Iran seeks to sell off oil in China before Trump’s return

Unrest in Iran's historic heart of commerce reflects the bleak outlook of the country as it faces dire economic straits. In 1979, protests in the bazaar heralded the onset of the Islamic Revolution which toppled Iran's monarch.

The strike, which began with shoe sellers in the 15th Khordad area, quickly spread to other sectors.

Videos shared with Iran International show merchants in the bazaar chanting “Don’t be afraid, close up,” and “Brave merchants, support, support".

A fabric merchant who joined the protest cited the impact of surging raw material costs, exacerbated by the devaluation of Iran’s currency.

“With the dollar now above 810,000 rials, our expenses have skyrocketed,” the merchant said. “Many workshops have shut down, and even those still running are struggling to sell goods in such a sluggish market.”

The protests soon expanded to key commercial hubs, including Abbasabad Market and Baghe Sepahsalar, known for fabric and shoe vendors.

Hamidreza Rastgar, head of Tehran’s Chamber of Guilds, acknowledged the discontent among manufacturers.

"Producers fear that items priced at these exchange rates will simply be out of reach for most consumers,” he said.

The Iranian rial’s sharp depreciation has had ripple effects across the economy. For merchants, it has created an untenable mix of higher costs and reduced consumer demand as at least one third of Iran is now living below the poverty line.

Security forces were deployed to control the demonstrations and gatherings appeared to have subsided by the end of the day.

There were no immediate reports of violence, but the heavy presence of law enforcement forces highlighted the Islamic Republic's sensitivity to unrest in this economically vital area.

Iran's economy is in its worst state since the founding of the Islamic Republic in 1979, with US-led sanctions over its nuclear program, support for militant groups and arms transfers for Russia's war on Ukraine squeezing the country.

“Several power plants are out of operation, and some industries have shut down. We faced power issues in the summer, and now in winter, we are dealing with both electricity and gas shortages,” said Ali-Asghar Ahaniha in an interview with the Revolutionary Guards-affiliated Tasnim on Saturday.

The energy crisis, marked by widespread electricity shortages and gas deficits, has disrupted industries across the country. Aging infrastructure, international sanctions, and poor management have compounded the problem, leading to the shutdown of approximately 80 power plants.

During the winter, Iran faces a daily shortfall of at least 260 million cubic meters of gas, further straining the electricity supply.

Iran has vast oil and gas reserves, much of which it cannot tap due to US-led sanctions which stall investment and technology improvement.

Ahaniha highlighted the strain caused by the crisis, noting employers are under immense pressure during the year-end period due to bonuses and additional costs.

“In a year dubbed the 'Year of Production Leap,' the lifeline of production and industry must be preserved. When the wheels of industry turn, employment and people's income flourish,” he said, criticizing the ministry of energy for prioritizing residential consumption over industrial needs.

The crisis has caused significant losses in industrial regions, where power cuts have resulted in damages amounting to hundreds of billions of rials. Ahaniha also criticized recent electricity and gas price hikes, arguing that industries have filed complaints against the ministry of energy, saying the increases were unlawful.

Iran’s electricity shortage was estimated at 14,000 megawatts during the summer. Heavy state subsidies have encouraged inefficient energy consumption, while geopolitical tensions and sanctions have hindered infrastructure investments.

“In recent months, the surge in both the number and variety of major challenges has intensified, pushing the situation beyond mere concern. Issues that were previously warned about as future risks have now become reality, exposing their full impact and severity,” Massoud Nili, professor of economics in Tehran, warned on social media.

Thousands of social media posts and numerous media reports from Tehran reflect a growing sense of decline and instability gripping the country. Multiple economic crises, including severe energy shortages and a rapidly depreciating currency, have converged with significant regional setbacks. Among these is the recent ousting of Bashar al-Assad, a major blow to Tehran’s regional standing. After investing tens of billions of dollars to sustain Assad’s rule, the Islamist opposition seized the capital, Damascus, in a matter of days, underscoring the fragility of Iran’s regional influence.

Ali Rabiei, the president's social affairs advisor, has highlighted the pressing issue of "social fatigue" in a recent op-ed published by the newspaper Shargh. In his analysis, Rabiei examined the current challenges facing the country and criticized the approach taken by the government's opponents. He urged Masoud Pezeshkian to prioritize addressing this growing societal concern, emphasizing its critical role in shaping the nation’s future.

“Iran's society is grappling with profound exhaustion, with younger generations showing signs of rebellion against the status quo. Addressing this widespread social fatigue demands a comprehensive effort to rebuild the nation’s social fabric. While foreign investment may not be immediately necessary for this endeavor, it is undeniable that prolonged sanctions have significantly contributed to the prevailing sense of despair, leaving deep social and political scars,” Rabiei wrote.

The most visible symbol of the current crisis, apart from shortages of electricity, is the rapid decline of the rial. The Iranian currency stands at a historic low against major currencies, with the US dollar trading well-above 810,000 rials on Saturday. The battered currency has lost one-third of its value since early September, when Israeli attacks weakened Tehran’s main regional military arm, the Lebanese Hezbollah.

Islamic Republic's aging leader, Ali Khamenei, has been largely silent on the growing crises at home, focusing his public remarks on regional developments. On December 22, he denied that Tehran has regional proxies, while at the same time threatening Syria's new government with impending instability.

A Reformist figure, Ataollah Mohajerani, warned the government of the continuing influence of the military in politics in an article published on Saturday, drawing a parallel with India and Pakistan, arguing that Iran risks becoming another state where the armed forces dictate policy. He then urged President Pezeshkian and other officials to pay attention to people’s demands.

“The government must pay attention to the people, seeing them clearly and hearing their voices. Ignoring their concerns risks a day when the public responds with a forceful, bitter, and unmistakable message.”

President Masoud Pezeshkian announced in a meeting on Friday that the worst is over in electricity and gas shortages which have plagued the country for over a month.

“Forecasts indicated that the state of the network could have been much worse than it is today," Pezeshkian reassured the public, saying the power grid was now stable

But ordinary Iranians routinely plunged in the dark have seen no improvement.

Yet another power plant near the capital stopped producing electricity on Friday due to shortage of diesel fuel, which has largely replaced dwindling natural gas supplies during the high demand cold season.

Gas production, Iranian media reported is down by up to a third even as Iran holds the world’s second largest reserves. Diesel supplies too are limited.

Iran’s largest natural gas reserves are in the Persian Gulf, in a field shared with Qatar which is a successful producer.

However, the natural pressure of the gas field has been declining in the last four years and Iran does not have the necessary technology to adequately tap its economic crown jewel.

Western technology and financial sanctions in place and lack of money for investment make it unlikely that they ever will.

At the same time, the Iranian currency stood at a historic low against major currencies, with the US dollar trading well-above 800,000 rials late on Friday. The battered currency has lost one-third of its value since early September.

Since the ouster of its lifelong ally in Syria’s Assad dynasty earlier this month, the Islamic Republic has found itself on the backfoot not only at the domestic front with the energy crisis, but also in foreign policy.

Several politicians and high-level officials on Friday either tried to sound the alarm or blame internal and external enemies for the existing state of affairs.

“Today is a day for national unity and cohesion. Enemies have surrounded us from all sides, yet we fear nothing, for this is the trait of God's supporters," Chairman of the Expediency Council Ayatollah Sadeq Amoli Larijani said in a public gathering.

"Wise strategy and divine virtue dictate that we preserve divine values. Let us avoid words that lead to division.”

Mohammad-Hossein Safavi, a Friday Prayer Imam in northern Iran, lashed out at Jews and Israel as the root cause of the Islamic Republic's troubles.

“According to God's words in the Quran, the Jews are the most hostile beings and exert all their efforts to infiltrate Islamic societies,” he told his congregation.

Opponents of the Islamic Republic on social media are trying to divine when it will fall, similar to Bashar al-Assad in Syria.

Some give it just weeks, while others say it will not survive until the end of 2025. Their dire domestic situation and regional defeats are not lost on officials and clerics, who try to show strength or blame enemies.

The 150 workers were fired following demonstrations at the Tehran Refinery when workers protested four months of unpaid wages.

A source speaking to Iran International said they have now been blacklisted by the refinery, barring them from any future employment there.

The Ministry of Intelligence has reportedly pressured the welders, demanding they identify individuals who shared footage of the strike with the media, the source added.

Additionally, Etemad newspaper reported that 15 representatives of third-party contract workers in Iran's oil industry are also facing dismissal for advocating for improved wages and benefits for the estimated 120,000 workers they represent.

The representatives were referred to the supervisory body and have since been summoned for questioning. Two have already been formally dismissed, five are awaiting dismissal orders, and eight others are awaiting summons.

The contract workers have been demanding wage standardization and benefits comparable to employed workers, including shopping vouchers, loans, and access to recreational facilities, since 2022.

Thousands of them held multiple protests in 2022 and 2023 leading to summons and interrogations but failing to achieve any significant changes in their working conditions.

In November, they sent a letter to the National Iranian Drilling Company (NIDC) management and provincial officials, detailing what they called insulting treatment and requests for unjustified commitments by security personnel in response to their protests.

The workers' representatives told Etemad that the Ministry of Oil has not provided any legal justification for criminalizing the protests.

While dismissals of protesting workers began under former President Ebrahim Raisi, the latest dismissal order was issued under President Masoud Pezeshkian, shortly after a new secretary was appointed to the selection board.

The suppression of labor protests in some private and contracting workshops has been a trend since the 2010s, intensifying in the early 2020s.

Since the uprising of 2022, the government has become even more tough in its reactions to protests, with laborers across a variety of sectors facing dismissal or even legal action for industrial action.

Workers have faced various repercussions including layoffs, wage cuts, restrictions on leave and overtime, fabricated legal cases, prosecution for disturbing public order, demotions, and workplace bans.