Iran to tackle economic issues, says further attacks will be 'more painful'

DUBAI, Sept 6 (Reuters) - Iran said it will step up efforts to tackle problems created by the U.S. sanctions that are crippling its economy, while a senior Iranian official warned of a "painful response" if it comes under further attack.Six months after U.S.-Israeli strikes against Iran, the war appears to be at a stalemate. A preliminary ceasefire accord reached in June has unravelled and little progress has been made in diplomatic efforts to get the peace process back on track.After a pause in military action for much of July, tit-for-tat strikes have resumed with U.S. Central Command saying it hit three Iranian tankers on Saturday in response to Iran's Islamic Revolutionary Guard Corps launching ballistic missiles at twoU.S. Navy ships.Following the attacks, Iran's Parliament Speaker Mohammad Baqer Qalibaf said on Sunday that the U.S. should understand that the rules of the game in the war against Iran have changed "before it is too late"."From now on, any attack against Iran’s interests and security will receive a faster, heavier and more painful response,” he said in a speech published on his Telegram channel.Tehran has shown it still retains the capability to attack U.S. interests in neighbouring countries and to shut down oil flows through the Strait of Hormuz, through which a fifth of global oil supplies flowed prior to the conflict.SANCTIONS, OIL BLOCKADE SQUEEZE ECONOMYHowever, the U.S. campaign to throttle Iran's economy by blockading its oil exports and stopping sanctions evasion is growing increasingly difficult to withstand, three senior Iranian sources have said.In his speech on Sunday, Qalibaf added that alongside the military front, Iran’s main battle was now over production and people’s livelihoods.He cited sharp currency fluctuations, inflation, unemployment and market management as major challenges, adding Iranians could tolerate hardship but not mismanagement or inaction and expected the government to act quickly.Iran's Economy Minister Ali Madanizadeh said that Tehran planned to respond to U.S. economic pressure with reforms and rejected the idea that sanctions would cause it to change course, according to state media on Sunday.“They speak of economic pressure and isolation, of breaking off financial ties and they think that by pressuring the economy of a country they can change the decisions of its people,” Madanizadeh said.“I have to clarify one point: the responsibility of reforming Iran’s economy is with its government and people, not with the U.S. Treasury."Separately, Economy Ministry deputy Morteza Zamanian said on Sunday that the ministry's “Economic War Headquarters” was doubling down on its work to resolve problems caused by the war, according to the semi-official Tasnim news agency.KHARG ISLAND HIT 550 TIMES IN PRIOR MONTHS, IRAN SAYSIran is the third-largest producer in the Organization of the Petroleum Exporting Countries and exported 90% of its crude via its Kharg Island export hub before the war. Flows have been disrupted since a U.S. blockade of Iranian oil exports began in mid-April.On August 31, Trump issued a one-line social media post accompanied by an AI-generated video depicting Kharg Island being "blown to smithereens." Iranian authorities have vowed a strong response ifKharg is attacked.In an interview aired on state TV on Sunday, Iran's Oil Minister Mohsen Paknejad said the island had been hit around 550 times in previous months but continued to operate.Iran has also imposed a blockade on the Strait of Hormuz, creating an issue for U.S. President Donald Trump by pushing up fuel prices globally ahead of midterm elections for his Republican Party in November.On Saturday, U.S. Central Command said it struck three Iranian vessels, including one off the coast ofKharg Island, after Iran's Islamic Revolutionary Guard Corps launched ballistic missiles at twoU.S. Navy ships.“Let the message to theIRGC be clear: If you shoot at two of our ships, we will impose an even higher economic cost — taking out three of yours," said Admiral Brad Cooper, head ofU.S. Central Command, which oversees the U.S. military in the Middle East.The IRGCresponded by threatening intensified strikes against U.S. military vessels in the region, and said later it targeted the three tankers as well as three U.S.-linked vessels in other areas."Do not be deceived by the 'terrorist'U.S. military and refrain from any suspicious movement aimed at passing through unauthorized waterways," the IRGC Navy said in a statement carried on Iranian state TV. "Otherwise, you will be targeted."Tasnim, the semi-official Iranian news agency, had reported that four U.S. missiles hit a tanker in the area of Kharg's anchorage. Tasnim quoted local sources as saying there were no casualties and the tanker's crew was being evacuated.No American personnel were harmed, Central Command said.On Sunday, Tasnim reported that the IRGC had shot down a U.S. surveillance balloon over Erbil in northern Iraq, describing it as part of a broader effort to eliminate U.S. aerial surveillance and early-warning systems in the region.(Reporting by Dubai Newsroom; Writing by Sharon Singleton; Editing by Toby Chopra) AL-MONITOR All-Access gives you unlimited access to all our journalism, the full Daily Briefing, exclusive interviews, premium newsletters, and live events — for less than $2/week.