and creation of humanitarian corridors to address the economic suffering that sparked the protests. The international community should work through neutral intermediaries to facilitate dialogue between protest representatives and government officials, focusing on economic reforms and political accommodations that address legitimate grievances.

Long-term solutions require addressing the underlying economic problems through diplomatic engagement that eventually leads to sanctions relief in exchange for verifiable changes in Iranian behavior. The failed maximum pressure approach has demonstrated that crippling economic sanctions primarily harm ordinary people while strengthening hardliner positions within the regime. A new approach that offers graduated relief in exchange for concrete steps toward moderation offers a more promising path.

Most importantly, the Iranian people must be centered in any solution. Their economic suffering, their political aspirations, and their right to peaceful protest must be protected from exploitation by all parties—whether domestic security forces crushing dissent or external powers seeking geopolitical advantage. The path forward must prioritize human dignity over geopolitical scoring, economic relief over military posturing, and diplomatic engagement over threats of violence.

This crisis represents a critical test for the international community’s ability to respond to complex emergencies with wisdom, principle, and compassion. The choices made in the coming days and weeks will determine whether Iran’s economic protests lead to broader regional conflict or become a catalyst for positive change through peaceful means. The world must choose wisdom over recklessness, humanity over geopolitics, and peace over conflict.