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Iran's war-hit economy sees mass layoffs and business closures

Iran's war-hit economy sees mass layoffs and business closures
By Heba Habib, Danai Nesta Kupemba, Mariamne Everett, Federica Marsi, Tamila Varshalomidze, Stephen Quillen, Edna Mohamed and Alex Milan Durie
Published On 4 May 2026

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4 May 2026 - 23:59
 (23:59 GMT)

Our coverage continues

This live page is closing, but our 24-hour coverage of the war continues.

Join us for all the latest developments, analyses and reactions here.

4 May 2026 - 23:50
 (23:50 GMT)

Here’s what happened today

  • The UAE said it downed 15 missiles and four drones from Iran, and that it reserved the right to respond to what it called “treacherous” attacks. There has been no official comment from Iran on the attacks.
  • The US military said it sank six Iranian small boats that tried to interfere with commercial shipping during Project Freedom, the US operation to open the Strait of Hormuz. Iran has denied the reports.
  • Trump told Fox News that Iran will be “blown off the face of the Earth” if it attacks US vessels carrying out Project Freedom, adding that Iran “better hope” the ceasefire remains in effect.
  • First Vice President Mohammad Reza Aref said that managing the Strait of Hormuz is Iran’s “legitimate right”.
  • GCC Secretary-General Jasem Mohamed Albudaiwi condemned the attacks on the UAE as a “flagrant violation of the sovereignty” of a GCC member.
  • US Central Command said 50 commercial vessels have been redirected as of today to ensure compliance with its ongoing blockade of Iranian ports.
  • IMF Managing Director Kristalina Georgieva warned that if the war continues into 2027 and oil prices remain at $125 a barrel, “we have to expect a much worse outcome” than previously forecast.
4 May 2026 - 23:40
 (23:40 GMT)

US attempts to cross Strait of Hormuz will be met with ‘crushing’ response: Iran official

Yadollah Javani, deputy political officer of the IRGC, warned that any US attempt to intervene in the Strait of Hormuz would be met with a “decisive and crushing response”.

“Trump’s problem today is the opening of the Strait of Hormuz. He knocked on every door during the 40-day war and afterwards, but to no avail,” Javani told Iran’s ISNA news agency.

He said the US leader is seeking to open the waterway by “putting pressure” on Iran.

“This means that America is no longer a superpower; it has faced a superpower,” he said, echoing earlier remarks by Iran’s Foreign Ministry spokesperson, adding that US losses would far exceed Iran’s.

“The US will test its strength, bring all its might to bear, and will ultimately be defeated,” Javani said.

4 May 2026 - 23:30
 (23:30 GMT)

Turkish, Qatari FMs discuss regional developments during call

Foreign Minister Hakan Fidan spoke to his Qatari counterpart, Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani, to discuss the developments in the Middle East, Turkiye’s Anadolu news agency reported.

The two discussed developments related to ongoing talks between the US and Iran, according to diplomatic sources.

4 May 2026 - 23:20
 (23:20 GMT)

Hezbollah says it targeted Israeli tank in southern Lebanon in response to ceasefire violations

Hezbollah said it targeted an Israeli Merkava tank in the town of Biyyada with a guided missile on Monday night, claiming a confirmed hit and reporting that the tank was seen burning.

In a statement issued via Telegram, the group said the attack was carried out at 11:45pm local time (20:45 GMT), “in defence of Lebanon and its people, and in response to Israeli enemy violations of the ceasefire and attacks on villages in southern Lebanon”.

4 May 2026 - 23:10
 (23:10 GMT)

Iran’s FM says there is no ‘military solution’ to a ‘political crisis’

Iran’s top diplomat, Abbas Araghchi, has said the current situation in the Strait of Hormuz makes it “clear that there’s no military solution to a political crisis”.

“As talks are making progress with Pakistan’s gracious effort, the U.S. should be wary of being dragged back into quagmire by ill-wishers. So should the UAE,” he said in a post on X. “Project Freedom is Project Deadlock.”

4 May 2026 - 23:00
 (23:00 GMT)

Saudi Arabia condemns Iranian missile, drone attacks on UAE civilian, economic facilities

Saudi Arabia has condemned Iranian missile and drone attacks on civilian and economic facilities in the United Arab Emirates, as well as a vessel belonging to an Emirati company, the Saudi Foreign Ministry said in a statement.

The ministry urged restraint, backed Pakistani mediation efforts amid the regional escalation, and stressed the importance of restoring normal navigation through the Strait of Hormuz.

4 May 2026 - 22:50
 (22:50 GMT)
Analysis

Iran, US are ‘negotiating about negotiations’

The US and Iran remain far apart, but a narrow path to a nuclear deal may exist if both sides are willing to set aside the most intractable issues, according to Mark Kimmitt, former US assistant state secretary.

“The two sides are still a long way apart, especially on the nuclear issue,” Kimmitt told Al Jazeera. “What we are doing now is negotiating about negotiations.” He said the back and forth over Iran’s 14-point plan and the US response may eventually narrow the issues enough to get to actual talks.

Regarding the possibility of a deal, Kimmitt said: “In the 14-point plan, Iran touched a little on the nuclear programme, but what they are unambiguously unwilling to discuss is their ballistic missile programme. So, it may well be that we can make some progress on the nuclear programme if we set aside the ballistic missile issue as was done in previous nuclear negotiations.”

He said the key questions would be what to do with Iran’s 250kg (551lbs) of enriched uranium, and whether an enrichment limit “above zero but below 3.67 percent could be agreed upon that both sides could live with. Let us hope that could be the case.”

4 May 2026 - 22:20
 (22:20 GMT)

WATCH: Inside Lebanon’s education crisis amid Israeli-forced displacement

Israel’s war on Lebanon has displaced more than a million people and disrupted the education of a quarter of a million children across the country.

Hundreds of schools are now closed or being used as shelters for the displaced. At least 55 percent of Lebanese children are studying in schools, down from normal levels, while many others struggle with weak internet and overcrowded conditions.

One displaced mother says exams should be delayed, but education officials insist assessments must go ahead in safe locations where possible.

Al Jazeera’s Rory Challands reports from Beirut, Lebanon:

4 May 2026 - 22:00
 (22:00 GMT)
Analysis

‘It is almost as if the Iranians are goading us into restarting the fight’

Project Freedom, Trump’s plan to escort ships in the Strait of Hormuz, has raised the risk of escalation, but the United States had little choice but to act, according to Mark Kimmitt, former US assistant secretary of state for political and military affairs.

“If we had not done Project Freedom, we would be in a kind of stasis right now where we would not have any increase in tension of any kind,” Kimmitt told Al Jazeera. “But in this case, the United States has taken the risk to try to conduct these humanitarian escorts.”

Iran’s response has been striking. “They have declared a new security architecture in the Gulf, which includes claiming waters all the way down to Fujairah and Ras al-Khaimah. That is unprecedented. It is almost as if the Iranians are goading us into restarting the fight.”

On whether Project Freedom is more about leverage than humanitarianism, Kimmitt said Iran may interpret it that way, but the US motivation is genuine.

“I actually think this is a genuine effort by the United States to get these ships through, if for no other reason than to avoid international criticism,” he said.

“The US is trying to convince allies who consider this war illegal that there are genuine humanitarian issues here and that there are rational reasons for them to join.”

4 May 2026 - 21:50
 (21:50 GMT)

Trump paints ‘rosy picture’ as Iran war escalates

By Kimberly Halkett

Reporting from Washington, DC

There is no question that there is an escalation, which Trump appeared to be downplaying. While he didn’t address any attack on the UAE, what he did say is that there is a “mini war” going on with Iran.

Despite Iran’s potential capability for striking some of its Gulf neighbours, the US leader insists that Iran has no navy, no air force, and no leadership. Trump continues to paint a rosy picture.

Regarding his plan, Project Freedom, to guide ships through the Strait of Hormuz that have been stranded, Trump warned that Iran would be “blown off the face of the earth” if there was any interference, and said he would protect this effort forcefully.

It is clear the US leader has been ratcheting up his language, even as there has been an escalation in what is supposed to be a ceasefire.

4 May 2026 - 21:40
 (21:40 GMT)

Chevron CEO says physical shortages in oil supply to begin appearing

Chevron Chairman and CEO Mike Wirth says physical shortages in oil supply will begin appearing around the world because of the closure of the Strait of Hormuz, through which 20 percent of the global crude supply normally passes.

Economies will begin shrinking – first in Asia – as demand adjusts to meet supply while the strait remains closed because of the US-Israel war, Wirth said during a discussion sponsored by the Milken Institute.

4 May 2026 - 21:30
 (21:30 GMT)

IMF: ‘We have to expect a much worse outcome’ if Iran war lasts until 2027

Managing Director Kristalina Georgieva said the IMF’s previous prediction that the US-Israel war on Iran would lead to a slowdown in global economic growth and a minor increase in prices was no longer valid.

She added that if the war continues into 2027 and oil prices remain at $125 a barrel, “we have to expect a much worse outcome”.

4 May 2026 - 21:20
 (21:20 GMT)

WATCH: War’s toll on Gaza pregnancies

4 May 2026 - 21:10
 (21:10 GMT)

MBS condemns Iranian attack during call with UAE president

Saudi Crown Prince Mohammed bin Salman (MBS) spoke with UAE President Mohamed bin Zayed Al Nahyan via phone to express the kingdom’s “strong condemnation” of Iran’s attacks, the Saudi Press Agency reported.

MBS expressed South Arabia’s “denunciation of the unjustified Iranian attacks targeting the sisterly United Arab Emirates” and affirmed Riyadh’s support for the UAE in its “defence of its security and stability”.

4 May 2026 - 21:05
 (21:05 GMT)
Houthi

Lebanese police officer, soldier injured in Israeli attack: Lebanese army

An Israeli attack on southern Lebanon’s Kfar Kila has injured a Lebanese police officer and soldier, according to the Lebanese army.

It described their injuries as minor.

4 May 2026 - 21:00
 (21:00 GMT)

Latest developments

  • The US military said it sank six Iranian small boats that tried to interfere with commercial shipping amid the US operation to open the Strait of Hormuz. Iran has denied the reports.
  • Trump said Iran “better hope” the ceasefire remains in effect, and threatened to blow the country “off the face of the Earth” if it attacks US vessels.
  • Iran’s First Vice President Mohammad Reza Aref said managing the Strait of Hormuz is Iran’s “legitimate right”.
  • The UAE said it downed 15 missiles and four drones from Iran today. It reserved the right to respond to what it called “treacherous” attacks. There has been no comment from Iran on the attacks.
  • GCC Secretary-General Jasem Mohamed Albudaiwi condemned the attacks on the UAE as a “flagrant violation of the sovereignty” of a GCC member.
4 May 2026 - 20:50
 (20:50 GMT)

US-flagged car carrier safely escorted through Strait of Hormuz, says shipping company

Danish shipping company Maersk says the Alliance Fairfax, a US-flagged vehicle carrier, has left the Gulf after being escorted through the Strait of Hormuz by the US military.

Maersk added that there were no problems with the transit, and the crew are safe.

The vessel leaves behind hundreds of others and thousands of seafarers still stranded in the Gulf following Iran’s closure of the crucial waterway.

4 May 2026 - 20:40
 (20:40 GMT)

Iran’s FM briefs security committee on proposals put forward in Pakistan

Araghchi attended a meeting with the parliament’s National Security and Foreign Policy Commission, where he outlined the proposals and suggestions raised during the Iran-US talks in Islamabad.

Iran’s foreign minister reportedly briefed the commission on the latest developments concerning efforts to end the war.

The statement released by Iran’s Foreign Ministry also said the committee expressed concerns about the talks with the US, and stressed that negotiators should ensure Iran’s interests come first.

4 May 2026 - 20:30
 (20:30 GMT)
Explainer

Does Trump hold ‘all the cards’ against Iran in the Strait of Hormuz?

By Usaid Siddiqui

The US’s most enduring source of leverage over Iran remains its sanctions regime, which was launched in 1979 when Ayatollah Ruhollah Khomeini declared Iran an Islamic Republic.

Successive US administrations over the past 47 years have hit Tehran with a series of financial restrictions targeting Iran’s banking, oil exports and access to international markets – the US says the sanctions are a response to Iran’s nuclear programme.

Sanctions have significantly constrained Iran’s economy, limiting government revenue and contributing to inflation and currency depreciation. Measures enforced through the US Treasury also deter other countries and companies from engaging with Iran, further strangling its economy.

The economic pressure has been central to US strategy towards Iran, particularly during its attempts to force Tehran back to negotiations over its nuclear programme, under both Democratic and Republican administrations.

Read more here.