Iran unrest escalates amid economic crisis and threat of Trump intervention

Widespread anti-government protests have rocked Iran for more than a week, forcing its leaders to weigh options to quell the unrest as U.S. President Donald Trump raised the threat of intervention.

The spreading unrest, which began in Tehran’s bazaar on December 28, is fueled by growing frustration over a long-running economic crisis in Iran and has become increasingly violent in recent days. At least 29 people were killed and more than 1,200 arrested, according to Human Rights Activists News Agency Tuesday. The U.S.-registered nonprofit relies on a network of activists in Iran for its reporting.

Anti-regime protests have spread to more than 250 locations in 27 of Iran’s 31 provinces, according to the group.

Tehran has sought to suppress the protests, with Iran’s Supreme Leader Ayatollah Ali Khamenei saying on Saturday that “We must put the rioters in their place” a remark widely interpreted as a signal for security forces to end the protests.

Iranian President Masoud Pezeshkian struck a more conciliatory tone, calling for dialogue and promising economic reforms in a bid to appease protesters who are demanding political change, action against corruption and a reduction in the cost of living.

The pledges included providing a monthly allowance of 10 million rials ($7) per person in the form of non-cashable electronic credit to be used at select grocery stores, according to Reutersciting the semi-official Tasnim news agency. Officials also committed to overhaul the country’s foreign exchange grant system provide direct support to consumers, by abandoning subsidies to importers, who have long criticized as vulnerable to corruption.

Yet public unrest continued, extending from economic grievances to broader frustration with the regime, with some protesters chanting “Death to the Dictator” a reference to Khamenei, who holds ultimate authority over the state.

In a publication on social networks last Friday, Trump vowed that the United States would defend protesters if they were attacked, warning that Washington was “locked, loaded and ready to go” if Iranian authorities used violence against peaceful protests.

The warning took on even more weight after the capture of American forces. Venezuelan President Nicolas Maduro over the weekend and I brought it to New York face a trial this week.

On Sunday, Trump said journalists aboard Air Force One that Iranian authorities would be “hit very hard” if more protesters died. “We are monitoring the situation very closely. If they start killing people like they have done in the past, I think they will be hit very hard by the United States,” Trump said.

Analysts at research firm BMI, a unit of Fitch Solutions, said Iranian leaders may now be more cautious about using force against protesters, noting that Trump bombed Iran’s nuclear facilities to support Israeli strikes in June last year.

“We see increased risks of US action against Iran in early 2026 if protests intensify,” the analysts said.

Reuters quoted an anonymous Iranian official saying there were fears that Iran could be “the next victim of Trump’s aggressive foreign policy.”

Iran’s economy has been struggling since Trump withdrew the United States from the Iran nuclear deal in 2018, a deal that limited Iran’s nuclear program in exchange for sanctions relief. The country has also been shaken by the strengthening of sanctions following a 12-day war with Israelits long-time US-backed regional rival

The rial, Iran’s official currency, collapsed in December, falling to a record low of around 1.45 million rials to the US dollar by the end of 2025, while inflation reached 42.5%.

Iran’s long-running economic crisis could pose greater risks to the regime than the prospect of U.S. intervention, David Roche, a veteran investor and strategist at Quantum Strategy, told CNBC on Monday.

“[Iran] “is not going to fall because of U.S. intervention,” Roach said, citing geographic and political constraints. Instead, he said sustained protests combined with deteriorating domestic economic conditions would pose a greater risk.

He added that the regime would likely survive this round of protests, but “it has no tools to solve Iran’s economic problems.”

— Amitoj Singh of CNBC contributed to this report.