Iran

Energy Crisis Threatens Social Unrest in Iran

Iranian authorities impose early closures of shopping malls in Tehran due to energy shortages, warning violators of strict penalties.


Iran is facing an unprecedented energy crisis, which has prompted severe restrictions on shopping malls, schools, and public buildings across nearly half of the provinces. However, the early closures announced Monday night currently only apply to the capital, Tehran. This crisis casts a heavy shadow over the social landscape, fueling tensions that could escalate into public protests amid worsening living conditions for most Iranians.

Iran previously experienced social protests in 2018 when merchants in Tehran’s famed bazaar went on strike due to the collapse of the local currency and restrictions on imports and foreign currencies.

Starting Tuesday, shopping centers in Tehran must close two hours earlier than usual to reduce energy consumption amid a worsening shortage exacerbated by a cold wave.

Hamid Reza Rastegar, head of Tehran’s Chamber of Commerce, warned on state television that “if shopping centers do not comply with this decision, they will be closed, and their gas and electricity supplies will be cut off.”

The measure requires shopping centers to shut at 8:00 PM (4:30 PM GMT) instead of 10:00 PM (6:30 PM GMT), according to the ISNA news agency. The duration of these restrictions, which only apply to Tehran, has not been specified.

While the immediate financial impact of early closures may be limited, a prolonged crisis could significantly affect revenues, prompting authorities to extend energy-saving measures to factories, similar to recent scenarios in Turkey that adversely affected key sectors.

Despite possessing some of the world’s largest oil and gas reserves, Iran’s electricity network suffers from underinvestment in infrastructure, largely due to Western sanctions.

Authorities have been forced to ration electricity in recent weeks due to gas and fuel shortages needed to power its plants. Schools and public buildings remained closed for the third consecutive day Tuesday in Tehran and more than half of Iran’s 31 provinces, according to the IRNA news agency.

These developments recall the Iranian currency collapse years ago when the rial hit record lows, negatively impacting the general economy and sparking protests, particularly in Tehran’s bazaar, which were harshly suppressed by the authorities.

Domestic pressures have mounted due to Western sanctions and Iran’s involvement in costly foreign conflicts, such as in Syria. Tehran’s partial disengagement from its allies, including Syrian President Bashar al-Assad and Hezbollah, highlights a financial crisis forcing the regime to reassess its foreign funding.

The new energy crisis is likely to exacerbate social tensions. While the scale of the fallout remains uncertain, official and unofficial data indicate that any sudden crisis could deepen the already deteriorating economic and social situation.

Authorities are already bracing for renewed protests, similar to those following the death of Kurdish-Iranian Mahsa Amini after her arrest by the morality police. That incident nearly marked a turning point for the largest protest movement Iran has seen.

Iranians increasingly feel the economic crisis in their daily lives as the currency continues to collapse, affecting various sectors amid geopolitical tensions.

Any further escalation between Iran and Israel could worsen the struggling Iranian economy. Meanwhile, the upcoming inauguration of U.S. President Donald Trump, known for his hardline stance on Tehran, may lead to additional sanctions.

Iranian President Massoud Besheshtian and his economic team appear unable to resolve the mounting crises that threaten to ignite social unrest unless swift and practical solutions are found to halt the economic collapse.

Iran is betting on increasing oil production and exports despite Western sanctions on its primary revenue source. However, it is also bound by the OPEC+ production cap agreement, which includes 13 OPEC members led by Saudi Arabia and 10 non-OPEC producers led by Russia.

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