The rise in oil prices, uncontrollable inflation, kerosene shortage… Over two months after the start of the conflict, the closure of the Strait of Hormuz weighs more than ever on Western markets. A question that remains largely unanswered, however, is the impact of this blockade on the Iranian stock market and economy?
The confrontation between Iran and the United States may have officially started on February 28, 2026, but the standoff between the two countries is actually much older. Tehran has been dealing with American sanctions since 2010, which includes exclusion from the banking system, oil embargo, financial restrictions, asset freezes… The situation improved significantly by 2016 and 2017 following an agreement with the Obama administration, but that was torn apart by Trump in 2018…
While some sectors of the economy have been severely impacted by these measures – a large part of the banking system is, for example, excluded from the SWIFT system – “the sanctions have also helped strengthen the resilience of certain parts of the economy,” notes Katayoun Maleki, a political science doctoral student and head of the “Industry, Mines, and Commerce” desk at Eghtesad Online/EcoIran, one of Iran’s most consulted economic news sites.
“The Tehran Stock Exchange, a playground for local traders” The Iranian financial market is opaque to foreigners, and the Tehran Stock Exchange is primarily for local traders. Indeed, “access to the market is impossible, and access to information is very complicated,” points out Thierry Coville, a researcher at IRIS (Institute of International and Strategic Relations) and an expert on the Iranian economy.
The TEDPIX, Tehran’s flagship index, includes between 600 and 700 listed companies, with a strong presence of petrochemical companies (Persian Gulf Petrochemical Industries, Tamin Petroleum & Petrochemical Investment), as well as banks (Bank Mellat, Bank Tejarat, and Bank Saderat Iran…) and industrial groups like Mobarakeh Steel Company and National Iranian Copper Industries (NICICO). It also features car manufacturers such as Iran Khodro Company and Saipa Group, and telecommunication companies like TCO and MAPNA Group.
“The total capitalization of the Tehran Stock Exchange is very volatile due to high inflation, exchange rate fluctuations, and variations in valuations in rials against the dollar,” highlights Katayoun Maleki, mentioning a fluctuating valuation, ranging between $100 billion and $500 billion, approximately 3 to 15% of the total valuation of the CAC 40. Since the start of the war, however, data on TEDPIX is no longer available as the capital market has simply closed.
“The reopening of the exchange requires the approval of the Supreme Council of the Stock Exchange. A meeting was held on May 2, during which it was decided that a final decision on the reopening would be made soon,” adds Katayoun Maleki.
“A disconnected market from international flows” According to Thierry Coville, access to Tehran’s stock market data is not essential to gauge the Iranian economy. “In reality, in the case of Iran, the link between the stock market and the macroeconomic situation is almost non-existent,” notes the specialist. For him, price movements are highly speculative while the rest of the economy grapples with international sanctions. “We can even talk about a repressed financial system: you have real negative interest rates. And even though there are private banks, in reality, everything is very controlled by the state.”
The regime of the clerics does not hide its interest in the evolution of international financial markets. In April, Mohammad-Bagher Ghalibaf, the speaker of the Iranian parliament, stated that the real front line is the yield curve of American bonds. And, as he called for the markets to sell American bonds, he suggested that the global financial system, largely centered on the United States, is not as strong as it seems.
“Oil, the regime’s ultimate lifeline?” While Ayatollah Ali Khamenei was eliminated on the first day of the conflict, the regime has shown unexpected resilience. Iran has a strong asset in its underground: according to Frederic Lorec, an oil specialist at AlphaValue, the Iranian subsurface is estimated to contain about 209 billion barrels of oil, making it the third-largest global reserve. The daily production was also estimated to be between 4.5 and 4.7 million barrels per day at the beginning of the year, placing the country among the top global producers.
These reserves are a significant financial asset for the Islamic Republic… provided they can circumvent sanctions. Shadow trading via rail, transshipments offshore… “Iran has managed to develop a parallel export system, shipping about 1.8 to 2.3 million barrels per day, mainly to China. These barrels are already integrated into Asian balances and provide a hidden source of supply to the market,” analyzes Frederic Lorec.
For years, this discreet trade between Tehran and Beijing was more or less tolerated by the Biden administration, according to Thierry Coville. And even with a price of 7 to 12 USD per barrel, these exports help support the Iranian economy. However, they are not without consequences: Beijing settles the deliveries in yuan, a non-convertible and unusable currency, putting pressure on the country’s reserves and contributing to a decline in the rial.
“Rapidly increasing inflation” This scenario contributes to skyrocketing inflation: the IMF estimates it to be over 50% in 2025 and projected to be nearly 70% for 2026.
Food prices have sharply increased in January 2026 due to a significant depreciation of the Iranian rial, which has pushed up food prices across the country, as noted by a report from the FAO, the United Nations Food and Agriculture Organization.
Grace, a young Iranian living in Tehran, shared, “Prices are rising dramatically, almost every two weeks. Food, household products, cooking oil… nothing is immune to the consequences of this war.” According to her, many people were struggling to meet their basic needs before the war. “Obviously, the situation is even worse now. And in addition to the effects of this inflation, there are now blockades and the destruction of factories,” she adds.
Israelis claimed to have destroyed about 70% of Iran’s steel industry. In a sign of the regime’s fragility, Iranian customs authorities issued a directive at the end of April banning the export of several steel products.
“It’s not surprising,” comments Thierry Coville. “This industry is at the core of the economy, with subcontractors and customers like the automotive industry, appliances, etc. So the regime has a huge task in maintaining production within Iran. Otherwise, many companies will stop operating.”
According to several estimates, the war has already put between 1 and 2 million Iranians out of work. Grace is one of them. The young woman worked freelance on the internet before the war. “The number one priority is access to the internet, as fast and as cheap as possible, access that cannot be hacked, blocked, or filtered,” she explains. “The use of tunneling configurations has become the only option, often costly and easily detected and cut off.”
