Israeli airstrikes targeting Iranian steel plants have disrupted key sectors of Iran’s economy, impacting both military capabilities and civilian livelihoods, according to officials and experts familiar with the situation. The strikes, which took place in late March, focused on Mobarakeh Steel near Isfahan, one of Iran’s largest steel producers, and another facility in the southwest of the country.
Israeli Prime Minister Benjamin Netanyahu has stated that these attacks have significantly reduced Iran’s steel production capacity and cut off financial resources linked to the Islamic Revolutionary Guard Corps (IRGC), a powerful security force integral to the Iranian government’s control. According to Netanyahu, the strikes aim to curtail Iran’s ability to manufacture weapons and weaken revenue streams for the regime.
Mobarakeh Steel is a complex example of the blurred lines between Iran’s civilian economy and military enterprises. While the firm is a major employer with tens of thousands of workers and plays a critical role in domestic manufacturing, portions of its ownership and profits are tied to entities associated with the IRGC and the Basij militia, an IRGC-affiliated paramilitary group. The U.S. Treasury has identified investments linked to Mobarakeh as funding sources for these groups. Reports also suggest that some of the company’s shareholders are controlled indirectly by Iran’s supreme leader, though corporate structures in Iran often obscure direct links.
The strikes have had a pronounced impact on workers and the local economy. Reports indicate that weeks of shutdowns at the Isfahan plant left more than 20,000 employees idle, with some accounts suggesting only a small fraction had returned to work as of early May. The interruption has also impacted downstream industries reliant on steel supplies. Former employees interviewed described Mobarakeh as a pillar of the local community and a coveted employer that supported social programs and infrastructure projects in its region.
Experts and analysts note that the steel produced by Mobarakeh may not be directly used in missile production but suggest it could be involved in manufacturing transporter-launcher vehicles and other military hardware. The targeting of industrial facilities linked to military financing raises complex legal questions under international law, which generally prohibits attacks on civilian infrastructure unless the site makes an effective contribution to military action and the attack offers clear military advantage. Some legal scholars argue that generating revenues for military groups alone does not justify military strikes on civilian facilities.
The broader geopolitical context includes ongoing tensions between the United States and Iran, whose recent negotiations over the nuclear program have oscillated amid episodes of violence. The U.S. has recently carried out strikes on infrastructure such as a railway bridge in Iran’s northeast, described by U.S. Central Command as logistics hubs for weapons transport. The future of peaceful engagement remains uncertain following President Donald Trump’s statement declaring the temporary cease-fire over.
Iranian officials and parliamentarians have criticized the privatization and management of Mobarakeh, describing its ownership as opaque and intertwined with state-controlled interests, including the IRGC and religious foundations. The Basij militia’s involvement, particularly through investment firms holding significant shares, links the company to forces responsible for suppressing domestic unrest amid recent national protests over economic conditions.
Former employees and analysts expressed divergent views on responsibility for the strikes. Some attribute blame to the IRGC for entangling civilian assets in military ventures, while others see the attacks as part of a broader U.S.-Israeli effort to weaken Iran’s civilian infrastructure and economy. A senior U.S. military official, speaking anonymously, stated awareness of no direct U.S. involvement in the Israeli strikes on the steel facilities.
Efforts are reportedly underway to repair the damaged plants, with Iranian officials asserting progress in rebuilding critical infrastructure. However, the impact on workers, pension funds, and the wider Iranian economy is expected to persist, complicating both domestic stability and the prospects for economic recovery amid continuing regional tensions.