The Iranian government vowed to continue confronting US sanctions and what it described as "American-Israeli conspiracies," saying it would rely on both diplomacy and defence capabilities to protect the country's interests. The statement came as economic pressures mounted on Tehran six months into the war.
In the latest pressure, the US Treasury Department said it moved to prevent Bank Misr branches in the UAE from conducting dollar transactions due to dealings with Iran. The bank said on Saturday it was reviewing the American notice and affirmed that its branch would continue providing banking services.
The Iranian government said in a statement carried by state media on Saturday that diplomacy and defence are "complementary and coordinated tools" that cannot be separated to protect national interests, security, and Iranian territorial integrity. The government said it would pursue both diplomatic and defence tracks in parallel while focusing domestically on reducing inflation, creating jobs, and supporting local production.
Iran faces mounting economic pressure from the war and American sanctions. Annual inflation reached 66 percent last month, while President Masoud Pezeshkian said the country's foreign trade volume declined by roughly 35 percent due to sanctions and an American naval blockade of Iranian ports. The Revolutionary Guards' Navy rejected US assertions that the Strait of Hormuz is open to navigation, saying American statements aim to influence oil prices and cover up what it called Washington "failures." The Guards said restrictions on navigation would continue until American military operations against Iran end and related commitments are fulfilled.
Initial shipping data indicated navigation remained far below normal levels, with only seven commercial vessels transiting the strait on Thursday compared to 17 the previous day and an average of 15 daily over the preceding ten days. The Strait of Hormuz is one of the world's most important energy shipping lanes, carrying roughly one-fifth of global oil and natural gas supplies before the war began. Control of the strait and freedom of navigation through it has become a major point of contention between Washington and Tehran, with regional countries leading mediation efforts to revive understandings between the sides.
Pezeshkian told state media his country sold approximately 90 million barrels of oil during a temporary understanding reached with the United States in June. Washington allowed Iranian oil sales during that period before the agreement collapsed amid renewed disagreements, particularly over the Strait of Hormuz. Qatar and Pakistan had helped broker the understanding, which led to a brief ceasefire before it faltered. Qatar is currently attempting to reactivate the diplomatic track, with Prime Minister Mohammed bin Abdulrahman Al Thani visiting Tehran on Thursday to meet Iranian officials and discuss ways to return to freedom of navigation in the strait as it existed before the war. Iranian Foreign Minister Abbas Araghchi said the meeting with the Qatari official led to what he called "constructive talks."
Pezeshkian said his country was ready for "cooperation and understanding" with regional countries, including Saudi Arabia and the UAE. The Iranian president's remarks came as Tehran sought to limit the impact of American economic pressures amid Washington's threats to impose secondary sanctions on countries and institutions that continue commercial and financial dealings with Iran.
Bank Misr said on Saturday it was reviewing a notice from the US Treasury Department concerning restrictions on dollar-denominated banking correspondent services provided by American financial institutions to its UAE branch. The bank affirmed that its UAE branch continues to provide banking services to its clients in accordance with applicable rules and procedures. The US Treasury Department announced on Friday it took measures to prevent Bank Misr branches in the UAE from conducting dollar transactions due to their dealings with Iran.
Iran's Foreign Ministry on Friday condemned the new American sanctions, describing them as "economic terrorism," and called on other countries not to participate in implementing them. The Trump administration says its economic pressure campaign aims to isolate Iran financially and force it to change its policies, while Tehran says the sanctions target ordinary Iranian citizens.
In a separate security development, Iranian media said security forces clashed with armed elements from the Sunni group "Army of Justice" in the city of Saravan in Sistan and Baluchestan Province in the country's southeast. Iran's student news agency ISNA reported Friday that a police spokesman said the operation resulted in the death of one group member and the arrest of six others. The agency said police, Revolutionary Guards, and intelligence agencies participated in the operation, noting the seizure of large quantities of weapons and ammunition, including dozens of Kalashnikov rifles, hand grenades, RPG-7 launchers, approximately 20 kilograms of C-4 explosives, and Starlink satellite communication devices.
Authorities said the detainees were "suspected of involvement in killing security force members during March and April, as well as in the death of a Revolutionary Guard member last month." Sistan and Baluchestan Province lies on the border with Pakistan and Afghanistan and is home to a large Baluch minority with a Sunni majority in Iran's predominantly Shia population. The province is among the country's poorest regions. It has experienced years of unrest and clashes between security forces on one side and armed militants and drug smugglers on the other. The "Army of Justice," which operates in the region, repeatedly carries out attacks on Iranian security forces. Tehran designates it a "terrorist" group.
