Whether it's talks or war, we'll suffer all the same

Isa Bozorgzadeh, spokesman for Iran’s water industry, said on Tuesday that the usable capacity of Karaj Dam near Tehran has dropped to nearly half, much of it rendered useless due to sediment buildup.

“Lar Dam has practically dried up, and Latian, Taleqan, and Mamloo reservoirs are facing a 46% decrease in rainfall compared to the average and 25% compared to last year,” he told ILNA news agency.

Water shortages have triggered growing concerns in recent weeks, particularly in Tehran and Isfahan provinces, where officials have raised the possibility of rationing.

Bozorgzadeh cautioned that Tehran is consuming 50 million cubic meters of surface water each month while the combined reserves of the capital’s five main dams—including dead storage and sediment—amount to just 60 million cubic meters.

“Conditions have deteriorated to the point where even a motorcyclist could drive through the reservoirs,” he said.

Eastern Tehran’s water and wastewater company reported that Latian and Mamloo dams are each only 12% full, while Lar is down to just 1%. Karaj, a historically stable reservoir, has shrunk to 7% capacity.

Iran’s water supply depends largely on rainfall, snowmelt, and underground aquifers, but decades of over-extraction have left groundwater tables severely depleted. The sharp decline in precipitation—down more than 40% in Tehran province relative to long-term averages—has compounded the problem.

Beyond Tehran, Bozorgzadeh identified Hormozgan, Sistan and Baluchestan, Khuzestan, Kohgiluyeh and Boyer-Ahmad, and Bushehr as regions struggling with a 50% drop in rainfall.

Government spokeswoman Fatemeh Mohajerani acknowledged the severity of the situation, saying, “A nationwide decrease in average rainfall this year has led to shortfalls as high as 75% in some provinces.”

Iran’s energy ministry reports show that despite lower rainfall, hydropower generation increased by 24% in the fiscal year beginning March 2023, amid the country's energy crisis, reaching 17 terawatt-hours and maintaining that level into the current year.

Dalga Khatinoglu, an oil and gas analyst, suggested the government’s decision to sustain hydroelectric output was a factor in the current crisis.

“Iran failed to achieve its planned growth in thermal and renewable energy, leaving it dependent on hydropower,” he told Iran International. “Over the past two years, the country commissioned just 4 gigawatts of new plants—about 30% of its target—with 90% being gas-fired. The rest came from renewables.”

Hydropower reliance, combined with a persistent drought, has accelerated reservoir depletion, leaving little room for recovery even if precipitation levels were to improve.

Meanwhile, Iranian media has begun to raise alarms about broader implications. Etemad newspaper warned that 2025 could mark a turning point in the country’s water and energy crisis, predicting that shortages could become more severe than any previously experienced. Some hydrologists have cautioned that Iran has used up nearly 1,000 years' worth of groundwater reserves in just three decades.

The currency was trading at one million per US dollar in Tehran on Tuesday as gold prices also rose. This represents a 14,000-fold devaluation of the rial, which had remained stable at 70 per dollar for over a decade before the 1979 Islamic Revolution.

Food inflation, which has averaged 100% in recent months, is expected to reach critical levels in the coming months unless Tehran initiates negotiations with the Trump administration.

The rial, which was valued at around 40,000 per dollar in early 2018, began to plummet after Trump withdrew from the JCPOA nuclear deal in May of that year and imposed tough economic sanctions, pushing inflation above 40%.

Despite long negotiations with the Biden administration in 2021-2022, Tehran did not reach an agreement with the US over reviving the JCPOA and its economic situation continued to deteriorate.

In February, President Trump called for new negotiations, stressing that Iran must not acquire nuclear weapons and vowing to tighten sanctions. So far, Supreme Leader Ali Khamenei has rejected talks, while Iranian officials maintain that Tehran will not negotiate under pressure.

Three days ago, Trump ordered air strikes against the Yemeni Houthis who have attacked international shipping in the Red Sea region and lobbed missiles at Israel. This was seen as a clear warning to Tehran. On Monday, Trump warned Tehran that it will be punished if its allies the Houthis retaliate against a US air assault over the weekend, escalating his rhetoric against Tehran.

"Every shot fired by the Houthis will be looked upon, from this point forward, as being a shot fired from the weapons and leadership of IRAN, and IRAN will be held responsible, and suffer the consequences, and those consequences will be dire!" Trump wrote on his Truth Social platform.

As tens of millions of Iranians earn the equivalent of less than $150 a month and inflation is rising, some media outlets and commentators in Tehran have warned of potential unrest.

Speaking at a meeting on energy distribution and consumption, Pezeshkian stressed the need for equitable energy policies and flexible solutions adapted to regional conditions.

“Addressing energy imbalances should not be confined to a single approach,” he said, advocating for a mix of strategies to optimize distribution and ensure fairness across different provinces.

Iranian officials refer to the shortages in the energy sector as an imbalance.

The president also emphasized public engagement in energy-saving initiatives, suggesting that mosques, health centers, and prominent cultural figures could help promote consumption reforms.

“If we involve people in implementing these decisions, we will overcome many challenges, including energy distribution and consumption management,” he added.

Among other measures, Pezeshkian highlighted the need to modernize heating equipment, ban outdated and inefficient appliances, and expand the use of smart meters in residential areas.

The energy crisis, marked by widespread electricity shortages and gas deficits, has disrupted industries across the country since the past months. Aging infrastructure, international sanctions, and poor management have compounded the problem, leading to the shutdown of approximately 80 power plants.

During the winter, Iran faces a daily shortfall of at least 260 million cubic meters of gas, further straining the electricity supply.

Iran has vast oil and gas reserves, much of which it cannot tap due to US-led sanctions which stall investment and maintenance.

Despite the wage hike, workers' representatives had demanded at least a 70% increase to keep pace with inflation.

The council did not issue a decision on housing allowances, leaving it at 9 million rials ($9.50) per month, while rent for a 50-square-meter apartment in Tehran averages 150 million rials ($160) per month.

Hussein-Ali Haji Deligani, a member of parliament, dismissed the 45% wage increase as insufficient in the country's collapsing economy.

“With 100 million rials ($106), a family cannot survive,” he said, calling for a fundamental adjustment of wages to match inflation.

The increase is 10 percentage points higher than last year’s 35% wage increase, but some lawmakers emphasized that percentage gains mean little when purchasing power declines.

Mojtaba Yousefi, an MP from Ahvaz, pointed out that “when wages rise slower than inflation, workers’ real income drops by 20%.”

According to Iran’s labor law, the minimum wage must be set in accordance with inflation and provide for a household’s basic needs.

Inflation has been consistently around 50 percent and the economic crisis has significantly diminished the purchasing power of ordinary Iranians, leading to tens of millions falling into the category of working poor.

Experts highlight that the poverty line for Tehran residents is approximately 300,000,000 rials (approx. $600) per month, three times the current minimum wage.

Ali Babaei Karnami, head of the parliamentary Social Committee, previously said that any increase below 50% would be “a deviation from the law.” He also cited reports estimating a household’s essential expenses at 260 million rials ($277) per month, more than twice the newly set minimum wage.

Under the new system, a married worker with two children will see their total monthly income rise from 116.9 million rials ($124) to 163.5 million rials ($174), while a single worker without seniority will earn 134.9 million rials ($144), up from 94.6 million rials ($101).

Each year, Iran’s labor ministry convenes negotiations between worker and employer representatives, but two key factors ultimately determine wages: the government’s salary increases in the annual budget and the inflation rate reported by the country’s statistics agency.

Critics argue that raising wages without broader economic reforms risks fueling further inflation while failing to improve workers’ real incomes. At least one third of Iran now lives below the poverty line.

In dollar terms, wages have barely grown due to the weakening rial, leaving many workers effectively poorer despite nominal increases.

Mojtaba Ghahramani, head of the Hormozgan Province Judiciary, said that the unauthorized diversions were found on a natural gas pipeline between the villages of Sar-Rig and Isin.

"Technical and police measures have been initiated to identify the perpetrators of this fuel theft," Ghahramani said, adding that some of the taps appeared to be newly installed.

Ghahramani repeated the judiciary's past warnings to the Ministry of Petroleum about the need for enhanced monitoring and the installation of advanced metering systems.

The discovery follows heightened scrutiny of fuel smuggling in Iran, with President Masoud Pezeshkian recently decrying the daily loss of 20 to 30 million liters of fuel as a catastrophe amid a nationwide energy crisis.

Economists and officials have increasingly pointed to systemic, large-scale operations, rather than small-time smugglers, as the primary drivers of the illicit trade.

Estimates suggest that up to 50 million liters of fuel may be smuggled out of Iran daily, raising questions about high-level complicity.

"This volume of smuggling cannot be the work of small-time smugglers in border regions. It is definitely done by government entities," economist Hossein Raghfar told local media.

The sheer scale of the operation, involving potentially thousands of trucks or large tankers, has led experts to suspect the involvement of organized networks and even elements within the Islamic Revolutionary Guard Corps (IRGC).

The IRGC controls a significant portion of the country’s transportation networks and border crossings, which, according to economic journalist Reza Gheibi, makes it difficult to imagine that such large volumes of fuel could be smuggled out of the country without the IRGC’s knowledge or involvement.

The lucrative nature of fuel smuggling, driven by the disparity between subsidized domestic prices and higher international rates, has also fueled corruption within government ranks, evidenced by recent official arrests

In December 2022, Aref Akbari, the Public and Revolutionary Prosecutor of Hormozgan Province, announced the arrest of six rural mayors, three employees of the Ministry of Industry, and two members of the Engineering Organization on charges of collaborating with fuel smugglers.

The ongoing energy crisis, marked by power outages and disruptions to industrial and even government activity, has intensified calls for stricter oversight and technological solutions to curb fuel theft.