Pundit: Divide between hardliners and conservatives in Iran is irreparable

Owji, who led what is arguably the most critical ministry in Iran, is accused of having “misled” the public with “fake statistics and concocted data.”

Rouydad24 did not mince words last week, suggesting that the former Minister's behavior could cause some “to question [his] mental stability.” The publication lambasted Owji for wasting four years of resources with no tangible achievements, describing his tenure as one filled with empty rhetoric.

Following the death of Iran's former President Ebrahim Raisi and the apparent exit of the ultraconservative Paydari Front—the radical party that gained prominence during his term—some observers note that the press is seizing this moment with newfound assertiveness, though it's uncertain how long this will last. With a seemingly reduced fear of repercussions compared to Raisi's presidency, the media are now more openly exposing the shortcomings of the previous administration’s oil policies.

In his final remarks as Oil Minister, Owji claimed that his ministry had made fundamental strides in addressing the gas imbalance and managing the country's growing energy consumption.

Rouydad24, however, cited experts who challenged the validity of Owji's statement. “Not a single word in his speech corresponds to reality. The Raisi administration’s performance in the gas industry was a complete failure, even according to official statistics,” one critique stated.

Weighing in on the criticism, Nasrollah Zarei, a former deputy in the oil ministry under President Hassan Rouhani, offered his analysis of Owji’s claims.

“The key elements in the discussion of the imbalance in energy products or carriers are, most importantly, natural gas and gasoline. When Owji boasted about increasing natural gas production, the truth was quite the opposite—natural gas production in Iran actually decreased under his watch,” Zarei stated.

He further added, “The claimed increase in natural gas consumption due to industrial and residential growth was nothing but a lie. The reality is that there has been no significant increase in these sectors.”

Zarei also pointed out that the imbalance in natural gas was due not to an increase in consumption, as Owji suggested, but to a decrease in production—a direct result of unmet plans, unexecuted projects, and the failure to implement necessary measures on time.

“This issue is particularly true for gas fields like South Pars, where natural declines in pressure were not adequately managed,” Zarei explained, underlining the systemic failures of the previous administration.

The former administration’s claim to have completed Phase 14 of South Pars, a key gas project, using domestic capabilities, was another point of contention. Zarei criticized this narrative, stating, “The majority of the work on Phase 14 had been completed during Rouhani’s presidency. What Owji did was merely superficial. It had no real impact on production.”

The daily Entekhab also took aim at the former administration's oil sales policies.

The outlet detailed how Iran’s oil exports, particularly to China, were carried out under heavy discounts due to sanctions. While Owji said that Iran was exporting oil to 17 countries, the reality was that China remained the primary, if not the only, significant buyer. Even then, these sales were heavily discounted, with Iran selling its oil at $15 less per barrel than Omani oil, leading to significant financial losses for the country.

Majid Ansari, a member of the Expediency Discernment Council, disclosed in July 2024 that, under international sanctions, the Islamic Republic was offering daily discounts of $26 million to its sole oil buyer, China. In a video published by the Jamaran website, Ansari stated, “We asked at what price are you selling? They give a discount of 15 to 30 dollars per barrel, with an average of 20 dollars per barrel… That means $26 million a day from the money of the Iranian people.”

That sentiment was echoed by Masoud Daneshmand, a shipping industry expert, who elaborated on the scale of Iran’s losses in an interview with Entekhab.

“We are currently selling oil to China and giving a discount of 8 to 10 dollars per barrel, but they say they will buy our oil, but keep the money in yuan, which we must use to buy goods from them. If we want to free our money and buy from another country, there will be about a 16% currency transfer cost. With the discount we give on oil, this results in about a 25% loss in our transactions with the Chinese,” Daneshmand explained. He further confirmed Ansari’s estimates, stating, “The number Ansari mentions—at least $10 billion a year—is the loss being imposed on the Iranian people.”

Despite Owji’s efforts to downplay the extent of the discounts, the data indicates otherwise. Under the previous administration, Iran’s oil sales were not merely about offering discounts; they symbolized a broader failure to seize investment opportunities, resulting in reduced production and the decline of the country’s oil industry infrastructure.

Another industry expert who talked to Entekhab commented on Iran’s daily losses from oil sanctions back in February 2022.

Seyed Hamid Hosseini explained to the outlet, “We have a daily loss due to the inability to sell oil, and some of it is also the costs imposed on us because of the sanctions. The combination of these two determines the loss. We have an annual financial turnover of $100 billion through imports and exports, and we pay about 10 to 20 percent in additional costs for transportation, money transfers, discounts to customers, and other expenses; therefore, we lose about $10 to $15 billion this way.”

The media’s post-Raisi revelations, bolstered by expert analysis, paint a stark portrait of Owji’s tenure as Oil Minister.

As Iran navigates an uncertain future, with the potential for stricter sanctions enforcement hinging on the results of the upcoming US elections, the shadow of the previous administration’s failed oil policies is poised to linger --- casting its influence over both Supreme Leader Khamenei's leadership and the newly elected President's term.

“Clarify the reason for your son’s attendance at an official government meeting,” prominent sociologist Mohammad Fazeli who was among the first to join Pezeshkian’s campaign as an adviser took to X to demand from the Vice President.

Fazeli warned that Pezeshkian’s government is bound to be disgraced if nepotism and the interference of family members in government affairs does not stop. “The likes of me did not pledge their honor to the people so that the likes of Mr. Aref’s son roam freely in and around the government,” he added.

Controversies over Hamid-Reza Aref, 46, first began in 2017 when speaking about his education and career achievements he referred to the “good genes” he inherited from his parents in an online interview. At the time, Aref who served as vice president to the reformist President Mohammad Khatami from 2001 to 2005 was the head of the minority Reform faction in the parliament.

Since then, the phrase ‘having good genes’ has become synonymous with ‘family politics,’ referring to members of influential official and clerical families who enjoy privileges by virtue of their birth—privileges that have existed since the founding of the Islamic Republic. For example, Seyyed Ahmad Khomeini, son of the Republic's founder Ruhollah Khomeini, held no official position but served as his father’s top aide until his death.

“Everyone has a weakness, [Mohammad-Reza] Aref’s weakness is the good family gene … One should take their complaint to Pezeshkian who appointed him to the post,” one of the critics tweeted. 

Hamid-Reza Aref has also recently been accused of using his privileged position to install Faezeh Dolati who has had close family connections as his father’s adviser and aide. The appointment has particularly irritated reformists because Dolati’s husband, a former state television presenter, is known as a hardliner.

In recent years, the term ‘good genes’ has become synonymous with ‘aghazadeh,’ a label used to describe the privileged offspring of regime officials and insiders. These individuals leverage their fathers’ influence and privileges to amass power and immense wealth, often beyond the reach of ordinary citizens, through access to insider information, preferential treatment (rente), and legal immunity.

‘Aghazadeh’ draws from ‘agha’, a mundane word meaning sire/or mister in modern Farsi. In clerical circles, however, agha can also refer to men of high religious authority and influence. Thus, politicians and officials who want to emphasize their obedience to Supreme Leader Ali Khamenei often simply refer to him as ‘Agha’.

‘Aghazadegi’ drawn from ‘aghazadeh’, has accordingly come to refer to nepotism as a phenomenon in general. Aghazadeh is also an established last name which some families including the family of the former oil minister Gholamreza Aghazadeh have used since using last names became mandatory in 1924.

A Bloomberg report Friday that claimed another ‘aghazadeh’, the son of Iran’s former National Security Chief Ali Shamkhani is a significant figure in global oil markets has exacerbated the concerns over ‘aghazadegi’.

The Bloomberg report shed new light on Hossein Shamkhani’s recent ventures, including a Dubai-based company that is engaged in pushing vast quantities of Iranian and Russian oil into international markets by rebranding crude oil and various petroleum products in third-party jurisdictions such as the UAE as well as oil from countries not subject to sanctions.

Gholam-Ali Jafarzadeh, a former lawmaker, alleged on Saturday that ‘aghazadehs’ benefit from sanctions because they "earn nine percent of the proceedings from the sale of every shipment of oil."

“They sell the oil to China but take African currencies. That was why [former President Ebrahim] Raisi had to go to Africa and buy their commodities,” he alleged.

Over the years, the privileges enjoyed by regime insiders have become glaringly apparent to the general public, significantly undermining the legitimacy of the Islamic governing system. The common perception is that 500 to 1,000 elite families control Iran, hoarding the nation's wealth, while half the population struggles at the poverty level.

The annual draw is being held for a total of 120,000 vehicles of different types but making a deposit was required for 36,000 of them.

Many Iranians buy cars as investments like gold, real estate, stocks, and foreign currency to maintain the value of their savings. Prices, even for used cars, can increase in tandem with high inflation and a falling currency.

In the past few years, Iran's automakers have not been able to meet their production targets because of US sanctions imposed in 2018 and foreign currency shortages that hugely affected the procurement of parts. In the same year, imports were also banned. This has led to an imbalance in supply and demand. Iran was the 19th car producer in the world in 2021.

Out of the over 2.2 million people who signed up for the draw, only 1.2 million were required to make the deposit. As a result, their chances of winning in the deposit-required category are extremely low.

The draw has locked the total of around $4.5 billion in Iranian banks, equivalent to the total stock market value of the country’s top three automakers, Iran Khodro, Saipa, and Pars Khodro.

Iran Khodro and Saipa account for over 90 percent of all car production in the country. The government owns 40 percent of the shares in both companies "privatized" a few years ago and has maintained control over them. In fact, most of the other shares are also owned by government-affiliated banks and companies.

Some banks have offered applicants interest-free, no-fee loans of one billion rials ($1,600) without requiring guarantees, enabling them to cover part of the 2.3 billion rials ($3,800) deposit needed to participate in the draw. Notably, banks such as Sarmayeh and Iran Zamin, which have offered these loans, are among those that have faced significant capital losses in recent years.

The deposited sum covers half the final cost of the cars, and the outstanding amount should be paid at delivery time. Those who do not win in the draw have been promised to get back their deposits after the draw.

The vehicles sold to the fortunate "winners" are expected to be significantly more valuable on the open market when delivered over the next seven months—assuming the automaker adheres to its schedule without any delays.

Only a fraction of the 1.2 million applicants who made the deposit actually need the vehicles for personal use. The prospect of profiting from reselling the cars at higher prices on the open market has motivated many to sign up for multiple vehicles under the names of eligible family members. This strategy is driven by the expectation of a substantial profit once the vehicles are delivered.

“Probably over 90 percent of those who signed up are people who have money that they cannot use in business,” Babak Sadraei, an automotive industry expert, told Entekhab news website, adding that the automaker and the banking system are “the real winners” in the process.

Sadraei also cautioned about the potential economic impact of releasing a large amount of liquidity into the market when the locked deposits are freed. He warned that this influx of cash could flow into other sectors, such as the foreign currency market, driving up prices and further destabilizing the economy.

The online registration for the draw ended last month. Iran Khodro's latest statement said the draw was scheduled for late August but the results will be announced early September. The automaker has yet to announce a timetable for the gradual delivery of the vehicles.

Of the remaining 84,000 vehicles in the draw for grabbing, 60,000 are allocated to mothers with two children one of whom was born in the past two years. This is part of a government initiative to encourage population growth while 24,000 are the share of those whose cars are now too old and need to be scrapped.

Applicants in these two groups were not required to deposit money for the banks.

The Supreme Council of Economic Coordination announced on September 1 that the NDF's share from oil and gas revenues, initially set at 40% of oil income, will be slashed to 20% this year (ending in March). The decision, proposed by President Masoud Pezeshkian and greenlit by Khamenei, redirects the equivalent of $5.8 billion to pay off overdue debts to struggling farmers and drivers—debts that the government has repeatedly failed to manage.

This move, framed as a "loan" from the NDF to the government's budget, is a reminder of Iran's ongoing financial crises. The NDF, established with the lofty goal of converting Iran's oil and gas revenue into long-term economic assets for future generations, has been steadily depleted since international reactions began against Iran's nuclear program and economic sanctions intensified around 2009.

Despite the NDF's intended purpose, the government has treated it as a piggy bank. Earlier this year, Mehdi Ghazanfari, the head of the NDF, revealed that of the $36.5 billion allocated from the Fund, a staggering $17.76 billion has never been repaid. With the government showing no intention of returning the borrowed money, the Fund's original purpose has been all but abandoned.

The National Development Fund (NDF), established to save up to 30 percent of oil revenues initially for future generations, experienced withdrawals amounting to $13.6 billion from 2010 to 2013, a period when global oil prices remained above $100 per barrel. Despite this, more funds were retained in the NDF than withdrawn during Ahmadinejad's administration.

International sanctions imposed by the UN, along with most US and EU economic sanctions, were lifted in mid-2015 following the conclusion of the Joint Comprehensive Plan of Action (JCPOA) nuclear agreement, which limited Iran’s nuclear activities in exchange for the removal of most sanctions.

However, withdrawals from the NDF continued during President Hassan Rouhani's two terms (2013-2021). In his first term, $30 billion was withdrawn. After former US President Donald Trump withdrew from the JCPOA nuclear accord and reimposed severe sanctions, Iran increasingly depended on its reserves, leading to a negative cash flow in the NDF. During Rouhani’s second term (2017-2021), the government withdrew another $37 billion to maintain fiscal stability, despite the NDF's charter prohibiting its use for routine government operations.

The systematic depletion of the NDF is further compounded by the government's continued refusal to honor its obligations. Nasser Mousavi Largani, a parliament member and observer of the Fund's board, admitted last year that the government owes nearly $100 billion to the Fund—an amount that continues to grow as the government fails to increase the NDF’s share from oil revenues as mandated.

The latest raid on the Fund comes at a time of unrest among Iran's workforce. Small truck operators across the country, already suffering from reduced income and fuel quotas, have repeatedly gone on strike in protest. Just this past May, drivers in cities including Tehran and Sistan and Baluchestan halted work, citing the government's failure to allocate subsidized diesel fuel and enforce fair wages.

Similarly, wheat farmers, who are now the supposed beneficiaries of this latest financial maneuver, have been protesting the government's inability to pay for the harvest, collected and processed by the state. With only partial payments made and many farmers left waiting, their trust in the regime has been further eroded.

Pezeshkian, who proposed the Fund diversion, openly acknowledged the dire state of the government’s finances in a recent interview, lamenting the empty treasury and the inherited mess left behind by previous administrations. Yet, instead of addressing the root causes of the country's economic woes, the government has once again chosen to rob future generations to pay for its current failures.

A post on the Australian embassy's Instagram page shows Ambassador Ian McConville and his colleagues celebrating the “Wear it Purple Day with a splash of purple in every corner, and some delicious cupcakes made with love."

"Today, and every day, we’re dedicated to creating a supportive environment, where everyone, especially LGBTQIA+ youth, can feel proud to be themselves. Let’s keep championing diversity and inclusion for a brighter, more inclusive future 🤝🏳️‍🌈," the Instagram post added.

The German embassy in Tehran has also joined the Australian embassy's celebration by posting purple hearts in reply to its Instagram post.

In Iran, homosexuality is punishable by death for men and by 100 lashes for women. On repeated offenses, women can be also executed under the laws of the Islamic Republic which are based on a hardline interpretation of Shia Islam.

In its latest annual report on Iran's human rights practices, the US State Department expressed concern about reports that Iran's "security forces harassed, arrested, and detained individuals they suspected or perceived as being LGBTQI+."

"In some cases, security forces raided houses and monitored internet sites for information on LGBTQI+ persons," the report said.

In 2022, the Islamic Republic sentenced LGBTQ activists Zahra Sedighi-Hamedani (31) and Elham Choubdar (24) to death on charges of "corruption on earth through the promotion of homosexuality." However, the Supreme Court overturned the sentence, and the activists were temporarily released on bail. In December 2023, it was reported that Sedighi-Hamadani had safely fled Iran for another undisclosed country. However, Choubdar was arrested in February 2024 to serve her three-year jail term.

Iran's laws allow individuals to change their gender identify markers on government-issued identification cards after gender-affirming surgery and by court permission. Many Islamic Republic apologists portray the country's "tolerance" of transgenders as an expression of liberalism.

However, the Islamic Republic seems to be exploiting the sex-reassignment surgery (SRS) as a means of purging gays and lesbians from public life, as evidenced in a 2019 article by Economist.

The Islamic Republic has allegedly executed "between 4,000 and 6,000 gay men and lesbians... for crimes related to their sexual preference since 1979," a 2008 WikiLeaks cable said citing reports by human rights activists.