News
The Israeli-American attacks on Friday targeted one of the most sensitive pillars of Iran’s economy: steel and iron.
This sector is a core driver of non-oil revenue, a pillar of the construction market, and a key input for industries ranging from automobiles and home appliances to some military uses.
Available reports indicate that the strikes hit Mobarakeh Steel in Isfahan and Khuzestan Steel Complex, and also affected other industrial sites, including facilities in Firouzabad. The International Atomic Energy Agency also confirmed that the Khondab heavy water facility was among the sites affected by the attacks.
The New York Times described what happened as a broader shift in targeting toward civilian industrial and economic infrastructure.
Economically, the importance of this sector is large enough to explain why it was chosen. Data cited by Mehr from the Iranian Steel Producers Association said Iranian iron and steel exports reached $6.5 billion in the first ten months of the current Iranian year, which began on March 21, 2025, marking a 22% year-on-year increase. Earlier data published by Tehran Times also showed that the sector’s exports in the previous Iranian year ending in March 2024 reached $7.8 billion. At the same time, the World Steel Association places Iran among the major global producers, estimating its crude steel output at about 30.9 million tons in 2025.
The strike on this sector carries three levels of impact.
The first is monetary: any prolonged disruption to production or exports puts pressure on one of Iran’s most important non-oil sources of hard currency.
The second is domestic: steel feeds directly into construction, housing, and infrastructure, meaning that damage to its production lines or power supply would raise execution costs and slow projects.
The third is broader industrial: steel is an indispensable intermediate material for many sectors, so damage to this core industry could quickly spill over to auto plants, equipment makers, appliance manufacturers, and supplier networks.
This targeting should not be measured only by what Israel destroyed today, but by what may stop functioning tomorrow.
If the major complexes, their linked power stations, or the ports and logistics services tied to them continue to be hit, the damage could shift from a temporary production loss to a wider industrial chokehold. The New York Times quoted a senior Iranian official as saying that striking steel plants represents a major blow to the economy and will complicate postwar recovery and reconstruction, because these complexes produce essential materials for buildings and roads.
The nuclear side carries a different kind of impact. The International Atomic Energy Agency confirmed that Khondab, the under-construction heavy water reactor, was among the affected facilities, but also said it did not contain nuclear material. That points more to the disruption of sensitive infrastructure and a rise in the cost of continuation and development, rather than an immediate loss of an existing nuclear stockpile at the site itself. Likewise, targeting facilities linked to the fuel cycle or support infrastructure deepens the cost of the program and lengthens the time needed to restore it.
This comes in addition to the effects on the labor market and social pressure. Iran’s large steel complexes employ substantial numbers of workers directly and indirectly through contractors, transport labor, services, and industrial supply chains. Any prolonged shutdown or reduction in operations because of damage, power cuts, or supply disruptions would quickly show up in the form of partial unemployment through:
• reduced working hours,
• or frozen investments.
What next?
If these strikes continue, the file is likely to shift from a military story to a far heavier economic one, marked by:
• declining exports,
• pressure on the exchange rate,
• disruption in construction and manufacturing,
• and a higher cost for any postwar recovery.
More importantly, targeting steel alongside the nuclear program means the campaign is not only hitting Iran’s ability to respond now, but also its ability to rebuild itself later.
