Iran has been grappling with prolonged electricity interruptions driven by extensive shortages of natural gas. On Friday, the country’s main energy provider cautioned manufacturers that they should prepare for power cuts lasting possibly for an extended period, with the potential to inflict heavy financial losses. Government officials face a tough decision between cutting off fuel supplies to power facilities or sacrificing heating for households, and they have opted to reduce the former in an attempt to control public discontent.
On the economic front, investors found little solace as the Iranian rial sank to an unprecedented low of 770,000 to the dollar. Meanwhile, everyday citizens spent much of the previous week unsure whether schools would operate or if they could report to work, a circumstance that shows no signs of abating soon.
Wait, doesn’t Iran have tons of natural gas? Yes, and generous subsidies for consumers to boot, which means the overwhelming majority of Iranians depend on — and arguably overconsume — natural gas for home heating and cooking. But even though the Islamic Republic sits on the world’s second-largest reserves, sanctions and international isolation have left its infrastructure and technology woefully inadequate to supply its own needs.
Iranian energy firms routinely flare large volumes of natural gas released during oil production because they lack the technical capacity to capture it. Moreover, a significant share of the gas that does get collected is then shipped to Turkey and Iraq, generating much-needed revenue in hard currency.
The New York Times also reports that Israeli strikes against two pipelines back in February forced Tehran to tap into reserves it was unable to restore over the summer.
Will the crisis reach a boiling point? With temperatures plunging as low as -20 C in many parts of the country, cuts to gas for domestic heating could put lives at risk. We’re watching for unrest, but keep in mind that hundreds of Iranians lost their lives and thousands more were arrested and abused by regime forces in 2022 and 2023 during the protests over the killing of Mahsa Amini. As long as the regime is willing to kill its own people in the streets, protest may be futile.
{Matzav.com}