By Farnaz Fassihi and Leily Nikounazar
Government facilities in Iran are either closed or functioning on limited hours. Educational institutions have transitioned to entirely online formats. Highways and shopping centers are shrouded in darkness, and factories have been deprived of electricity, bringing production to a near standstill.
Even though Iran boasts one of the largest natural gas and crude oil reserves globally, it is grappling with a severe energy crisis linked to years of sanctions, poor management, deteriorating infrastructure, extravagant waste — and deliberate assaults by Israel.
“We are facing significant disparities in gas, electricity, energy, water, finances, and the environment,” stated President Masoud Pezeshkian during a live broadcast to the nation this month. “All are at a level that could trigger a crisis.”
Despite years of struggling with infrastructure challenges, the president cautioned that matters had reached a pivotal point.
For much of the past week, the nation was nearly paralyzed to conserve energy. While ordinary citizens grew increasingly frustrated and industrial leaders indicated losses in the tens of billions of dollars, Pezeshkian had no solution to offer other than his apologies.
“We must express our regrets to the public for the situation they are enduring,” Pezeshkian remarked. “With any luck, next year we will make efforts to prevent this from recurring.”
Officials indicated that the gap in the country’s gas requirements is about 350 million cubic meters per day, and with temperatures falling and demand surging, officials have had to implement drastic measures to ration gas.
The government faced two clear choices. It could either suspend gas supply to residential areas or halt supply to power-generating plants.
It opted for the latter, as cutting off gas supply to homes could pose serious safety risks and eliminate the main heating source for many Iranians.
“The government’s strategy is to avoid, at all costs, cutting gas and heat to residences,” Seyed Hamid Hosseini, a member of the Chamber of Commerce’s energy committee, stated in a phone interview. “They are rushing to manage the crisis and minimize the fallout because this situation resembles a powder keg that could lead to unrest nationwide.”
By Friday, 17 power plants had been entirely shut down, with the remainder operating at reduced capacity.
Tavanir, the state electricity company, warned manufacturers of everything from steel to glass to food and medicine that they should prepare for extensive power outages that could last for days or even weeks. This announcement has thrown both state-run and private sectors into disarray.
Mehdi Bostanchi, leader of the Coordination Council of Industries, a national organization linking industries with the government, described the current scenario as catastrophic, stating it was unlike anything industries had faced before.
He estimated that losses from just the last week could shrink Iran’s manufacturing output by at least 30% to 50%, amounting to tens of billions of dollars. He noted that while all sectors were impacted, smaller and medium-sized factories bore the brunt of the situation.
A lesser-known element has intensified the energy crisis this year: In February, Israel destroyed two gas pipelines in Iran as part of its covert operations against the country. Consequently, the government discreetly drew from emergency gas reserves to prevent service outages for millions, according to an oil ministry official and Hosseini from the Chamber of Commerce’s energy committee.
Pezeshkian, elected in July, has stated that his administration inherited an energy reservoir that it has struggled to replenish.
Natural gas constitutes around 70% of Iran’s energy sources, a percentage significantly higher than in the United States and Europe, as per international energy analyses. The government initiated an ambitious project to extend gas access throughout Iran, including rural areas, and currently about 90% of Iranian households depend on gas for heating and cooking.
Analysts have linked the existing crisis to various issues, including a failing infrastructure across the entire production and supply chain. Due to sanctions, Iran has encountered challenges attracting foreign investment to upgrade and modernize its energy framework, they argue. Other contributing factors include mismanagement, corruption, and low prices that encourage wasteful usage.
Iran initiated two-hour planned daily power outages for residential areas in November, but this was insufficient. The power outages are now more sporadic and of extended duration. For two days last week, educational institutions, banks, and government buildings were closed with only a day’s notice in all but three of Iran’s 31 provinces to conserve energy.
By Thursday, the government announced that all educational institutions would move to online formats, a measure not enacted since the pandemic, for the remainder of the semester, which lasts about three more weeks. Then, on Friday, the governor of Tehran disclosed that schools in the capital would be open on Saturday due to final examinations.
Government offices will operate on reduced hours, concluding work at 2 p.m. indefinitely to cut energy consumption.
Everyday Iranians are waking up uncertain about whether they can go to their jobs or send their children to school, or if elevators or traffic signals will be operational.
“The power outages have significantly disrupted daily living and work. When the electricity is cut, the water supply also ceases, and heating systems fail, rendering all heating appliances inoperative,” shared Sephideh, a 32-year-old teacher in Tehran, who mentioned her online English classes often get canceled due to internet disruptions. She requested that only her first name be disclosed, fearing repercussions from the authorities.
Nader, a dentist who similarly asked to be identified by just his first name, noted that he sometimes had to pause procedures on patients mid-treatment because of power interruptions.
The owner of one of the largest construction materials manufacturing facilities remarked in a Tehran interview that his enterprise had endured revolution, war, and sanctions, but none of those challenges were as chaotic and overwhelming as the turmoil experienced in the past week. He expressed that there is a growing sense of uncertainty within the private sector, as the country navigates repeated crises that the government seems incapable of managing.
Soheil, a 37-year-old engineer at a household appliance manufacturing plant in Isfahan, stated that the power outages would compel the factory to downsize and lay off workers due to increased production costs resulting from the outages.
Pezeshkian has initiated a video campaign featuring officials and public figures compelling Iranians to conserve energy by lowering their home temperatures by at least 2 degrees. Videos broadcast on state channels showcased the presidential compound without illumination at night.
