Iran's economy has been crippled by the US naval blockade and an expanded sanctions campaign, according to a new Treasury Department report obtained by Axios, with inflation at 90% and the rial at a record low.

The report lands as President Donald Trump weighs whether to resume major combat against Iran after Tuesday's midterm elections. Iran's Statistical Center put the September inflation figure at 89.8%, a record, up from roughly 35% in early 2025. The rial has lost roughly a quarter of its value since August and hit a record low of 2.687 million to the dollar on the unofficial market in October, down from about 2.02 million when the campaign began.

Operation Economic Outcast

Treasury Secretary Scott Bessent launched the campaign, dubbed Operation Economic Outcast, on 24 August, expanding secondary sanctions on foreign companies and banks that trade with Tehran. Iran has not loaded crude onto a tanker since 25 August, the report says, and Treasury sanctioned 17 more vessels on 8 October.

Overland workarounds are also stalling, the report says, with thousands of trucks stranded at the Turkish border, some waiting up to 20 days. Several Gulf and neighbouring states have barred Iranian airlines or cancelled flights, and Iranian banks face new limits in Turkey, Lebanon and the UAE.

Pressure, but not collapse

The report does not claim Iran's government is near collapse. Instead, it argues that Treasury has sharply limited Tehran's ability to raise money. Bessent is among the aides urging Trump to give the pressure campaign more time. Whether economic pressure produces a deal, or a return to major combat after the midterms, remains the central unanswered question.