Iran’s two largest steel producers — Khuzestan Steel Company in southwestern Iran and Mobarakeh Steel Company in central Iran — have been forced to shut down entirely following multiple rounds of US-Israeli air strikes, according to statements from company officials. The closures mark a significant escalation in the economic dimension of the ongoing conflict, striking at a sector critical to Iran’s industrial base.
Full Production Halt
Mobarakeh Steel Company confirmed that its production lines “completely shut down following the high volume of attacks.” Khuzestan Steel’s deputy head of operations said restarting will take “at least six months and up to one year.”
Scale of the Damage
Mehran Pakbin, deputy head of operations at Khuzestan Steel Company, told Iranian state media that the facility sustained extensive damage across multiple production stages. He warned that restarting operations would require “at least six months and up to one year,” citing the complexity of steelmaking infrastructure and the need to source replacement equipment under sanctions conditions.
Mobarakeh Steel Company, Iran’s largest flat steel producer, issued a separate statement confirming that production lines had “completely shut down following the high volume of attacks.” The company did not provide a timeline for resumption.
Israeli media outlets reported that the strikes on Iran’s industrial infrastructure were expected to cause billions of dollars in damage. Both steel plants have been linked by Israeli and Western intelligence assessments to the Islamic Revolutionary Guard Corps (IRGC), which maintains significant interests across Iran’s heavy industry sector.
Iran ranks as the 10th largest steel producer globally, according to the World Steel Association. The sector is a cornerstone of domestic construction, manufacturing, and export revenue — making these shutdowns a direct blow to the country’s economic capacity during wartime.
Diplomatic Fallout and Retaliatory Strikes
Iranian Foreign Minister Abbas Araghchi addressed the strikes in a public statement, framing them as part of a broader campaign against civilian and industrial infrastructure.
In response, the IRGC launched retaliatory strikes targeting US-linked steel and aluminium facilities in Gulf states. The Israeli military reported several new incoming missile attacks from Iran. The United Arab Emirates said its military “engaged with” 19 missiles and 26 drones launched from Iranian territory. The IRGC also claimed to have targeted an Amazon Web Services cloud computing centre in Bahrain, though the extent of damage has not been independently confirmed.
Broader Infrastructure Campaign
The steel plant shutdowns are part of a wider pattern of strikes against Iranian infrastructure. Iran’s health ministry confirmed that the Pasteur Institute — a major medical research centre in Tehran — was attacked on March 23. The Tofigh Daru pharmaceutical company, which manufactures anaesthetic and cancer treatment drugs, was also struck. The Israel Defense Forces claimed the facility was involved in transferring “chemical substances, including fentanyl, used for research and development of chemical weapons,” an allegation Iran has denied.
Internet Blackout Continues
Iran has been under a near-total internet blackout for 34 consecutive days. NetBlocks, the internet monitoring organisation, reports connectivity at approximately 1% of normal levels, severely limiting the flow of information both within and out of the country.
US President Donald Trump and Defense Secretary Pete Hegseth stated that the United States would bring Iran “back to the stone ages,” with Trump separately warning that the assault on infrastructure “hasn’t even started.” The State Department, however, reiterated that Trump remains “open to diplomacy.”
Calls for Negotiation
Former Iranian Foreign Minister Mohammad Javad Zarif has publicly called for Iran to “declare victory, make deal” — outlining what he described as a peace blueprint. The proposal has circulated among Iranian political circles but has not received an official endorsement from Supreme Leader Ayatollah Ali Khamenei’s office.
The competing signals — escalating strikes alongside stated openness to diplomacy — leave the trajectory of the conflict uncertain. What remains clear is that the destruction of Iran’s steel production capacity represents a long-term economic cost that will outlast any ceasefire.
Economic Impact at a Glance
| Indicator | Current Value | Change | Context |
|---|---|---|---|
| Brent Crude | $106.16/barrel | +~5% from Wed ($104.86) | Surpassed $116 earlier this week |
| Iran Steel Output | 0 (both plants offline) | -100% | Was 10th globally (WSA) |
| Estimated Damage | Billions (USD) | — | Per Israeli media reports |
| Internet Connectivity | ~1% of normal | — | 34-day blackout (NetBlocks) |
| Restart Timeline | 6–12 months | — | Khuzestan Steel estimate |
| UAE Intercepts | 19 missiles + 26 drones | — | From Iranian retaliatory launches |
Did You Know?
- Iran’s steel sector employed hundreds of thousands of workers across mining, smelting, and manufacturing — the shutdowns threaten livelihoods well beyond the plant walls.
- Mobarakeh Steel Company is the largest steel complex in the Middle East and North Africa, and one of the largest industrial flat steel producers in the world.
- Brent crude briefly topped $116/barrel earlier this week before retreating — the highest level since the initial weeks of Russia’s invasion of Ukraine in 2022.
- The IRGC’s retaliatory strikes on Gulf facilities mark one of the first times Iranian forces have directly targeted industrial infrastructure in allied Gulf states, a significant escalation in the regional dimension of the conflict.