Protests Sweep Iran Amid Economic Collapse and Leadership Crisis

A wave of protests that began in late December 2025 has evolved into the most serious challenge to the Islamic Republic in decades, unfolding against a backdrop of economic catastrophe, violent state repression, and the death of Supreme Leader Ayatollah Ali Khamenei in an Israeli airstrike.

Origins and Escalation

The protests ignited on December 28 in Tehran's Grand Bazaar, when merchants and shopkeepers shut their businesses to protest the Iranian rial hitting a record low of 1.4 million against the US dollar.

What began as economic demonstrations quickly metastasized into a nationwide uprising. Within days, protests spread to over 100 cities and towns, drawing in students, workers, and members of ethnic minority groups including Kurds, Azeris, and Baluch.

Protest slogans shifted sharply from economic grievances to direct condemnation of Supreme Leader Ayatollah Ali Khamenei and the clerical system. Chants of "Death to the dictator" and explicit calls for regime change became commonplace.

Unlike the 2009 Green Movement or the 2022 "Women, Life, Freedom" uprising, this wave is leaderless, decentralized, and united by one demand: the overthrow of the Islamic Republic itself.

The Economic Crisis: Root Cause

The protests are rooted in a devastating economic downturn. Since the 1979 revolution, the Iranian rial has depreciated dramatically, reaching its historic low in late December 2025.

In 2025 alone, the rial lost 84% of its value, while food prices surged by over 70%. Contributing factors include:

• International sanctions limiting oil exports and financial transactions
• Domestic mismanagement and widespread corruption
• The collapse of Ayandeh Bank—the country's largest private bank—in October 2025, with over $7.3 billion in debt. The central bank described it as a "Ponzi scheme."
• Government assumption of the bank's debts, leading to further money printing and inflation

Additional economic pressures compounded the crisis:

• A 12-day war with Israel in June 2025
• US airstrikes on Iranian nuclear facilities in June 2025
• A severe drought affecting 20 provinces and persistent electricity blackouts
• The weakening of regional allies, including the fall of Syrian President Bashar al-Assad in December 2024 and Israeli attacks on Hezbollah in 2025

Government Response and Crackdown

The Iranian government responded with overwhelming force. Security forces—including the Islamic Revolutionary Guard Corps (IRGC) and the Basij militia—were deployed nationwide. Authorities cut internet access and telephone lines across the country, a measure independent watchdogs describe as a precursor to violent crackdowns.

Casualty reports vary dramatically:

Rights groups have documented the use of live ammunition against protesters, raids on hospitals to arrest the wounded, and a sharp increase in executions.

HRANA reported at least 2,063 executions in Iran in 2025—a 119% increase from the previous year. Detainees face charges including "waging war against God," which carries the death penalty.

Leadership and Power Structure

Death of Supreme Leader Ayatollah Ali Khamenei

On Saturday, Supreme Leader Ayatollah Ali Khamenei, 86, died following an Israeli airstrike, according to a source briefed on the attacks. US President Donald Trump announced the death on social media, attributing it to US intelligence and surveillance capabilities.

Khamenei had served as Supreme Leader since 1989. During his 36-year rule, he consolidated power with IRGC support, opposed the US and Israel, supported proxy groups like Hezbollah and Hamas, and oversaw Iran's ballistic missile and nuclear programs.

At the time of his death, key proxy groups were weakened, Iran's air defenses were damaged, and its nuclear program had been compromised by US and Israeli strikes.

Transfer of Authority to Ali Larijani

In early January, prior to Khamenei's death, reports emerged that he had delegated significant authority to Ali Larijani—a former Revolutionary Guards commander and head of the Supreme National Security Council.

According to The New York Times, citing senior Iranian officials and Revolutionary Guards members, Khamenei instructed Larijani to ensure the Islamic Republic's survival against potential US and Israeli airstrikes and possible assassination of top leadership.

Larijani was tasked with steering the country, reportedly sidelining President Masoud Pezeshkian. Iran placed its armed forces on the highest state of alert, positioning ballistic missile launchers along its western border with Iraq and its southern coast on the Persian Gulf.

Following Khamenei's death, the identity of his successor remains unclear.

Opposition Groups and Fragmentation

Iran's opposition remains fragmented, with no single leader or group uniting the movement.

Reza Pahlavi: The exiled son of the former Shah, based in the United States, has gained prominence among some protesters. He advocates for a secular, democratic republic decided by referendum—not a monarchy. He has established a defection platform for regime insiders, with "tens of thousands" reportedly applying. However, he remains divisive; some Iranians fear a return to monarchy or excessive foreign reliance. Ethnic minority groups express skepticism that his proposed transitional government would centralize power.

People's Mojahedin Organisation (MEK/MKO): This exiled leftist group, led by Maryam Rajavi, advocates for a secular republic. Previously designated a terrorist organization by the US, it was removed from that list in 2012. Rights groups criticize the MEK for practices described as cult-like.

Hamgami (Solidarity for a Secular Democratic Republic in Iran): Formed in 2023 by exile groups, this coalition supports separation of religion and state, free elections, and an independent judiciary. It has limited traction inside Iran.

Ethnic Minority Groups: Kurdish and Baluch communities have joined the protests, adding demands for decentralization, linguistic and cultural rights, and power-sharing to broader calls for regime change.

Inside Iran: The protests lack unified internal leadership. Activists rely on networked organizing through student groups, social media, and neighborhood networks. Former President Hassan Rouhani has remained silent, and reformist figures have been arrested.

International and Regional Reactions

United States: President Trump publicly encouraged Iranian protesters to "keep protesting and take over state institutions." He announced 25% tariffs on countries doing business with Iran and reiterated threats of military action. The US State Department expressed concern over "intimidation, violence, and arrests." The US and Israel carried out the airstrikes that killed Khamenei.

Israel: Prime Minister Benjamin Netanyahu discussed Iran's ballistic missile program with President Trump. The Israeli military conducted the airstrike that resulted in Khamenei's death.

European Union: EU officials condemned the use of force and announced further sanctions. Germany's Chancellor Friedrich Merz predicted the Iranian regime was in its "final weeks." Iran's ambassadors in France and the Netherlands were summoned to protest the crackdown.

United Nations: Mai Sato, UN Special Rapporteur on human rights in Iran, expressed concern that the actual death toll could be significantly higher than reported.

China: The Chinese government maintained a position opposing external interference in Iran's internal affairs. However, on Chinese social media, public discussion included both support for protesters and support for the Iranian government against "US imperialism."

Regional and Security Context

The protests occurred alongside significant military developments:

• A 12-day war between Iran and Israel in June 2025
• US airstrikes on three Iranian nuclear enrichment sites on June 21, 2025, which President Trump stated were "completely and totally obliterated"
• The weakening of Iran's proxy network, including Hamas and Hezbollah, following Israeli operations
• The fall of Syrian President Bashar al-Assad in December 2024

Following Khamenei's death, Iran's ballistic missile program remains intact, but its air defenses are reportedly destroyed and its nuclear program is in disarray. The IRGC—estimated at 150,000 personnel with hundreds of thousands of Basij auxiliaries—maintains control over security and key economic sectors.

Future Outlook

Experts suggest the Islamic Republic is not on the verge of imminent collapse, citing continued security force loyalty and an absence of high-level defections. However, the crackdown has depleted state resources and legitimacy, and the regime faces sustained pressure from both internal unrest and external military threats.

Analysts outline three potential scenarios:

• Continuity with recalibration: A pragmatic successor to Khamenei prioritizes economic reconstruction and de-escalation.
• Hardliner consolidation: The regime consolidates around a harder-line leader, increasing repression and isolation.
• Regime collapse: Widespread internal defections and sustained protest momentum lead to a breakdown of state control, potentially resulting in civil conflict or fragmentation along ethnic lines.

The European Union has designated the IRGC as a terrorist organization. Iran has commenced nuclear negotiations with the US, though significant policy gaps remain over enrichment and ballistic missiles.