Iran unrest deepens amid economic crisis and Trump’s intervention threat
On December 31, 2025, a large anti-Israeli banner was erected in Tehran’s Palestine Square, featuring the image of a Palestinian fighter and the slogan “Voice of Eternal Resistance” in Persian and Hebrew.
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Widespread anti-government protests have plagued Iran for more than a week, forcing Iranian leaders to consider options to quell the unrest, with US President Donald Trump threatening intervention.
The unrest, which started and spread in the Tehran market on December 28, was fueled by the disappointment created by the long-standing economic crisis in Iran and has become increasingly violent in recent days. At least 29 people were killed and more than 1,200 were arrested. Human Rights Activists News Agency on Tuesday. The US-registered nonprofit relies on its network of activists in Iran for reporting.
Anti-regime demonstrations have spread to more than 250 locations in 27 of Iran’s 31 provinces, according to the group.
Tehran sought to quell the protests, as Iran’s supreme leader, Ayatollah Ali Khamenei, said on Saturday. “Rebels must be put in their place” This statement is widely interpreted as a signal for security forces to end the demonstrations.
Iranian President Masoud Pezeshkian struck a more conciliatory tone, calling for dialogue and promising economic reforms to appease demonstrators demanding political change, the fight against corruption and relief from rising living costs.
The promises included providing a monthly stipend of 10 million riyals ($7) per person as a non-cashable electronic credit to be used at selected markets. According to ReutersCiting the semi-official Tasnim news agency. Officials also promised Overhauling the country’s foreign exchange subsidies system move away from subsidizing importers and provide direct support to consumers has been criticized for a long time as well as being vulnerable to corruption.
Still, popular unrest continues, expanding from economic woes to greater frustrations with the regime, with some protesters chanting slogans. “Death to the dictator” A reference to Khamenei, who has ultimate authority over the state.
TEHRAN, IRAN – JANUARY 3: (—-EDITORIAL USE ONLY – MANDATORY CREDIT – ‘IRAN LEADER PRESS BUREAU / STATEMENT’ – NO MARKETING NO ADVERTISING CAMPAIGNS – DISTRIBUTED AS A SERVICE TO CUSTOMERS —-) Iran’s Supreme Leader Ali Khamenei speaks in Tehran, Iran, on January 03, 2026. (Photo: IRANIAN LEADER PRESS OFFICE/Anatolia, via Getty Images)
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Increasing risks of US intervention
The unrest has revived concerns about possible American intervention.
Inside A social media post last Friday said, Trump vowed that the United States would defend protesters if they were attacked and warned that Washington was “locked in, ready and ready to go” if Iranian authorities used violence against peaceful demonstrations.
The warning took on added weight after US forces captured Venezuelan President Nicolás Maduro over the weekend and brought him to New York for trial this week.
On Sunday, Trump said: Reporters aboard Air Force One He said Iranian authorities would be “hit very hard” if more protesters died. “We’re watching this very closely. If they start killing people like they’ve done in the past, I think they’re going to get hit very hard by the United States,” Trump said.
Analysts at research firm BMI, a unit of Fitch Solutions, said that the Iranian administration may now be more cautious about using force against protesters, noting that Trump bombed Iran’s nuclear facilities in June last year to support Israeli attacks.
“We see an increased risk of the United States taking action against Iran in early 2026 if protests escalate,” analysts said.
Reuters quoted an unnamed Iranian official He said there were concerns that Iran could be “the next victim of Trump’s aggressive foreign policy.”
Iran’s economy has been struggling since Trump withdrew the United States from the Iran nuclear deal in 2018, which limited Iran’s nuclear program in exchange for sanctions relief. The country is also reeling from the tightening of sanctions following a 12-day war with Israel, its long-time regional rival backed by the United States.
The rial, Iran’s official currency, collapsed in December and fell to a record low of around 1.45 million rials per US dollar by the end of 2025. inflation reached 42.5 percent.
David Roche, experienced investor and strategist at Quantum Strategy, told CNBC on Monday that Iran’s long-running economic crisis could pose greater risks to the regime than the possibility of US intervention.
“[Iran] “It will not fall due to US intervention,” Roach said, noting geographical and political restrictions. Instead, he said, persistent protests combined with worsening domestic economic conditions pose a greater risk.
He added that the regime will likely outlast this round of protests, but “they do not have any tools to find solutions to Iran’s economic problems.”
— CNBC’s Amitoj Singh contributed to this report.
