Iranian President Masoud Pezeshkian has openly acknowledged the severity of his country's economic crisis as U.S. pressure strangles Iranian trade while simultaneously safeguarding other nations' oil tankers transiting the Strait of Hormuz, the chokepoint through which roughly a fifth of the world's oil supply normally passes.

In recent weeks, Tehran has lost leverage over the critical energy chokepoint as shipping traffic recovers, particularly along a southern route hugging Oman's coast. At the same time, warnings about the state of Iran's economy from Pezeshkian and other relative moderates within the regime have grown increasingly pointed.

Speaking to state media in an interview on Friday, Pezeshkian struck a defiant tone in the face of mounting economic pressure, crediting Iran's resilience to national unity.

"We have many problems," Pezeshkian said, according to a Google translation. "There's inflation, economic issues, employment and many other problems, but the people are with us."

The numbers back him up. Inflation has soared above 80%, with prices of certain food staples up 100%. The International Monetary Fund said in April that Iran's economy will shrink 6.1% this year—the worst contraction in decades—while a labor ministry official estimated that more than 1 million jobs had been lost by late May.

In an apparent jab at Iranian hardliners who reject negotiations with the U.S. and favor continued war, Pezeshkian added: "We may have many things; we may even have missiles and bombs, but they are of no use."

Fuel Shortages and Gas Station Lines

Pezeshkian also noted that imports, including gasoline, are no longer entering the country. The naval blockade has not only blocked Iran from exporting oil through its ports—it has also cut off imports of the refined fuels the country depends on despite being a major oil producer. Iran holds some of the world's largest crude reserves, but years of underinvestment in refining capacity have long left it reliant on imported gasoline and other refined products, a structural vulnerability the blockade has now exposed.

The result has been shortages and long lines at gas stations, worsened by deep subsidies that encourage excess consumption. Pezeshkian described efforts to curb fuel demand and raise prices, but suggested the government cannot push too far.

"We shouldn't make someone whose life revolves around gasoline suffer," he explained. "We shouldn't put more pressure on those who are already under pressure. People are on the edge now; if I put more pressure on them, they might fall off the edge. We have to be careful that no one falls off."

Pezeshkian estimated that Iranian trade has plunged 25%–35%, with imports falling significantly more than exports. Trade intelligence firm Kpler reported that Iran's August crude export loadings have collapsed more than 80% compared to a year ago.

Since the naval blockade was reimposed, U.S. forces have redirected 82 commercial vessels, disabled three, and boarded two to ensure compliance, Central Command said on Friday.

"Some people say that sanctions have no effect at all," Pezeshkian said. "I really don't know what to tell these people. I just want to say this, saying that sanctions have no effect is not consistent with these facts."

U.S. Loosens Iran's Grip on Hormuz

While the U.S. military tightens its economic chokehold on Iran, it is simultaneously loosening Tehran's grip on the Strait of Hormuz. Last week, Central Command said U.S. forces had completed clearing sea mines from the strait's international shipping routes.

Estimates vary on exactly how much oil is getting through, but the volumes are substantial even if still well short of normal. According to Goldman Sachs, total exports of crude and oil products from the region have risen to 15 million–16 million barrels a day. Kpler said oil flows from the Persian Gulf have recovered to around 70% of pre-war levels.

U.S. officials told Axios that about 10 million barrels of oil a day are being transported out of the strait through the Omani corridor that the U.S. military is defending.

A two-week stretch of U.S. bombing last month degraded Iran's radar and maritime surveillance systems, the Axios report said, making it easier for tankers to slip through undetected at night with their transponders turned off. This has allowed vessels to make shuttle runs in and out of the strait, unloading their oil onto other tankers that then deliver the cargo to customers.

Iran is still attacking ships, but that has not been enough to stop traffic. The U.S. military continues to degrade Iran's ability to close the strait: on Sunday, U.S. forces struck Iranian rocket launchers that were preparing to deploy sea mines in the waterway.

Gregory Brew, an expert on Iran and oil at the Eurasia Group, said on X on Friday that Iran overplayed its hand in July, when it resumed attacks on shipping in the strait's southern route.

"The result: the MOU is dead, the blockade is back in place, and the US is succeeding (to a partial, but notable extent) at reopening the strait without another deal," he added. "Perhaps the status quo swings back in Iran's favor, but right now this looks like a miscalculation to me."

This story was originally featured on Fortune.com.