Industrial production in Iran faces a crisis, as manufacturers report that frequent power outages have often halted operations. This is particularly striking given that Iran has one of the world's largest oil and gas reserves.
The country face severe power shortages every summer and gas shortages every winter. Each year, policymakers opt to cut industrial power to keep household lights on. The shortfall reaches up to 14,000 MW, or 20%, during the summer.
Iran International reported last month that due to high summer temperatures, Iran faces a huge energy deficit, but the situation has not improved since early July.
Industrialists argue that it is truly perplexing for energy policymakers to choose the easiest route of cutting power to factories and steel plants rather than developing infrastructure or purchasing electricity to meet the country’s shortfall. They question how policymakers plan to compensate for the lost production, cover the insurance and costs incurred by power outages, and address customer commitments and the financial losses due to production delays.
Hamidreza Ghaznavi, Secretary-General of the Entrepreneurs Association, reacting to the frequent power cuts, told Khabar Online on Thursday, "The Ministry of Industry, Mine, and Trade (Ministry of IMT) must resolve the power cuts affecting industries. However, there is no vocal support for the industrial sector."
Varied impact on different sectors
In response to how much current capacity is affected by power cuts, Ghaznavi noted, "Some industries have been shut down for two months. Others operate only at night, and some alternate between two weeks of operation and two weeks of shutdown." He explained that while different industries face varying challenges, the steel and textile sectors are particularly hard-hit. He stressed that although all manufacturers are struggling, these sectors are in worse conditions.
Policy failures and economic consequences
Ghaznavi criticized the Ministry of IMT for not sufficiently protecting production. He noted that reducing electricity consumption in the public sector could increase the supply to the industrial sector, but this approach has not been effectively implemented. He pointed out that there are many ways to reduce power consumption, such as implementing penalties, but these measures are not being enforced to prevent the deteriorating conditions in factories.
To prioritize residential energy needs, the government has imposed limits on energy supplies to the industrial sector, causing annual losses estimated at $6-8 billion.
Official statistics reveal that 13% of Iran's generated electricity is lost during transmission and distribution due to an outdated grid. Experts belive losses reach 30%. This loss is equivalent to the total electricity consumption of the steel industry, which generates export revenues. Moreover, many of Iran's power plants are inefficient gas or steam types. Rather than modernizing the grid or converting to more efficient combined-cycle plants, the government has opted for measures like adjusting office hours or imposing restrictions on industrial power supply.
Dire outlook for Iranian economy
Ghaznavi emphasized the dire situation, urging the Ministry of IMT to take more action on power cuts and support investments. He noted that a resolution was passed to encourage factories to adopt solar power and clean energy, but this has yet to be implemented. There has been little support for factories to transition to solar energy, and no immediate actions have been taken to facilitate this shift.
Despite the recurring power cuts to industries, the CEO of the Iran Power Generation, Transmission, and Distribution Company recently announced that the country’s electricity consumption demand reached an astonishing 79,872 megawatts, a record-breaking figure in Iran's electricity industry history. According to Mostafa Rajabi Mashhadi, only 128 megawatts shy of breaking the 80,000 megawatt mark, the figures are astonishing. This level of demand is equivalent to the electricity consumption of both Egypt and Spain combined.
Instead of addressing the fundamental energy imbalance, authorities have resorted to cutting off electricity and gas to industries—a short-term solution that fails to resolve the country's energy deficit. Ghaznavi stressed that people need jobs for their livelihoods, and factories need to operate to meet market demands. If prices rise due to shortages, those who have had reliable power might find themselves unable to afford necessities, he added.
The group led by Ibrahim Al-Hefl (الهِفل), from the ruling family of the Al Aqeedat tribe, which has received military support and training from Iran, carried out a sudden and coordinated attack against the SDF in areas like Abu Hamam in Al-Shaitat and Dhiban, resulting in casualties.
Iran’s support for this group includes advanced equipment and intensive training in secret bases, reflecting Tehran’s intention to strengthen its regional influence. At the same time, Deir Ezzor is experiencing widespread resentment toward the Syrian regime, Iranian, and Russian forces, prompting the local population to support the SDF despite earlier reservations.
The recent developments highlight the complexities of the Syrian conflict and the increasing involvement of external powers exacerbating humanitarian and political crises. The situation remains unstable, with the potential for either escalating violence.
The Role of Iran and Tribal Groups
Among these groups, Ibrahim Al-Hefl's faction stands out, having received substantial military support from Iran, including not only military training but also advanced equipment, enabling the group to carry out sophisticated and coordinated operations against the Syrian Democratic Forces (SDF).
These developments worsen the region's security, intensifying clashes between Al-Hefl's group and the SDF and destabilizing previously safe civilian areas. Iran's growing influence through these groups is also alarming some Arab countries, particularly Saudi Arabia, which sees this as a threat to its strategic and security interests. This situation underscores the need for urgent diplomatic solutions to manage rising tensions and secure long-term regional stability.
Iran's Strategic Preparations and Timing
Iran has long recognized the importance of local Sunni Arab tribes in Syria to bolster its influence in the region. Consequently, it has worked to attract and direct these tribes to achieve its goals. Iran's cultivation of loyalty within this tribe has further complicated the Syrian conflict and provided Tehran with a stronger foothold in the region.
The Iranian Revolutionary Guard Corps (IRGC), known for its advanced training capabilities, has provided intensive training to Al-Hefl's group. This training covered unconventional warfare tactics, the use of advanced weapons, and espionage and reconnaissance techniques. Members of the tribe were trained in secret bases within Syria and sometimes in Iran, making them an effective combat force capable of conducting complex operations against Iran's adversaries in Syria, local sources claimed.
IRGC and its proxies occupy the western side of the Euphrates River, while the SDF and US forces are stationed within a few kilometers of its eastern banks. Al-Helf’s group are therefore very close to US forces and pose a serious danger.
Iran's support for Al-Hefl's group is part of a broader strategy aimed at enhancing its influence in that part of Syria and countering its opponents. By supporting these groups, Iran aims to pressure US forces and undermine their efforts. Furthermore, Iran seeks to use these groups as leverage in future negotiations, particularly concerning its conflict with Israel. The military operations conducted by these groups also serve to distract and strain the resources of Iran's adversaries.
The Attack on SDF and Iran's Role
The attack on the SDF can be described as sudden and well-coordinated. It began in the morning, targeting SDF positions in areas such as Abu Hamam in Shu'aytat, Al-Dhiban (Al-Hefl's hometown), and the city of Al-Busayrah, all of which are located east of the Euphrates River. Al-Hefl's group used advanced tactics and weapons. The attack was a clear message from Iran and its allies, demonstrating their ability to deliver significant blows at any time and place and their willingness to use force to achieve their objectives.
The Role of Ibrahim Al-Hefl and Syrian Regime Involvement
Ibrahim Al-Hefl, who played a prominent role in leading the tribe, has been absent from the current scene for unknown reasons, raising many questions. He was considered an influential figure in the region and had a significant impact on the tribe's military role. His absence has led to speculation as to whether it is due to internal tribal pressures or external intervention.
The Syrian regime's role in supporting and training Al-Hefl's group cannot be overlooked. Figures like Hashim Al-Sattam, a security officer with the regime, played a significant role in funding and providing logistical and training support to the group and others. Through these alliances, the Syrian regime aims to bolster its influence and exploit the ongoing conflict to achieve political and military gains. The collaboration between the Syrian regime and Iran in this context reflects the intertwined interests and objectives of both parties in confronting their common adversaries.
IRGC's strategy of planting cells
The IRGC's strategy in the Middle East is one of the key factors shaping the current developments of the conflict in Syria. This strategy focuses on enhancing Iranian influence by supporting militias and supplying them with weapons and training, thereby increasing their capability to execute Iran's regional objectives. These weapons include anti-aircraft weapons and RPGs, enabling militias to conduct effective offensive operations against the SDF and the international coalition.
Iran targets the international coalition through this combination, aiming to undermine the operations of the US-led coalition in the region. Part of this strategy involves equipping militias to target coalition helicopters, requiring special equipment and advanced training. Iran supplies militias with guided missiles and anti-aircraft systems, reflecting its intent to weaken the coalition's military presence in Syria and enhance its capacity to conduct sophisticated offensive operations.
Iran's Agendas
Hashim Al-Sattam's role in Al-Dhiban serves as an indicator of the increasing role played by Iran-supported groups in areas previously under opposition control. This indicates the subjugation of these areas to the Iranian regime, enhancing its ability to impose control and achieve its strategic objectives in the region. This presence also reflects how Iran uses local militias as tools to achieve its regional interests. For over a year, Iran has been preparing cells in Syria to attack the SDF.
In addition to supporting Syrian militias, Iran also equips and arms Iraqi cells operating under tribal groupings. These cells are used to achieve the same strategic goals in the region, as Iran seeks to expand its influence through multiple local alliances. Equipping these cells includes providing them with advanced weapons and special training, enhancing their capability to conduct offensive operations against coalition forces and other targets in the region.