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Iran's Economic Collapse Triggers Largest Uprising Since 1979

Iran's Economic Collapse Triggers Largest Uprising Since 1979

Bazaar merchants who once backed the Islamic Republic now demand its end, while regime signals openness to U.S. talks

Today: Death Toll Passes 500; Regime Signals Openness to Talks

Overview

The Iranian rial has lost 80% of its value in a year. Food prices are up 72%. On December 28, the bazaaris—Tehran's merchant class, historical kingmakers who helped bring the clerics to power in 1979—closed their shops and marched into the streets. Within two weeks, protests had spread to all 31 provinces, with millions demanding the Islamic Republic's end. Security forces have killed at least 572 people, possibly thousands more obscured by a near-total internet blackout.

For the first time, chants have shifted from reform to regime change. Exiled Crown Prince Reza Pahlavi has called on Iranians to 'seize city centers' and urged security forces to defect. Meanwhile, as death tolls mount and Trump threatens military action, Iran's Foreign Minister quietly reached out to Washington—signaling the regime may be seeking a diplomatic lifeline even as it fires on its own citizens.

Key Indicators

572+
Confirmed Deaths
Human rights groups report over 572 confirmed deaths, with some estimates suggesting 2,000-6,000 killed during the internet blackout.
10,600+
Detained
More than 10,600 protesters arrested across Iran since December 28.
1.5M:$1
Rial Exchange Rate
The Iranian rial fell to 1.5 million per dollar—down from 32,000 at the time of the 2015 nuclear deal.
72%
Food Inflation
Year-over-year food price increases have made basic goods unaffordable for millions.
31/31
Provinces Affected
Protests reported in all 31 Iranian provinces and 185+ cities, the widest geographic spread since 1979.

People Involved

Ayatollah Ali Khamenei
Ayatollah Ali Khamenei
Supreme Leader of Iran (Ordered security forces to suppress protests; reportedly has escape plan to Moscow)
Masoud Pezeshkian
Masoud Pezeshkian
President of Iran (Limited authority; proposed budget that sparked protests)
Reza Pahlavi
Reza Pahlavi
Exiled Crown Prince of Iran (Calling for coordinated protests and security force defections from Maryland)
Abbas Araghchi
Abbas Araghchi
Foreign Minister of Iran (In direct contact with U.S. envoy amid crisis)
Donald Trump
Donald Trump
President of the United States (Threatening military action while exploring diplomacy)
Steve Witkoff
Steve Witkoff
U.S. Special Envoy to the Middle East (In active communication with Iranian Foreign Minister)

Organizations Involved

IS
Islamic Revolutionary Guard Corps (IRGC)
Military/Security Force
Status: Leading crackdown on protests; some reports of defections

The IRGC is Iran's elite military force, separate from the regular army, tasked with protecting the Islamic Revolution.

HU
Human Rights Activists News Agency (HRANA)
Human Rights Organization
Status: Primary source tracking protest casualties

U.S.-based organization documenting human rights violations in Iran.

Timeline

  1. Death Toll Passes 500; Regime Signals Openness to Talks

    Current

    Confirmed deaths reach 572 with estimates of thousands more. Araghchi states Iran is 'ready for war but also for dialogue' as regime faces unprecedented dual pressure.

  2. Trump Announces Iran Wants to Negotiate

    Diplomatic

    Trump says Iranian leaders called seeking talks. Announces 25% tariff on countries trading with Iran. VP Vance urges diplomacy before military action.

  3. Iran's Foreign Minister Contacts U.S. Envoy

    Diplomatic

    Abbas Araghchi reaches out to Steve Witkoff amid Trump's military threats, first indication direct U.S.-Iran channel remains open.

  4. Millions in Streets Across All 31 Provinces

    Protest

    Protests reported in 185+ cities across all provinces. Army pledges to defend 'national interests.' Some IRGC defections reported.

  5. Iran Imposes Nationwide Internet Blackout

    Crackdown

    Authorities impose near-total shutdown of internet and phone access—the worst in Iran's history—obscuring the scale of the crackdown.

  6. Crown Prince Pahlavi Calls for Coordinated Protests

    Opposition

    Exiled Crown Prince issues video calling on Iranians to chant together at 8 PM Thursday and Friday, directly challenging the regime.

  7. Rial Hits Record Low

    Economic

    Iranian rial falls to 1.5 million per dollar, breaking previous record. Government's attempted intervention on January 3 failed.

  8. Khamenei Orders Crackdown; 11 Killed in Single Day

    Crackdown

    Supreme Leader declares 'rioters should be put in their place.' Security forces kill at least 11 protesters. IRGC announces 'tolerance period' is over.

  9. Protests Spread to 17 Provinces

    Protest

    Government places country on leave until January 4, citing weather and energy concerns. Protests now span 17 of 31 provinces.

  10. Bazaar Protests Erupt in Tehran

    Protest

    Shopkeepers in Tehran's Grand Bazaar close shops and march into streets, protesting economic collapse. The rial hits 1.45 million to the dollar.

  11. UN Reimposed Sanctions via Snapback

    International

    United Nations re-imposes sanctions on Iran over its nuclear program, further pressuring the economy.

  12. Ceasefire Ends 12-Day War

    Diplomatic

    Trump announces ceasefire. Iran's nuclear program set back years, military infrastructure devastated, rial begins accelerating collapse.

  13. Israel-Iran 12-Day War Begins

    Military

    Israel launches strikes on Iranian nuclear facilities and military bases. Over 12 days, Israel conducts 360 attacks across 27 provinces. The U.S. bombs three nuclear sites on June 22.

  14. Assad Regime Falls in Syria

    Regional

    Rebels overthrow Iran's key ally Bashar al-Assad, severing Tehran's land corridor to Hezbollah and costing Iran an estimated $30-50 billion in investment.

Scenarios

1

Regime Crushes Protests, Survives Weakened

Discussed by: Foreign Policy, Stimson Center, Al Jazeera analysts

The most likely near-term outcome based on historical precedent. The regime uses massive force during the internet blackout, kills thousands, arrests tens of thousands, and gradually restores order over weeks or months. The Islamic Republic survives but emerges economically devastated, internationally isolated, and dependent on Russia and China. Khamenei purges suspected disloyal IRGC members. The opposition remains fragmented without unified leadership. This mirrors the 2022 Mahsa Amini protests, which the regime suppressed despite 500+ deaths and 22,000 detentions.

2

Security Forces Fracture, Triggering Regime Collapse

Discussed by: The Times (UK), Iran International, Middle East Institute

Reports of IRGC members 'balking' at orders and the organization acknowledging 'possible acts of abandonment' suggest cracks in the security apparatus. If defections cascade—as happened in Romania 1989—the regime could collapse rapidly. Intelligence reports indicate Khamenei has an escape plan to Moscow. However, the IRGC's leadership has strong incentives to prevent collapse (they would face prosecution), and past protests saw security forces remain cohesive. This scenario becomes more likely if the economic situation makes paying security forces impossible.

3

U.S. Strikes Iran, Accelerating Instability

Discussed by: Axios, New York Times, ABC News military analysts

Trump has indicated military options remain 'on the table' and has leaned toward strikes to punish the regime. Targets could include IRGC facilities, remaining nuclear infrastructure, or security force command centers. Strikes could weaken the regime's capacity for repression but also risk rallying nationalist sentiment behind the government. The June 2025 precedent shows the U.S. is willing to strike Iran directly. VP Vance's faction is urging diplomacy first, making immediate strikes uncertain.

4

Diplomatic Off-Ramp: Sanctions Relief for Reforms

Discussed by: Axios, PBS, European diplomatic sources

Iran's outreach to Washington suggests the regime may be seeking a face-saving exit. A deal could involve: Iran commits to reducing enrichment capacity, releases detained protesters, and permits monitored reforms; the U.S. eases some sanctions and restrains Israel. This would require Khamenei to accept significant concessions while facing domestic fury. Past U.S.-Iran diplomatic efforts (2015 JCPOA, April 2025 talks) have collapsed. The Trump administration appears skeptical but has kept channels open through Witkoff.

Historical Context

Romanian Revolution (1989)

December 1989

What Happened

Protests against Nicolae Ceaușescu's dictatorship began in Timișoara on December 16 after security forces tried to evict a Hungarian pastor. When Ceaușescu ordered troops to fire on demonstrators, protests spread nationwide. On December 21, a staged rally in Bucharest turned against him as crowds chanted 'Timișoara!' The army defected the next day. Ceaușescu and his wife fled by helicopter, were captured, given a drumhead trial, and executed on Christmas Day.

Outcome

Short Term

Romania's Communist government collapsed in 10 days. Over 1,100 people died. It was the only violent overthrow of a Warsaw Pact regime in 1989.

Long Term

Romania transitioned to democracy, though former Communist officials initially dominated the new government. The revolution showed how quickly authoritarian regimes can collapse when security forces defect.

Why It's Relevant Today

Reports of IRGC defections and Khamenei's alleged Moscow escape plan echo Ceaușescu's final days. The key variable is whether Iranian security forces will fracture as Romanian forces did.

Mahsa Amini Protests (2022-2023)

September 2022 – Spring 2023

What Happened

Mahsa Amini, 22, died in custody after Iran's morality police arrested her for wearing her hijab 'improperly.' Protests under the slogan 'Woman, Life, Freedom' erupted nationwide, with demonstrators openly calling for Khamenei's removal. Security forces killed over 500 people and detained 22,000. The regime executed at least 10 protesters after show trials.

Outcome

Short Term

The government crushed the protests through sustained repression. By spring 2023, demonstrations had largely subsided.

Long Term

The political leadership remained unchanged. Morality police resumed patrols in July 2023. A UN probe found Iran responsible for Amini's death through 'physical violence' and concluded Tehran committed 'crimes against humanity.'

Why It's Relevant Today

The 2026 protests are more geographically widespread (all 31 provinces), started with regime-aligned bazaaris rather than students, and focus on regime change rather than social reform—potentially more threatening to the government.

1979 Iranian Revolution

1978-1979

What Happened

Protests against Shah Mohammad Reza Pahlavi united secularists, Islamists, workers, and merchants. The bazaaris—traditional allies of the Shia clergy—played a crucial role by joining strikes and funding opposition. Despite security forces killing thousands, as many as 9 million Iranians marched in cities nationwide. The Shah fled on January 16, 1979. Ayatollah Khomeini returned from exile two weeks later.

Outcome

Short Term

The monarchy fell and was replaced by an Islamic Republic. The Revolutionary Guards were established to protect the new order.

Long Term

Iran became a theocracy under clerical rule. The revolution demonstrated that the bazaari class can be decisive—their defection from the Shah helped doom his regime.

Why It's Relevant Today

The 2026 protests began with bazaaris abandoning the Islamic Republic, just as they abandoned the Shah in 1979. If the merchant class that helped install the clerics now turns against them, it signals a fundamental rupture in the regime's base.

15 Sources:
+9
NBC News Amnesty International Wikipedia Axios CNN Iran Human Rights Human Rights Watch Al Jazeera Foreign Policy Project Syndicate The Jerusalem Post The Soufan Center Britannica United States Institute of Peace Axios