Iran: What challenges face the country in 2026?
Iran begins 2026 with extensive protests sparked by its weak economy. Pressure remains on Hamas and Hezbollah to disarm. The US and Israel may conduct strikes.
In 2025, the US and Israel struck Iran’s nuclear programme, the UN reimposed sanctions against the country and its economy continued to struggle.
Iran’s regional position also worsened. Established leaders of many Iran-backed armed and proscribed terrorist groups have been eliminated, and their strength weakened in the regional conflict that has been ongoing since 2023. Some Iran-backed groups are facing renewed local and international calls to disarm.
This briefing surveys the situation in Iran, including the challenges facing its government; the status of Iran’s nuclear programme and the potential for further strikes in 2026; and pressures on Iran-backed groups in the region.
1.1 Fresh protests in 2026Beginning on 28 December 2025, protests initially spurred by Iran’s deteriorating economy and rising inflation have been held in all 31 of Iran’s provinces. They have included areas considered typically loyal to the state.
Iran’s Supreme Leader, Ali Khamenei, said that the government would speak with protesters but that “rioters should be put in their place”.
In response to the protests, Iran’s central bank governor has been replaced and a new system of subsidies to support households purchase essential goods has been announced. Political groups previously allied to President Masoud Pezeshkian during his 2024 election campaign have called for “institutional and sustainable reforms” and the protection of the right to protest.
Human rights monitors report that between 36 and 45 people have been killed and that over 2,000 people have been arrested. These numbers have not been further verified. An internet blackout has also been reported.
The UK Government has said “we urge Iran to protect fundamental freedoms”.
The US President, Donald Trump, has said the US is ready to intervene if there is further violence against protesters (see below, section 1.8, for more information on potential military strikes).
1.2 Iran has a history of protestIran is far from a stranger to protests (BBC Monitoring provides a timeline of protests in 2025), though there has been increasing recourse to violence by the Iranian authorities in their response in recent years.
The 2025–26 protests are widely regarded as the most extensive since the “Women, Life, Freedom” protests that followed the death of the Kurdish–Iranian woman Mahsa Amini in 2022. However, at the time of publication, the 2025–26 protests remain smaller in scale than those in 2022 and similar nationwide protests in 2009, 2017-18 and 2019.
International responses to the 2022 protests included sanctions for human rights violations by the UK and its partners, and the establishment by the UN Human Rights Council of an independent International Fact-Finding Mission on Iran, which remains in place.
In addition to disputed elections and rights violations, protest motivations often reflect wider weaknesses in Iranian state capacity, including the provision of basic water supplies and energy infrastructure; corruption; and Iran’s economic performance under sanctions.
Despite recurrent protests, unified opposition to the Iranian regime has been largely absent and security forces have remained loyal to the state.
Analysts note that even if the regime were to fall, there exists a range of possible outcomes including further clerical or military rule, as well as democracy.
Debate also continues on candidates who could succeed Ali Khamenei, who is 86.
Local elections in May offer a further potential avenue for dissent.
1.3 The use of the death penalty rose in 2025The protests that began in December 2025 follow extensive domestic suppression by the Iranian government after the June 2025 Israel/US strikes on Iran’s nuclear facilities (see below, section 1.8).
Citing foreign espionage and targeting dissenters and religious and ethnic minorities, the Iranian state arrested a reported 21,000 people in June. Iran’s use of the death penalty also increased: Norway-based Iran Human Rights reports that at least 1,500 people were executed in Iran in 2025, an increase on previous years.
The Iranian Government’s actions also included attempts to punish breaches of the Islamic dress code, though more selective enforcement has since been reported. The Iranian Government continues to plan a new hijab dress code, after enforcement of a new stricter law was suspended at the end of 2024, following opposition.
1.4 The outlook for Iran’s economy remains poorIn 2023, 2024 and 2025, Iran’s Supreme Leader identified combatting inflation and improving the domestic economy as leading national missions.
In 2025, the Iranian currency, the rial, continued to fall, halving in value between July 2024 and March 2025, and reached a record low in December 2025. This reflects a five-year period of annual inflation rates being above 30%. In 2025, food price inflation in Iran was above 70%.
Noting the effects of sanctions and declining oil income, in October 2025 the World Bank projected that Iran’s economy would shrink in both 2025 and 2026, and that annual inflation would rise towards 60%.
The capture of Venezuelan president, Nicolás Maduro, by the United States in January 2026 also poses a challenge to Iran’s economy. Iran and Venezuela have long-established economic ties to offset sanctions, including the trade of oil and drones.
These ties are represented by the Bella 1 ship (renamed the ‘Marinera’), which was accused of being part of a “shadow fleet” carrying sanctioned oil for Venezuela, Russia and Iran. The Bella 1 was intercepted by the US in January 2026, with UK support.
1.5 UN sanctions were reimposed in 2025In September 2025, sanctions under the 2015 Iran nuclear deal came back into force, having been triggered by the UK, France and Germany (the ‘E3’).
The three governments said that Iran had been in “significant non-performance” with the agreement. Restored UN sanctions target Iran’s nuclear and missile production. They come alongside wider European and American sanctions on the Iranian economy and its nuclear and missile programmes. All three states have called for talks to resume.
How far the sanctions will be adhered to internationally is uncertain: Russia says it does not recognise the restoration of the sanctions and China has said “countries should stop pushing for sanctions [against Iran] and inciting confrontation”.
The UK has said it is “concerned” about potential non-adherence with the sanctions.
Despite sanctions, China has continued to purchase most of Iran’s oil exports.
While Iran has increasingly turned towards China and Russia, analysts do not expect either to provide significant defence or security support (echoing their responses to the June 2025 US/Israel military strikes).
1.6 Iran’s ‘axis of resistance’ has been weakenedIran has long backed, financed and armed a range of proscribed terrorist and armed groups in the Middle East to exert pressure on Israel and the US, and the politics of neighbouring states.
However, between 2023 and 2025, Iran’s regional military position has deteriorated. In 2024, Iran lost a significant ally in Syria’s Bashar al-Assad when he fled Syria, marking the end of its civil war. US and Israeli military strikes have also weakened Iran’s nuclear programme and the country’s defences.
In 2026, the US and its international allies are pushing for Iran-backed groups to disarm or be absorbed into state armed forces. More detail about these groups is outlined below.
Hamas in GazaUnder the October 2025 agreement, Hamas is to disarm and not wield power in Gaza.
However, Hamas has not committed to disarm, citing Israel’s continuing presence and lack of progress on Palestinian statehood. President Trump said there will be “hell to pay” if the group does not surrender its weapons.
Hezbollah in LebanonUnder the 1989 Taif Accords, agreed at the end of Lebanon’s civil war and in subsequent UN Security Council resolutions, Hezbollah is to disarm.
Since the 2024 ceasefire, the Lebanese Armed Forces have been extending their control over Hezbollah-controlled parts of south Lebanon, but the process is not complete. Israel has continued to conduct strikes against Hezbollah in 2026.
The US also argues its Venezuelan action in January 2026 will weaken Hezbollah’s Latin American presence, where it employs regional drug trafficking as a source of income.
Popular Mobilisation Forces in IraqIn 2025, the US said there was an “urgency” in disarming the Iran-backed Popular Mobilisation Forces (PMF).
While legalised by the Iraqi state to combat Islamic State/Daesh in 2016, some elements of the PMF are judged to be outside Iraqi state control. Iraqi politicians have suggested any disarmament can only occur after US troop withdrawal in September 2026.
Houthis in YemenThe Houthis in Yemen are an exception to the pattern of disarmament. Despite US, UK and Israeli strikes between 2023 and 2025, the Houthis have retained power and influence over the majority of Yemen.
As set out in the Commons Library briefing on Yemen, as of 2026, the Houthis face a divided opposition, though the main battle lines have been frozen since 2022.
1.7 Changing views of Arab states towards IranAnalysis by the international thinktank Chatham House notes that Arab states no longer view Iran as the main source of regional instability in the Middle East. In 2025, the thinktank argues, this shifted to include Israel because of its strike on Qatar against Hamas leaders.
This shift also follows the restoration of diplomatic ties between Saudi Arabia and Iran in 2023, following Chinese meditation.
Despite strains, Israel’s relations with Arab states achieved under the 2020 Abraham Accords remain in place: See the Library’s Israel and the Abraham Accords in 2025: Five years on.
1.8 Israel and the US may launch further strikesHaving long fought a “shadow war”, since 2024, Israel and Iran have conducted three direct exchanges: in April 2024, October 2024 and June 2025.
In the June 2025 strikes, Israel, together with the United States, primarily targeted Iran’s nuclear programme. In response, Iran struck a US military base in Qatar.
Iran has acknowledged extensive damage from the strikes, though it continues to be in dispute with the International Atomic Energy Agency (IAEA) over allowing monitoring of its nuclear programme and resolving safeguarding issues (PDF).
In January 2026, the Israeli Prime Minister, Benjamin Netanyahu, said that Israel will not allow Iran to re-establish its missile or nuclear programmes. President Trump has said that while the US remains open to a deal with Iran, if Iran begins to re-establish its nuclear programmes, “we’re going to have to knock them down”. He has also said that the US will intervene to protect the January protesters from state violence, should it occur.
Iran’s foreign minister, Abbas Araghchi, has said that Iran has “reconstructed everything that was damaged” in June 2025 and that the Iranian military is prepared to defend the country.
The UK says that it remains committed to a diplomatic solution, and that the IAEA must be allowed to verify the location of Iran’s enriched uranium.
1.9 Further reading on the Middle East and North Africa (MENA) in 2026- German Institute for Global and Area Studies, Ten things to watch in the Middle East and North Africa in 2026, January 2026
- Middle East Institute, Iran’s political deadlock — and a way out the regime is unlikely to take, January 2026
- Middle East Institute, Unfinished business will drive the Mideast agenda in 2026, December 2025
- Italian Institute for International Political Studies, Striving for stability: What lies ahead for the MENA region in 2026, December 2025
- Middle East Institute, Iran’s axis of resistance after the 12-day war: Adaptation, restructuring, and reconstitution, December 2025
- Armed Conflict Location Event Dataset, Israel recalibrates its military campaigns in a region still on edge, December 2025
- Foreign Affairs, The Middle East that Israel has made, October 2025
- Iranian state threat activities in the UK, December 2025
- The E3 trigger snapback sanctions against Iran, September 2025
- Iran in 2025: How strong does it remain in the Middle East?, January 2025
- Two-year anniversary of the Mahsa Amini protests in Iran, September 2024
- What might Iran’s new president mean for foreign policy?, July 2024
- Iran’s 2024 elections, March 2024