Energy crisis has Iran on the brink — and hands Trump a historic opportunity

Behnam Ben Taleblu | Dec 27, 2024

“Fools” flocking to the “scent of kebab”: That’s how Iranian Supreme Leader Ali Khamenei recently described audiences abroad who sense an opportunity to support Iran’s people against their clerical overlords in the face of his regime’s myriad challenges.

But the joke’s on Khamenei: When President Donald Trump returns to the White House next month, the United States will have a chance to end Tehran’s menace for good.

Iran is sunk in a months-long energy crisis that’s rocking the regime to its foundations.

Home to significant oil and natural gas reserves, the Islamic Republic has defied the Biden administration’s (admittedly lax) sanctions to remain involved in the global energy trade.

Over the past three years, the regime has managed to illicitly sell over $140 billion worth of oil.

Yet years of economic corruption and mismanagement, coupled with competing priorities over what to do with energy revenues — spend them on terror proxies abroad, or on the Iranian people at home? — has yielded gas shortages, hindering electricity generation and chilling millions of Iranians this winter.

The contradiction is so severe that even Islamic Revolutionary Guard Corps officials have called the predicament “disgraceful.”

Iran’s government-subsidized gas prices are artificially low, so demand is high and unwavering — and official calls for conservation haven’t helped.

Neither has Tehran repaired the energy infrastructure reportedly targeted by Israel in this year’s aerial attacks.

The result: rolling blackouts, shuttered industries and reduced work hours for businesses and government offices at the close of what many are calling an “annus horribilis.”

To control the crisis, the regime could cut subsidies and raise gas prices. But the mullahs fear that would set the stage for widespread anti-regime protests, like those seen in November 2019.

Those demonstrations, touched off by a previous energy crisis, quickly spiraled into a referendum against the regime’s broader policies, and its very existence.

But an unchecked energy crisis could lead to nationwide strikes — and a reprise of the events of the winter of 1978, the start of the revolution that brought the ayatollahs to power in the first place.

Magnifying this domestic crisis is the poor state of the Iranian currency, the rial, whose purchasing power has plummeted. The unofficial exchange rate is at its lowest point relative to the US dollar in recorded history.

The governor of Iran’s Central Bank framed the collapse of the rial in geopolitical terms, pointing to the fall of the Assad regime in Syria, regional setbacks with Israel and the return of a Trump presidency for driving down its value.

The currency slid to a whopping 801,000 rials to one US dollar just after Christmas.

The situation gets worse for Tehran the further one gets from Iran’s borders.

Despite promises from Iranian officials that Israel would be made extinct, the wings of Tehran’s terror proxies have been clipped by Israeli military might.

Hamas’ leadership and terror infrastructure in Gaza is now demolished, and Hezbollah in Lebanon has lost a significant portion of its arsenal and its leadership, as well as its mid-ranking commanders.

The coup de grâce: The fall of Assad in Damascus denies Tehran a vital piece of the regional chessboard that had allowed it to export terror and threaten American and Israeli interests.

The Islamic Republic also lost its long-range air defenses in an October retaliatory strike by Israel — so the next time it strikes at Israeli or American interests, the regime will be leading with its chin.

Reeling from defeat after defeat and trying to limit any contagion effect, Tehran is now trying to extinguish fires on the home front by delaying implementation of a new and controversial “hijab and chastity law” that would sharply increase punishments, while also lifting bans on the use of communication apps like WhatsApp and Google Play.

These are not signs of liberalization or moderation but admissions of defeat and signs of weakness.

Despite the outgoing administration’s pursuit of Iran appeasement, Trump can capitalize on this moment of opportunity.

By restoring a “maximum pressure” policy of coercive economic sanctions restricting oil and other export revenues while wielding a credible military option, Trump can box Khamenei in.

Expect Khamenei to increasingly rattle his nuclear saber in an effort to tempt the West with talks.

But if Trump resists the bait and marries maximum pressure with a policy of “maximum support” for the Iranian people, he can flip the script on Khamenei.

Iran’s beleaguered citizens have been using every opportunity since 2017 to protest against the regime in its entirety.

With Trump’s help, they can extinguish the arsonists behind the Middle East’s many fires.

Then Khamenei will learn who the real fool is.

Behnam Ben Taleblu is senior director of the Iran program at the Foundation for Defense of Democracies.