The protests that rocked Iran in January 2026 were the product of a volatile previous year in which war fallout, sanctions, water shortages, power cuts and beyond converged into a single combustible economic crisis. Even if the current unrest is suppressed, economists paint a bleak picture as the government faces a critical threat to its survival — with few options left to fix the problems that made protests, powered by a broad coalition of Iranians, increasingly inevitable.

The demonstrations, which erupted Dec. 28 amid soaring prices and a spiraling currency, rapidly spread nationwide and escalated into direct challenges to the political system. While protests in Iran are hardly new, this one was sparked not by social or political flash points but by an economic free fall that directly hit a broad swath of society.

A deadly crackdown by Iranian security forces appears, for now, to have succeeded in getting demonstrators off the streets, per reports, easing fears of imminent US military intervention after days of threats from President Donald Trump. But this upheaval has exposed deep economic fragilities, which repression alone cannot resolve in a country of 90 million, leaving Iran vulnerable to renewed unrest and external pressure.

Looking ahead, challenges appear set to grow only further, which comes as Trump announced a new 25% tariff on countries trading with Iran. “Realistically, the government’s options are now extremely limited,” Mohammad Reza Farzanegan, professor of Middle East economics at Philipps-Universitat Marburg, told Al-Monitor. “Diplomatic negotiation to lift sanctions has become far more challenging following the military escalations of 2025.”