In a publication this morning (Sunday) by US newspaper The Wall Street Journal, it was revealed that Iran is facing one of the greatest challenges in its history, dealing with a severe energy crisis, the collapse of its regional allies, and growing internal unrest. These circumstances put the Iranian regime in a particularly difficult situation, especially against the backdrop of fears of confrontation with the new Trump administration, which threatens to increase economic and military pressure on the Islamic Republic.
Energy Crisis: A Collapsing Economy and Stagnant Industry
According to The Wall Street Journal, the energy crisis in Iran is a result of failed management and inadequate investment in infrastructure over the years. Over the last month, industrial factories operated at only 41% of their production capacity due to a severe shortage of electricity and natural gas. This shortage has particularly impacted essential factories such as those producing pharmaceuticals and cement, endangering the security of the food industry as well.
In the agricultural sector, the lack of electricity affects the water pumps necessary for irrigation, and the absence of natural gas hampers fertilizer production, which may reduce this year’s wheat yield. All of this has led to a dramatic increase in food prices, with meat prices rising fivefold over the past three years, and the shortage is extremely well-felt in the local market.
The Collapse of the “Axis of Resistance”
Over the past year, Iran has suffered a series of defeats in the regional arena, which have significantly weakened its ability to threaten Israel and its allies. The collapse of the Assad regime in Syria, which enjoyed Iranian support for years, alongside the elimination of Hamas leadership in Gaza and the destruction of Hezbollah’s infrastructure in Lebanon, has reduced the power of the “axis of resistance” led by Iran.
According to the article, Israel has even managed to strike critical infrastructure in Iran itself twice during 2024, including the destruction of Russian defense systems supplied to the country. Iran is now forced to rely on more distant allies, such as militias in Iraq and Yemen, which are not geographically close to Israel, thus limiting their impact.
Internal Backlashes and Social Unrest
Meanwhile, Iran is also facing increasing internal unrest. Protests and strikes are spreading throughout the country, primarily initiated by retirees, oil workers, and teachers. According to The Wall Street Journal, the protests have become increasingly political, with the public calling on the government to stop focusing on warfare and ideology and to start prioritizing the economy. Signs at the protests read: “Enough with the warfare, our table is empty,” and “Leave the veil, take care of us.”
The energy crisis has deepened the daily disruptions for citizens, with the electricity shortage leading to the shutdown of government offices, schools, and universities. Meanwhile, the youth in the country express dissatisfaction with the economic isolation and social restrictions, challenging the status quo of the Ayatollahs’ regime.
Iran vs. Trump
Based on Trump’s previous approach to Iran, the new Trump administration may exacerbate sanctions on Iran, and even consider military actions to halt its progress on the nuclear project. Iran, for its part, is examining the acceleration of its nuclear program to maintain its deterrence capability.
Concurrently, The Wall Street Journal report indicates that an internal discussion is taking place in Tehran regarding the need to renew diplomatic contacts with the West to alleviate economic pressure. However, many in the Iranian ruling elite oppose significant concessions that could undermine the ideological basis of the regime.
Consequences of October 7th: Iran is Paying the Price
A year and three months after the deadly October 7 attack by its closest ally Hamas, the Iranian regime is facing a multi-dimensional collapse. The economy is sinking, regional support is dissipating, and protests from within are intensifying. While Iran attempts to maintain its power and influence, it appears that the impact of recent events, both on the domestic and international fronts, places it in one of the most difficult periods in its history.
