Three scenarios for the dollar: Hormuz, stalemate, or talks?

The US dollar trades at about 189,000 toman on Iran's free market today. A year ago it was 93,000. It has doubled in twelve months.

The question everyone is asking: if the confrontation with the United States over the Strait of Hormuz escalates, where does the dollar go? And what if talks start instead?

Rather than guess, we looked at our own data. Dolarchand has recorded the free-market rate since November 2012 — more than 1,390 observations across nearly fourteen years. That archive lets us ask a sharper question: historically, what has each political condition actually cost the rial?

1. The engine that runs in every scenario

Before politics, one plain fact:

Window	Annualised rise in USD
Last 10 years	49%
Last 5 years	48%
Last 3 years	56%
Last 12 months	103%

The ten-year and five-year numbers are nearly identical: about 50% a year. That is not a coincidence. When money supply grows 40–50% annually and output does not, the currency loses value at roughly that pace. War and diplomacy do not switch this engine off — they only change its speed.

Keep that in mind while reading the rest: no scenario produces a cheap dollar. The question is only how fast it gets more expensive.

2. What history says each political condition is worth

This table comes straight out of our archive. Each row is a distinct political period, and the last column is the annualised rise in the dollar during it:

Period	Condition	Annualised
Nov 2013 – Jul 2015	Geneva talks through to the JCPOA	5%
Jan 2016 – May 2018	JCPOA in force	28%
May – Sep 2018	US withdrawal (4.5 months)	+196% total
Apr 2021 – Mar 2022	Vienna talks	5%
Mar 2022 – Jun 2025	No war, no deal	43%
Sep 2025 – today	After sanctions returned	88%

Two numbers matter more than the rest.

In both negotiating periods — 2013–15 and 2021–22 — the dollar rose just 5% a year, against a long-run average of 50%. Simply being at the table, with nothing signed, cut the rate of depreciation by roughly 90%.

And the one that surprises people: the JCPOA, while it was actually in force, did not make the dollar cheaper. Between January 2016 and May 2018 it rose 28% a year. The deal did not reverse the price. It stopped it running.

3. The key finding: the market ignores missiles and prices plumbing

This is the heart of the analysis.

Consider the twelve-day war of June 2025. In our archive there is no rate recorded between 11 and 24 June 2025 — a genuine gap in the data. The bazaar effectively shut; exchangers stopped quoting.

When it reopened:

• Night before the war: 83,535 toman
• Ceasefire day: 82,870 — lower than before the war began
• Post-ceasefire peak (30 June): 91,720, about 10% higher
• Two weeks later: back to ~87,000, half the jump given back

The largest military confrontation the region has seen in decades added roughly ten percent, half of which unwound.

Now compare the return of UN sanctions in late September 2025: the dollar went from 83,000 to 110,000, +32%, and — more importantly — opened a regime that has been running at 88% a year ever since.

The conclusion is hard to avoid: Iran's currency market does not react to bombs. It reacts to the interruption of foreign-currency income.

Which is precisely why Hormuz matters — not because it is a battlefield, but because it is the artery through which oil is sold and money comes back.

4. Scenario A — escalation in Hormuz

Two cases must be separated, because the market treats them very differently.

(a) Military tension without an export cut. Tanker seizures, limited exchanges of fire, exercises, threats. This follows the June 2025 pattern: an initial jump, then a partial retracement. Oil still ships, money still returns, the underlying engine is unchanged.

• 3 months: 200,000–230,000 toman
• 12 months: 290,000–380,000 toman

(b) Serious disruption to exports. Effective closure of the strait, a naval blockade, or anything that halts oil sales for months. This is not a risk premium — it is the removal of the country's dollar supply. The right analogue here is 2018, not 2025: when export revenue was cut off, the dollar tripled in four and a half months.

• 3 months: 250,000–320,000 toman
• 12 months: 400,000–600,000 toman, with a real tail risk above that if disorder spreads

Case (b) is extremely costly for Iran too, which argues its probability is low — but low is not zero.

5. Scenario B — no war, no negotiations

The most likely path, and the dullest: nothing is resolved and nothing explodes.

For this we have a precise historical figure. From March 2022 to June 2025 — three and a half years of no deal and no war — the dollar rose 43% a year.

Two things differ today: UN sanctions are back, and money growth has accelerated. Since late September 2025 the run rate has been 88% a year. Something between the two, nearer the recent figure, is the realistic expectation:

• 3 months: 200,000–220,000 toman
• 6 months: 220,000–250,000 toman
• 12 months: 260,000–320,000 toman

This scenario is not calm. It is 50–70% annual erosion — just without the headlines.

6. Scenario C — no war, with negotiations

Here the data speaks most clearly.

Three times in the last three years our archive shows the market reacting hard to a diplomatic opening:

When	Move	Over
Mar 2023	58,493 → 46,792	−20% in two weeks
Apr 2025	105,555 → 81,975	−22% in two weeks
Jun 2026	181,390 → 153,500	−15% in one month

Three independent events, three times the same magnitude: a 12–22% discount, delivered within two weeks. That is the "peace premium" in this market, and it is remarkably consistent.

So if credible negotiations begin:

• Initial reaction (2–6 weeks): 155,000–170,000 toman
• Then the negotiating-period pattern takes over — roughly 5% a year in nominal terms
• 12 months: 165,000–195,000 toman — approximately where we stand today

Which is the most important sentence here: the best available scenario is not a cheap dollar, it is a stopped one. In the best case, twelve months from now the dollar sits about where it is now — which, against domestic inflation, is a very large real appreciation for the rial.

7. What to actually watch

Given the above, the indicators that carry real information are these — and none of them is a military headline:

1. Oil export volumes and repatriated revenue. The master variable. If this holds, war headlines do not stick.
2. The Tether premium over banknote dollars. Today it is essentially nil (~0.2%). If Tether moves to a meaningful premium, the banknote channel has tightened and capital flight has begun.
3. The gold-coin bubble. About 3% today, down from 8–11% last autumn. A low bubble means retail panic is absent.
4. The gap between the exchange centre rate and the free market. The wider it opens, the greater the pressure.
5. Money supply growth. The long-run engine.

Worth noting today: although the rate sits at an all-time high, none of the market-stress gauges is flashing red. Tether is at par, the coin bubble has deflated, dirham arbitrage is closed. That is not the picture of a panic. It is the picture of a steady monetary grind.

8. An honest caveat

These numbers are not forecasts; they are scenario ranges. What we did was measure how much each political condition moved the rate in the past, and apply that pattern to today's starting point.

Iran's currency market can move for reasons that appear in no table: a domestic decision, a budget shock, a shift in central bank policy. The further out the horizon, the wider the range.

And to be explicit: this is not investment advice. We record and analyse rates; we do not tell anyone what to buy or sell.

If one sentence survives from this piece, let it be this: over a twelve-month horizon, the thing that matters most is not politics — it is money supply growth. Politics decides whether we sit above that line or below it. The line itself runs at about fifty percent a year.

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Rates in this article are the free-market sell price recorded by Dolarchand. The full archive, with weekly export, is available on the price archive page.