When the Islamic Revolution toppled the Shah in 1979, 70 Iranian rials were worth one U.S. dollar. By early 2026, one dollar was worth an astronomical 1.4 million rials. It is clear that more and more people in Iran are suffering from this unprecedented devaluation of the national currency. After all, during the Shah's reign, it was worth almost 20,000 times more than it is today.
Even groups that supported the Shiite regime after the 1979 revolution have now taken to the streets. Influential merchants in Tehran's Grand Bazaar were the first to publicly protest in December 2025 against the economic crisis, galloping inflation of almost 50 percent and the drastic fall in the value of the rial.
"We are suffering. We cannot import goods because the United States has imposed sanctions and because only the Revolutionary Guard or its affiliated circles control the economy. And they only think about their own benefit," a merchant in the Grand Bazaar told Reuters, speaking on condition of anonymity.
"The entire energy infrastructure is in poor condition. Because of this, the Islamic Republic has difficulty respecting its social contract. Although Iran is rich in energy resources, power outages are a daily occurrence. "As energy subsidies take up an ever-increasing share of the state budget, gasoline prices have been raised, which is affecting families and businesses," Andreas Goldtau of the University of Erfurt told DW.
The Revolutionary Guard, the bigwigs and Iran's elite network
Iran's economic structure is inextricably linked to the political elite of the Islamic Republic, especially the Revolutionary Guard, which controls large areas of the economy. Added to this is a network of religious foundations, the so-called "bigwigs". They set the tone for infrastructure projects, schools and the pharmaceutical industry.
The Guards profit from every passenger, every container, every possible export or import transaction. Whether it's oil, the arms industry or specialized medical clinics – Almost nothing happens in Iran without the Revolutionary Guard. The largest construction and industrial concern in Iran, called "The Seal of the Prophet" (similar to the exhibit displayed in the Topkapi Palace in Istanbul), is also controlled by the Revolutionary Guard. It also transports sanctioned oil to China or imports alcohol into Iran, which is banned in the country, and in this sense plays the role of the largest smuggling organization in the country.
The Revolutionary Guards own Western-sanctioned airlines - such as Mahan Air - as well as the lion's share of the largest telecommunications concern - TCI. And in the country's second largest telecommunications company, MTN Irancell, in addition to the military, close associates of the supreme religious leader Ali Khamenei also participate.
"Your children live in the West, and ours lie in cemeteries or in prison" - this is how Gohar Eshghi, mother of the tortured to death Iranian blogger Sattar Beheshti, criticizes the elites. Apparently their anti-Western rhetoric does not apply to their own children, she commented in a video.
But how great is the influence of the guards? This is extremely difficult to establish - since the participations in companies and the corporate networks of the Revolutionary Guard are completely opaque, and there is almost no control or supervision.
"There is no doubt that since the late 2000s, the guards and the bigwigs have been the dominant economic factors in Iran. "However, it is difficult to estimate their exact share in the gross domestic product (GDP). They operate complex networks of holding companies, shell companies and so-called charitable foundations, which makes it very difficult to determine the extent of their activities," Kayhan Valadbayghi, a researcher at the International Institute for Social History (IISH) in Amsterdam, told DW in an interview.
He estimated that the economic network of military and religious-revolutionary foundations in the late 2010s accounted for about 50 percent of Iran's GDP. "Since then, these institutions have consolidated their influence on the economy, so I can confidently say that they currently control well over half of the country's economic power," the expert points out.
How insistent the Guards are on getting a share of all possible deals became clear when they blocked the IPO of technology startup Divar - the leading classifieds platform in Iran - even though they did not own a stake in the company.
"In Iran, whenever someone makes money, suddenly some organization, some quasi-state institution, appears to intervene", an entrepreneur from the circle of Divar's board of directors told the "Washington Post" on this occasion.
How much longer can this "zombie regime" last?
No one knows how long the protests of the population will last. But the number of dissatisfied people seems to be growing, as Iran expert Karim Sajjadpour from the Carnegie Endowment for International Peace emphasized in an interview with the American television MS Now. "The 1979 revolution took a year to reach its peak. The protests against the Shah began in January 1978 and lasted twelve months. "But the current protests only started about three weeks ago," he recalls.
Sajjadpour describes Iran's rulers as "a zombie regime with a dying ideology, a dying legitimacy, a dying economy and a dying 86-year-old dictator." But the regime is still able to wield deadly force. "And that's what keeps it in power," the observer adds.
But violence can only delay the "funeral of the regime," says Sajjadpour. "Iran is on the verge of transformation. Because whatever happens with these protests, the country is headed by an 86-year-old supreme leader who will soon step down. And I don't think anyone in society, not even any of the regime's representatives, believes that the status quo will persist," he says.
For Iran expert Kayhan Valadbayghi, the key to overthrowing the system lies primarily with the United States. However, he is not referring to a military intervention by Trump in Iran.
Even if the price of oil were to fall below $50 a barrel, this would not threaten the regime, which has experienced periods of low prices before and has learned to cope with fluctuations in the global oil market. What really matters is not the price of oil per se, but the continued export of oil despite US sanctions. "Low prices are painful, but bearable. "A complete halt to oil exports, however, would be much more damaging to Iran's state revenues and financial stability," the expert assured DW.
Author: Thomas Coleman