Iran Unrest Grows as Rial Crashes and Water Runs Dry

Iran is facing a renewed wave of nationwide protests that began in late December and has continued into January, as economic breakdown and basic service failures push public anger beyond isolated demonstrations into a broader challenge to the state.

What started with unrest among traders and shopkeepers has spread across multiple cities, driven by a collapsing currency, rising prices, and growing shortages of water and electricity.

The immediate trigger for the newest wave of protests has been the sharp fall in the Iranian currency, the rial, which has impoverished Iranians and accelerated inflation (at the beginning of January an American dollar would have cost you about 40 000 Iranian rials, it now costs you nearly one million). As prices jumped, shops closed in protest and sporadic strikes followed, pulling students and workers into the streets. Years of sanctions, weak growth, and corruption have left households with little buffer, turning an economic shock into sustained unrest.

Iranian President Masoud Pezeshkian has publicly urged security forces to avoid overt violence, but those statements sit alongside signals that the regime’s priority is control, not reform. His deputy, Mohammad Jafar Ghaempanah, said the president had “ordered that no security measures be taken against the demonstrators”, while adding, “We must distinguish protesters from rioters.”

In practice, that distinction is defined by the state, allowing repression to continue under a different label.

In Washington, the response has been blunt. United States President Donald Trump posted on Truth Social, a social media platform, "If Iran shoots and violently kills peaceful protesters, which is their custom, the United States of America will come to their rescue. We are locked and loaded and ready to go." Separately, the US State Department’s Persian language account posted on X, "Hospitals are not battlefields," after reports of security operations near medical facilities.

The unrest is colliding with a worsening water crisis. Energy Minister Abbas Aliabadi said the government “may be forced to reduce water pressure to almost zero at night”, while Pezeshkian himself warned, “If it still doesn’t rain, we will have no water and will have to evacuate the [capital] city [Tehran].”