Since late December 2025, there have been widespread protests throughout Iran, which were first triggered by the country’s economic woes, including skyrocketing inflation and a catastrophic currency crash.
Protests have more recently evolved into larger anti-regime demonstrations.
Media reports more than 500 fatalities in protests and more than 10k arrests.
The government has severely restricted independent reporting and real-time updates by enforcing a nationwide internet blackout and disrupting phone lines.
Tehran has also threatened to respond against American and Israeli interests if the United States engages in military action.
Enter the American madman.
Trump has repeatedly said that Washington was ready to come to the “rescue” of Iranians if the authorities there kill protesters.
“Iran is looking at FREEDOM, perhaps like never before,” the US president said on Saturday on social media. “The USA stands ready to help!!!”
Iran’s speaker of parliament Mohammad Baqer Ghalibaf, on Sunday warned the US against “a miscalculation”.
“Let us be clear: in the case of an attack on Iran, the occupied territories [Israel] as well as all US bases and ships will be our legitimate target,” he told parliament.
Authorities are killing the protestors. So are we going to see airstrikes?
Iran is a major ally of both Russia and China. Iran signed a comprehensive strategic ties agreement with Russia a year ago, and supplies large quantities of drones and shells for its war in Ukraine.
However, it does not include mutual defense triggers.
China also has a 25-year strategic agreement with Iran, though it primarily concerns oil. China accounts for about 85% of Iranian oil exports, roughly 2b/d.
In short, any move by Washington to truncate the Iranian regime will be met with fierce resistance by both Russia and China, though it is likely to remain clandestine and proxy in nature.
The shock to oil prices would be meaningful but manageable from an economic standpoint.
For bloated asset markets, I think it will be less smooth.
