Netanyahu says Khamenei fears Iranian people more than Israel

The cabinet's directive, dated November 10, ratified the implementation of an article in the current Iranian year's budget (started March 20), which addresses subsidy reforms.

According to this regulation, licensed private companies are now authorized by the Ministry of Oil to import and distribute premium (super) gasoline at non-subsidized prices, outside the government's network of gas stations.

The Iranian government offers one of the cheapest gasolines in the world, at less than 10 US cents per gallon, according to a policy of subsidizing essential commodities for the population. However, these subsidies including food, natural gas and electricity costs the government more than $50 billion annually.

Although the decree does not explicitly mention subsidized gasoline, domestic media have interpreted it as a sign of impending fuel price increases.

The estimated price for this imported gasoline is around 800,000 rials per liter (around $1.20). President Masoud Pezeshkian's administration continues to deny having any plans to reduce subsidies for gasoline, while seemingly advancing it in practice. Thus far, the government has approved an 11-fold increase in aviation fuel prices and anticipates substantial revenue growth from fuel sales.

There is no clear information on the quality of the premium gasoline Iran plans to allow for import. However, Iran has a longstanding practice of importing high-quality gasoline and diluting it for profit. In April 2023, Hossein Aghayan, a former director in the National Iranian Oil Refining and Distribution Company (NIORDC), said, "Previously, we imported super or premium gasoline and mixed it with light naphtha, and there was no issue. But if we aim to supply high-quality gasoline, we must import it." As a result, the gasoline sold by the government has low Octane and is considered sub-standard.

A few hours after the document was shared with the media, government spokesperson Fatemeh Mohajerani faced a wave of questions from journalists about a possible gasoline price increase.

She emphasized, “There is no increase in the price of gasoline in next year’s budget.”

However, Mohajerani acknowledged that the government must import gasoline to address shortages.

Earlier this month, a spokesperson for the Planning and Budget Organization noted, “Setting the prices of petroleum products requires decision-making at the highest levels of national management, and any adjustment or pricing must be thoroughly discussed across various levels.”

For most Iranians, who earn about $200 per month, a large increase could push an already struggling population to the brink. Violent protests shook Iran in November 2019, when the government suddenly tripled gasoline prices. But the government is also cash-strapped because of US sanctions that have led to limited export of crude oil.

Historically, fuel price increases in Iran have happened outside of budget legislation, as in November 2019 when gasoline prices rose with the Supreme Leader’s backing of a decision by the Coordination Council of the Three Branches, bypassing parliamentary oversight.

This new decree, allowing private companies to import premium gasoline and supply it outside the usual distribution network, acts as an implementation regulation of the budget law. However, neither the import of premium gasoline nor its distribution outside the standard network was specified in this year’s budget. Instead, the government is advancing this policy through a special directive.

Under the administration of Hassan Rouhani, Iran issued its first license to supply fuel outside the traditional distribution network. Following this, the private sector entered the market with fuel tankers, referred to as "mobile stations," which delivered fuel directly to consumers upon request. Some of the mobile stations were also stationed in designated urban areas, where they sold gasoline on-site.

On Monday, Trump announced Representative Elise Stefanik of New York is to become United Nations ambassador, Representative Mike Waltz of Florida will take over as national security advisor, and it is expected that Senator Marco Rubio of Florida will become secretary of State.

Speaking to Iran International, Richard Pater, Israel director of the think tank, The Britain Israel Communications and Research Centre (BICOM), said it was good news for Israel.

“The initial appointments and the early anticipation around the second Trump administration bode well and signal good news for US allies in the region.

“From a security perspective they will build on regional alliances to defend against malign Iranian aggression. Furthermore, there is renewed hope that these alliances can be solidified and that the Abraham Accords can be expanded.”

Stefanik has made no secret of her stance on Iran. In May, addressing the Israeli parliament, she said: “The US is ready for a return to President Trump’s maximum pressure campaign against Iran.”

On Saturday, she reiterated her Iran stance, slamming the Biden administration’s approach which over the last three years has seen Iran earn record amounts of oil revenue in the face of sanctions, and successfully earned billions in what human rights groups call "hostage taking."

Last year, five US citizens were released from prison in Iran for $6bn in released frozen funds, just before Hamas, Iran's ally, attacked Israel on October 7, 2023.

“For too long, our enemies have been emboldened by the weakness of the Biden-Harris Administration,” Stefanik wrote on Saturday on X.

Signaling a strong approach to the Palestinian topic, she also wrote on Sunday that her target would encompass cracking down on the Palestinian leadership alongside the Gaza war.

“The Biden-Harris Administration knows that the Palestinian Authority is continuing their “pay-to-slay” policies and lining the pockets of terrorists who kill Israelis,” she wrote, the PA offering money to those who kill Israelis, and pay their families if they are killed in the line of ‘jihad’ or are imprisoned.

“Joe Biden and Kamala Harris are choosing to ignore the law and waiving mandatory terrorism sanctions on the Palestinian government. Thankfully the Biden-Harris Administration’s rewarding of terrorists at the expense of our great ally Israel is coming to an end,” she wrote on Sunday.

Khaled Abu Toameh, an analyst at the Jerusalem Center for Security and Foreign Affairs, told Iran International that while the debate about the meddling of Iran in Palestinian affairs troubles the Palestinian leadership, especially in the West Bank, it remains a taboo topic on the streets. Iran supports not only Hamas and Palestinian Islamic Jihad which are both in Gaza and the West Bank, but also multiple battalions in the West Bank.

“Palestinians don’t openly talk about Iran, because you’ll be seen as a traitor and against the resistance,” he told Iran International.

“Palestinian officials are very worried about what Iran does in terms of supporting terror in the West Bank and Gaza, Hamas, Islamic Jihad, the battalions in the West Bank, but when you ask them to speak publicly about it they don’t want to.”

In addition to the war in Gaza, sparked by the October 7 Hamas attacks, the West Bank is fraught with conflict between Iran-backed groups and the Israeli military.

“I’m sure the Palestinian leadership are looking at Trump to resolve this, knowing that these groups are only serving Iran’s agenda, but on the street, you don’t hear this debate,” he added.

Mike Waltz has been a vocal critic of the Islamic Republic, condemning the Biden administration for creating an environment where Iran faces little consequence for its aggressive actions abroad, including attempts by its agents to target Donald Trump and former aides. Last year, the US labeled Iran the world’s leading state sponsor of terrorism.

Waltz told Fox News last Thursday that Trump’s return means “maximum pressure” for the Islamic Republic, and that he poses an “existential threat” to the ruling of supreme leader, Ali Khamenei.

“Why has Iran been trying to kill President Trump? Because they think they can get away with it,” he wrote on X last Thursday. “The Biden administration’s weakness over the last 4 years has emboldened our adversaries THAT MUCH. We need strong assurances from Biden RIGHT NOW to deter these Iranian threats AND he needs to provide military security to protect President Trump. This cannot wait.”

A ceasefire in Lebanon forcing Hezbollah to make concessions, would be in Iran’s interest, says Moty Cristal, a former Israeli negotiator. "Time is working against Iran because of the risk of attack so if I was Iran I would be looking to finalise a deal before Trump takes office. Iran is much weaker and more vulnerable right now, it has less air defences since the Israel attack and politically it’s much less credible," he told Iran International.

If before Trump comes, there is a deal with Hezbollah, the hawkish approach will not be the same. "It’s much harder to restart an aggressive approach if that’s in place. If there is no ceasefire in Lebanon until January, that opens more military options for Israel and the US against Iran and Hezbollah," he added.

If a ceasefire is put in place, Trump can execute the hawkish mindset and policies through additional sanctions or through something that will similarly weaken Iran, bringing Saudi Arabia into the 2020 Trump-brokered Abraham Accords with Israel which saw relations normalized with countries such as the United Arab Emirates and Bahrain.

"From Israel’s perspective, it might be better negotiation wise to wait," Cristal added. "The US negotiators are talking now about a stronger UN Resolution 1701, but if we get to February, Israel and the region might even get Resolution 1559 which is a complete disarmament of Hezbollah, not only pushing them north. That’s much better for Israel and the region."

Resolution 1701 from 2006 required Hezbollah and armed militias in southern Lebanon to retreat behind specified lines, in addition to disarming. Neither of which has since happened.

A government directive mandates daily electricity cuts of at least two to three hours in numerous regions and provinces. President Masoud Pezeshkian’s administration has attributed the shutdown of three power plants—in Isfahan, Arak, and Karaj—to an acute natural gas shortage and pollution concerns from burning mazut (fuel oil) as a substitute. However, Ministry of Energy data reveals that the primary cause is a shortage of all fuel types, including mazut, diesel, and natural gas.

Thermal power plants in Iran account for 95% of the country’s electricity generation and require a daily supply of 280 million cubic meters of gas or an equivalent of 225 million liters of mazut and diesel.

Until two years ago, Iran experienced gas shortages primarily in winter, but now it faces an increasing gas deficit in all seasons. In spring and summer of this year, gas accounted for 86% of the fuel used in power plants, a decrease from 94% during the same period last year.

Ministry of Energy data shows that despite earlier increases this year of 50% in mazut supply and 26% in diesel supply to power plants, liquid fuel reserves dropped to 42% by early autumn. This decline is due to a 100% surge in mazut consumption and an 80% rise in diesel use at power plants since the start of the Iranian calendar year on March 21.

Iranian mazut contains 3.5% sulfur, seven times the international standard for marine fuel. The quality and sulfur content of diesel in Iran also exceed Euro 4 standards.

The Iranian Parliament Research Center reports that Iran faced a daily gas shortage of 150 million cubic meters during the spring and summer, a figure that could rise to 300 million cubic meters per day this winter.

Iran holds the world’s second-largest gas reserves after Russia and ranks as the fourth-largest producer. However, the lack of renewable energy development, extensive energy waste, particularly in gas, and the low efficiency of power plants have led the country into a gas deficit.

Meanwhile, data from BP shows that while Iran’s annual gas production growth exceeded 5% over the past decade, it has slowed to 2% in the past three years. Last year, Iran produced about 260 billion cubic meters of gas, with 12 billion cubic meters exported to Turkey and Iraq.

Iran’s mazut situation

Reports from tanker tracking companies also indicate a sharp decline in Iran's mazut exports, highlighting the surge in domestic consumption of this highly polluting fuel.

Until a few years ago, Iran was exporting an average of 400,000 barrels of mazut daily. However, this figure dropped to 220,000 barrels last year.

The main customers for Iranian mazut are China and the UAE. Calculations by Iran International, citing data from Vortexa, Kpler, and the United Against Nuclear Iran(UANI), an advocacy group, indicate that during the first 10 months of this year, Iran exported an average of 70,000 barrels of mazut daily to China and 60,000 barrels to the UAE.

In other words, Iran's mazut exports have halved compared to last year and dropped to a third of their level in 2021. Data from the Ministry of Energy shows that Iran consumed 8 billion liters of mazut in power plants last year, in addition to double this amount of diesel in power generation sector.

Iran's gas exports

Data from BP reveals that Iran exported 12 billion cubic meters of gas to Turkey and Iraq last year, consistent with official data from both Turkey and Iran. While no report on Iran’s total gas exports for the current year is yet available, official data from Turkey indicates that it imported 4.2 billion cubic meters of gas from Iran in the first eight months of this year—an increase of 10.5% compared to the same period last year.

In its budget draft for the coming year, the Iranian government has forecasted gas exports of 16 billion cubic meters, valued at $5.2 billion. If Iran were to consume this amount of gas domestically in power plants instead of exporting it, it would reduce the need for 16 billion liters of mazut and diesel—equivalent to approximately $8 billion in international market value.

In simple terms, redirecting exportable gas to domestic power plants could reduce pollution and save Iran an additional $3 billion. However, Iran continues to prioritize gas exports, likely to sustain Iraq and Turkey's dependency or to secure its export markets. Recently, Iran also filed a lawsuit against Pakistan in the International Court of Justice over delayed gas imports.

According to an existing contract, Pakistan was to begin purchasing 7 billion cubic meters of Iranian gas annually starting in 2015. However, it claims that concerns over U.S. sanctions have prevented it from moving forward with the imports.

Brigadier General Zvika Haimovich said he can predict what’s next by examining the history of strikes between Iran and Israel.

One thing is certain: the next round will escalate further, with more missiles and greater complexity—a safe assumption, he added.

“They are never going back. The volume becomes much higher than before. Just look at the last the two events with Iran, April 14th and October 1st. April 14th there were 110 ballistic missiles. In October we found ourselves with almost 200 missiles, double that,” said Haimovich.

He referred to this as the formula based on his background in the Israeli military. He held a senior command in 2018 of the Juniper-Cobra joint exercise between Israeli and US Forces.

Patrick Clawson, a Research Counselor at The Washington Institute, told Iran International neither Israel nor Iran wants a full-scale war, but each is determined to show it can inflict sufficient damage to cause on side to pause.

But in doing that, Iran's supreme leader Ayatollah Ali Khamenei threatened Israel and the US with “a crushing response” over Israel’s strikes in Iran.

“The enemies, whether the Zionist regime or the United States of America, will definitely receive a crushing response to what they are doing to Iran and the Iranian nation and to the resistance front," Khamenei said on November 2.

While things could only get worse, Haimovich believes at some point, this will end, but the million-dollar question is what will stop one side.

“Somebody will stop somewhere in the future. The question is to what will force them to stop,” he lamented.

External pressure could be one factor.

The transition period over the next couple of months to incoming President Donald Trump will be crucial—a sensitive time for Israel and Iran, during which major decisions are unlikely, Haimovich said.

“For one side, it's very sensitive and the other side, it's a very dangerous time to take decisions.”

Israeli Prime Minister Benjamin Netanyahu announced on Sunday that he recently spoke three times with US President-elect Donald Trump, emphasizing that they share a common view on Iran, seeing “eye to eye on the Iranian threat.”

Beyond the US, other external factors in the Middle East could influence the duration and intensity of direct strikes between Iran and Israel.

Leaders from the Arab and Muslim world met in Riyadh on Monday for a summit focused on the conflicts in Gaza and Lebanon, with Iran and Trump on their minds.

Saudia Arabia had been on the verge of formalizing relations with Israel, but October 7 and the ensuing wars in Gaza and Lebanon negatively impacted that prospect. The Kingdom has recently found itself warming up to Tehran.

“We call on the international community to compel Israel to respect Iran’s sovereignty and not to attack its territory,” the Saudi King told those attending the summit.

Israel has several fronts to the war that has been raging for more than a year. The longer that goes on, the more complex it becomes and the more difficult to de-escalate, said Brigadier General Zvika Haimovich.

The former Commander of the Israeli Air Force told Iran International that all roads lead back to the Islamic Republic. "What does Israel have with the Houthis in Yemen or the militias in Iraq? Nothing."

He said Iran’s stated goal of destroying Israel is exactly why they have influence in Syria and Iraq and formed proxies just at the border with the Jewish State.

The dangerous tit for tat between the two foes is not sustainable but Israel may switch gears from other war fronts to focus their attention on Iran and its nuclear program, according to Haimovich.

Israel’s new defense minister Israel Katz has said Iran’s nuclear sites are more vulnerable than ever after Israel’s airstrikes on its air defense sites last month.

“Iran today is more exposed than ever to damage to its nuclear facilities. There is a possibility to achieve the most important goal, to thwart and remove the threat of annihilation from hanging over the State of Israel,” said Katz.

According to the statement, the strikes targeted two specific locations in Syria and were a response to multiple attacks on US personnel within the previous 24 hours.

The US has periodically launched strikes against Iranian-linked targets in Iraq and Syria, after they launch arracks against US targets in Syria or Iraq. Earlier this year in February, the US carried out airstrikes on more than 85 sites connected to Iran’s Revolutionary Guard (IRGC) and its allied militias, following a fatal attack on US forces. After the US strike, attacks by Iran-backed forces that had surged to 200 incidents since October 2023, stopped for a long period.

“These strikes will reduce the ability of Iranian-backed groups to plan and carry out future attacks on U.S. and Coalition forces,” the US military stated regarding the recent action.

Currently, the US has approximately 900 troops stationed in Syria and an additional 2,500 in Iraq, primarily tasked with advising and supporting local forces to prevent a resurgence of ISIS, which once held large territories across both countries before being defeated.

Following the outbreak of the Israel-Hamas conflict on October 7, the US has deployed warships and fighter jets to the region as a deterrent to Iran and its affiliated groups. Additionally, US forces have assisted in intercepting projectiles launched by Iran toward Israel this year. Tehran has also threatened to launch a third ballistic missile attack against Israel in retaliation for an Israeli air strike last month targeting military sites within Iran.