Beneath the surface: An economic drama is unfolding in Iran - one that Israel must exploit

Ahead of Prime Minister Netanyahu's diplomatic visit to Washington, the defense establishment and decision-makers in Israel stand at a critical crossroads. The strategic discussion with the American administration naturally focuses on familiar issues: curbing the Iranian nuclear program, preventing the re-empowerment of the Iranian proxy network, and finding a response to the threat from the Iranian missile program.

However, while the Israeli-American gaze is fixed on the battlefields, the smuggling routes, and the nuclear facilities in Natanz, Fordo, and Parchin, one must not ignore the most critical component that could tip the scales: the cumulative economic effect and the deep internal fragility within Iran itself.

The reality in Tehran is far from stable. Under the shell of the regime's regional and global threats, the Iranian economy continues to bleed. The damage from the war and the naval blockade, the sanctions, alongside structural corruption and the massive investment of state resources in financing regional terrorism (whether in Lebanon, Yemen, or in advanced weapons systems from Russia and China), are pushing the regime to the wall. These consequences do not remain at the macro-economic level alone. They seep directly into the pocket of the simple Iranian citizen, who is losing their purchasing power and trust in the system every day.

The regime's most significant weak point is currently manifested in its intention to sharply increase fuel prices. This is a move it has tried to avoid for years due to its immense public sensitivity. Raising fuel prices will create a dizzying effect in Iran, as it will also be reflected in the price increases of transportation, basic goods, and services. Thereby, it is expected to exacerbate the pressure on the public in Iran.

For the government in Tehran, the issue of fuel subsidies is not just a budgetary question, but one of political life and death. The collective memory of the events of November 2019 — when a sudden and drastic increase in fuel prices led to a wave of protests throughout the country, which was brutally suppressed with the killing of hundreds of citizens — still hovers over the senior figures in the Iranian leadership.

The Iranian regime rightly fears that a similar step today, under conditions of extreme economic distress, rising unemployment, and memories of the massacre of thousands of protesters in the January 2026 protests, could reignite the fire in the streets. This could fuel a wave of popular protest that will take on broad dimensions and undermine the stability of the regime in a completely different way than any external pressure. Therefore, any Western strategy towards Tehran must take into account this internal boiling point.

The message that Israel must bring to Washington must be clear: applying increased economic pressure and tightening sanctions are not just a punitive measure, but a strategic lever of the first order. The deeper the economic distress becomes and forces the regime to take dangerous steps from its perspective, such as raising fuel prices, the greater the internal pressure will grow that will force the regime's leaders to turn their attention inward. The focus will become survival instead of exporting terrorism and regional subversion.

We must convince the American administration that the fight against Iran must include intercepting the regime's economic oxygen lines. A combination of active containment of its regional proxies and the deepening of the internal economic crisis in Tehran — with all its explosive social consequences — is the key to truly undermining it and the threat it poses to the entire Middle East.