As anti-government demonstrations in Iran escalate following a 40% plunge in the rial since late December, U.S. officials are assessing a range of intervention strategies, including targeted sanctions, intelligence support to dissident groups, and potential cyber operations. The unrest, sparked by inflation exceeding 85% and widespread shortages, has spread to 37 major cities.
- Protests have spread to 37 Iranian cities since late December 2025
- The rial lost 40% of its value between December 15 and January 10, 2026
- Over 1,200 arrests and at least 87 fatalities reported by January 11
- U.S. is evaluating sanctions on $2.3 billion in Iranian assets and cyber operations against IRGC infrastructure
- Brent crude rose to $98.60 per barrel on January 11, up 7.2% in two days
- 14 fast-attack boats and three drone launch platforms deployed near Strait of Hormuz
Protests in Iran have expanded to 37 cities since late December, with demonstrators demanding economic reforms and regime change. Initial unrest over a 40% spike in bread prices and a 40% depreciation of the rial have evolved into nationwide calls for the government's resignation, according to independent monitoring groups. Security forces have responded with over 1,200 arrests and at least 87 reported fatalities as of January 11, 2026. The U.S. National Security Council convened emergency sessions on January 9 and 10, evaluating both military and non-military intervention pathways. Options under review include enhanced sanctions targeting Iran’s Central Bank and the Islamic Revolutionary Guard Corps (IRGC), expanding cyber operations against state-run communications infrastructure, and providing encrypted communications tools to opposition networks. Specific financial measures being discussed involve freezing $2.3 billion in Iranian assets held in foreign banks and imposing secondary sanctions on any entity that processes transactions with the Iranian Energy Ministry. Intelligence officials have also reported increased Iranian military activity near the Strait of Hormuz, including the deployment of 14 fast-attack boats and three new drone launch platforms, raising regional alert levels. These developments have prompted a sharp rise in oil volatility, with Brent crude reaching $98.60 per barrel on January 11, up 7.2% in two days. Financial markets reacted with caution, as the S&P 500 dropped 1.4% and the dollar strengthened 1.1% against the euro amid risk-off sentiment. Regional allies, including Israel and Saudi Arabia, have expressed concern over potential spillover effects.