Newscast: What’s The Economic Cost Of The War In Iran?
BBC News — March 9, 2026
Episode Overview
In this episode, Newscast dives deep into the economic and political reverberations of the ongoing war in Iran. The team unpacks how the conflict is disrupting global markets, driving up energy prices, and catalyzing political divisions in Europe and beyond. BBC experts are joined by Darshini David (Deputy Economics Editor), Katya Adler (Europe Editor), and Siavash Ardalan (BBC Persian) to explore the local and global impact, as well as discuss the appointment of Iran’s new Supreme Leader amidst tumult and uncertainty.
The War in Iran: Economic Shockwaves
• Oil Prices Soar
- The price of oil surged above $100 a barrel for the first time since 2022.
- This spike follows major interruptions to shipping through the vital Straits of Hormuz.
"We're looking here at a quite sort of blistering rise in oil prices. And gas futures have doubled in the last 10 days." — Darshini David [03:12]
• Gas and Energy Futures
- Gas futures have also doubled, signaling expectations of further price hikes.
- This surge is stoking inflation fears despite not (yet) reaching the peaks seen during the early Ukraine war.
• Impact on Consumers
- Petrol prices at the pump are already rising; heating bill impacts will be seen after a lag due to existing price caps (in the UK, cap remains till end of June).
- Businesses will feel the squeeze sooner, especially energy-intensive industries.
"If this is sustained at these levels or go even higher... we are looking at... that downward sort of trend we've had in inflation... likely to be derailed." — Darshini David [03:57]
• Mortgage Rates and Bond Markets
- Market instability has translated into upward pressure on fixed mortgage rates in the UK and elsewhere, reminiscent of the mini-budget spike.
"Those kind of rates are on the climb again. You may also notice prices start creeping up. I'm thinking things like airfares, for example." — Darshini David [04:34]
European Responses and Political Friction
• Fragmentation and Alliance Tensions
- The G7 finance ministers met to discuss collective action but, as Katya Adler notes, "every country is worrying about itself.”
- The EU is trying to coordinate but continues to display fragmentation, notably between Germany and Spain over relations with the US and responses to international law.
"At the end of the day, every country is worrying about itself... Europe can no longer fully rely on the United States as a predictable ally." — Katya Adler [08:27]
• Strategic Oil Reserves
- Release of emergency oil stockpiles is being discussed. Governments and producers are trying to calm markets by signaling readiness, but are reluctant to exhaust reserves too soon.
"They're all watching these markets very nervously... We stand ready... If we are saying that we are ready, we are poised, then the markets will be reassured." — Darshini David [09:50]
• Broader Geopolitical and Economic Risks
- Rising energy costs risk renewed inflation, new migration pressures, and further economic instability across Europe.
- The chronic cost-of-living crisis scars public sentiment; UK government is wary of political backlash if inflation returns.
"People don’t get growth, but cost of living they absolutely do... This looks likely to derail things." — Darshini David [11:53]
Europe, the US, and the Trump Factor
• Unpredictability of the US Alliance
- Europe finds itself squeezed between an expansionist Russia, aggressive China, and an unpredictable US—heightened under the Trump administration.
- European reactions to US actions show both fragmentation and attempts to coordinate (notably the E3: UK, France, Germany joint statement post-Israel/US attack).
"Europe has a choice. Does it act individually... or does it act together in concert?... when it came to it, it seemed fragmented." — Katya Adler [13:09]
• UK State Visit Dilemma
- Speculation swirls about whether King Charles’ state visit to the US will proceed, with some UK politicians (Ed Davey, Lib Dems) calling for cancellation due to Trump’s rhetoric.
- The government is treading carefully, emphasizing ongoing importance of the US partnership despite criticism.
"To pull that away would be... huge if they were to." — Alex [22:09]
"Not wanting to alienate Donald Trump because of Ukraine. Europe still needs the United States onside." — Katya Adler [22:53]
Iran: Leadership Change and Internal Dynamics
The Appointment of Mojtaba Khamenei
• Who is Mojtaba Khamenei?
- Newly appointed Supreme Leader, son of the late Ayatollah Khamenei.
- His identity and background remain opaque: he is rarely seen in public, never held executive office, and was swiftly elevated in clerical rank upon appointment.
"Iranians and the whole world will be... watching very keenly just to see, you know, what his mindset is." — Siavash Ardalan [27:05]
• Power Structure Explained
- Supreme Leader holds ultimate authority—military, judiciary, and ability to validate election results.
- The President, though directly elected, ultimately answers to the Supreme Leader, highlighting theocracy over democracy.
"It's the title of the Supreme Leader of Iran, which carries with it absolute power. And I don't mean in a figurative way: absolute power. Formally, whatever you say goes. Your word is the word of God." — Siavash Ardalan [28:51]
• Reaction to His Appointment
- Mixed: loyalists jubilant, but the majority (who recently suffered mass crackdown) view hereditary succession and the regime with disdain.
_"Hence, on one hand, you had those celebrations, and then... you had people chanting from the rooftops and the windows, 'death to Mujtaba Khamenei.'" — Siavash Ardalan [37:06]
Iran’s Economic Turmoil
• People’s Hardship
- Inflation was estimated at 60% even before latest conflict; dual currency system fuels corruption and profiteering.
- Poverty has doubled in two decades.
- US secondary sanctions sharpen the economic crisis.
"Poverty has doubled in the past 20 years... The authors of those policies had in mind... to drive Iranians to the point where they would revolt against their government. And that's exactly what happened." — Siavash Ardalan [38:39]
• Post-War Conditions
- Prices of basic goods have risen further; food and energy are available but often unaffordable for many.
Outlook for Iran’s New Leadership
- Mojtaba Khamenei expected to take a hardline stance, vowing resilience and ongoing confrontation with the US and Israel.
- The regime’s strategy appears to be endurance—absorbing military blows while inflicting economic pain through oil price disruptions.
"Their strategy is... resilience, just taking the blows and inflicting enough economic damage... I think he will continue with that." — Siavash Ardalan [40:15]
- Longer-term, the question remains if he will be an uncompromising hardliner ("the next Kim Jong Un of Iran") or could shift the regime ("the next Bin Salman of Iran").
Notable Quotes & Memorable Moments
- "At the end of the day, every country is worrying about itself... Europe can no longer fully rely on the United States as a predictable ally." — Katya Adler [08:27]
- "It’s the title of the Supreme Leader of Iran, which carries with it absolute power. And I don't mean in a figurative way: absolute power. Formally, whatever you say goes. Your word is the word of God. Finished." — Siavash Ardalan [28:51]
- "This is the last thing the government needed. And who knows, when we get to July, if this carries on, we might need some help." — Darshini David [12:34]
- "Sometimes it'll be fragmented, sometimes countries will be able to work together." — Katya Adler [16:15]
- "We've just marked the four year anniversary of the full scale invasion of Ukraine. If Russia’s not stopped in Ukraine, it will set its sights on other European countries..." — Katya Adler [13:20]
Key Timestamps
- 02:00 — Oil prices spike; first above $100/barrel since 2022
- 03:39–05:43 — Darshini David explains direct impacts: inflation, mortgages, business costs
- 06:00 — European & G7 political responses; Katya Adler details fragmenting alliances
- 09:01–10:31 — Strategic oil reserves: releasing stockpiles as a tool to calm markets
- 13:09–15:30 — Europe’s “choose your allies” dilemma in an unpredictable world
- 18:17–22:24 — UK’s state visit controversy, political management of US-UK ties under Trump
- 23:39–24:56 — Markets react to Iran’s leadership change; fear of hardening positions
- 26:26–29:03 — Siavash Ardalan on who Mojtaba Khamenei is, and what his selection signals
- 31:41–35:39 — Iranian power dynamics & public reaction to hereditary succession
- 37:28–39:58 — Iran’s hyperinflation, sanctions, and economic desperation
- 39:58–41:13 — Prospects for Iran under Mujtaba: hardline stance and the regime’s “long game”
Final Thoughts
This episode intricately analyzes the multi-faceted costs of the Iranian war, both inside Iran and internationally. Listeners will gain rich insights into how economic, political, and social factors are intertwined in the crisis—from soaring oil prices to questions of international alliances and the resilience of authoritarian regimes. The tone remains factual, occasionally urgent, and always focused on demystifying a fast-moving, complex situation.
If you have questions or want specific issues covered in future episodes, the hosts encourage you to get in touch via their usual channels.