Iran's bazaars, the merchant class that was the financial backbone of the 1979 Islamic Revolution, have turned against the religious establishment they helped bring to power, inciting unrest over the economy that has escalated into open anti-government protests.
Frustration among bazaars - from small traders to large wholesale entrepreneurs - has grown as their political and economic influence in Iran has waned over the decades, while the elite Revolutionary Guards have consolidated control over the economy, building extensive and tightly closed power networks, writes Reuters.
"We are fighting for survival. We cannot import goods because of US sanctions and because only the Guard or those associated with it control the economy. They only think about their own benefit," a trader at Tehran's Grand Bazaar, who asked not to be named, told Reuters.
The wave of protests that has swept the country, posing one of the most serious challenges to clerical leadership to date, erupted in late December in Tehran's Grand Bazaar, where hundreds of merchants denounced the sharp decline in the value of the rial.
The demonstrations quickly spread and took on a political character, questioning the legitimacy of the Islamic Republic. Demonstrators burned effigy of Supreme Leader Ayatollah Ali Khamenei and chanted "Death to the dictator," despite a heavy presence of security forces who responded with force.
Iran's rulers, while acknowledging economic hardship, blame their longtime enemies, the United States and Israel, for fomenting unrest. They appear determined to hold on to power at all costs, relying on a security apparatus honed over decades of suppressing ethnic uprisings, student movements, and protests over economic hardship and social freedoms.
The combination of international sanctions and the Revolutionary Guard's sprawling economic empire has limited the government's ability to alleviate the dire economic situation.
Tehran-based analyst Said Leylaz told the British agency that the authorities had lost control of the situation. "It is striking that the unrest started in the bazaar. For traders, the key issue is not inflation - but price instability, which makes it impossible for them to decide whether to buy or sell," he said.
Economic disparities between ordinary Iranians and the religious and security elite, along with economic mismanagement and state corruption, reported even by state media, have further fueled discontent at a time when inflation is pushing the prices of many products beyond the reach of most citizens.
The Iranian currency, the rial, lost almost half its value against the dollar during 2025, while official inflation reached 42,5 percent in December.
The Revolutionary Guards, created by the late founder of the Islamic Republic, Ayatollah Ruhollah Khomeini, first secured an economic foothold after the Iran-Iraq war in the 1980s, when religious rulers allowed them to invest in Iran's leading industries.
Their influence has grown exponentially over the decades, with the full support of Khamenei and thanks to the opportunities created by Western sanctions, which have effectively excluded Iran from the global financial and trade system.
The Revolutionary Guards today control huge segments of the economy - from oil, to transport and communications, to construction.
"The government wants to solve the problem, but in this system it has neither the means nor the power. The economy is not controlled by the government," a 62-year-old carpet seller in Tehran told Reuters.
All aspects of the sanctions-hit oil sector have come under increasing influence from the Guard - from the "shadow fleet" of tankers that secretly transport oil, to logistics and front companies that sell it, mainly to China.
“Nobody knows how much of the oil money that the Guard sells actually comes back into the country… they are too powerful for anyone to question them about it,” said a senior Iranian official, who asked to remain anonymous.
During his presidential term from 2013 to 2021, the pragmatist Hassan Rouhani repeatedly clashed with the Revolutionary Guards while his attempts to curb their business networks and assets were largely thwarted.
Although it ceded some economic power over time, the religious establishment relied on its loyal forces, the Guard and its associated paramilitary Basij, to violently suppress ethnic rebellions, student unrest, and protests over economic hardship, while preserving political order.
"In such sensitive circumstances, when the country is facing external threats, Khamenei cannot upset the Guard by limiting their economic influence. The religious establishment needs it to quell protests and confront external threats," said a source close to Rouhani.
The US-based human rights group HRANA has confirmed the deaths of 544 people, 496 protesters and 48 members of the security forces, and the arrest of 10.681 people since the protests began on December 28, which then spread across the country. Reuters was unable to independently verify the figures.
Authorities have not released a death toll, but officials say a large number of security forces were killed by "terrorists and rioters" linked to foreign enemies, including the United States and Israel.
Iran said yesterday that it is keeping communication channels open with the United States as President Donald Trump considers a response to the government's deadly crackdown on protesters.
Trump said on Sunday that the United States could meet with Iranian officials and was in contact with the Iranian opposition, while ramping up pressure on the leadership in Tehran, including threatening possible military action over deadly violence against protesters.
"The communication channel between our Foreign Minister Abbas Araghchi and the US special envoy (Steve Witkoff) is open and messages are exchanged whenever necessary," the Iranian Foreign Ministry said.
Aragchi said the situation was "under full control" after a sharp increase in protest-related violence over the weekend. He said Trump's warning had motivated terrorists to attack protesters and security forces in order to provoke foreign intervention.
Turkey said yesterday that any foreign intervention in neighboring Iran would lead to greater crises in that country and the region, and called for negotiations between the US and Iran to resolve existing problems.
NATO member Turkey does not want to see chaos in Iran, despite "certain problems within Iranian society and the government," said Omer Celik, a spokesman for the ruling Justice and Development Party (AKP).
“As Iranian President Masoud Pesekian said, these problems must be resolved through the internal dynamics of Iranian society and the national will of Iran,” Celik said at a press conference after a ruling party meeting. “We believe that foreign intervention would lead to even worse consequences, and that intervention provoked by Israel in particular would lead to even greater crises.”
Bonus video:
