US sanctions Iranian military front company selling oil to China

“There will be no such thing as production if we cut off the supply of gas in winter and electricity in summer to industries,” government spokeswoman Fatemeh Mohajerani said on Monday, justifying the decision to shield factories and major production centers from the worst of the power cuts.

“So instead of imposing power cuts solely on industries, we have directed some of it to domestic consumption.”

Iran is currently facing a peak-hour electricity deficit of around 20,000 megawatts. With the summer heat intensifying and water levels in hydropower dams at historic lows due to years of drought, power outages—both scheduled and unexpected—have become routine.

The government of President Masoud Pezeshkian blames inherited problems for the shortage. In parliamentary hearings for his cabinet approval in August last year, energy policy dominated the debate.

Lawmakers voiced concern at the time that the growing electricity gap could bring more severe blackouts and industrial shutdowns than before.

Economic survival over public comfort

The move to protect industry over residential demand is a calculated risk. Iran's manufacturing sector, already battered by sanctions, inflation, and a volatile exchange rate, is considered too critical to fail.

If industries grind to a halt, Iran risks deeper economic stagnation. But if public resentment continues to grow amid daily blackouts, the political costs could be just as severe.

Many industries, including cement plants and steel factories, which require uninterrupted energy for their kilns and machinery, are particularly vulnerable to power cuts.

The total annual loss from power cuts to the steel industry last year, according to the head of the Isfahan Chamber of Commerce, Amir Kashani, was estimated at around $4 billion.

Power cuts affecting daily lives

Widespread dissatisfaction is mounting, as daily life for millions is disrupted by blackouts as the daily power cuts are more than an inconvenience—they are a source of hardship, danger, and economic loss in the lives of millions of ordinary Iranians.

Social media is filled with videos and reports of people trapped in elevators, traffic lights failing and causing massive jams, and water not reaching upper floors of apartment buildings due to non-functional pumps.

Mobile phone signals have also been affected, as network operators are forced to shut down towers to prevent equipment damage when backup batteries run out.

Many small businesses, including bakeries, restaurants and cafes and grocery stores, report spoilage of perishable goods, compounding their financial strain.

Adding to the frustration, the government has shifted working hours for state offices to 6:00 AM in an effort to avoid peak hours, a move that has caused widespread disruption for employees and service recipients alike.

On Monday, authorities announced that school hours would also be adjusted to follow this new schedule.

A long-term crisis years in the making

Experts argue that Iran’s electricity shortage is not a sudden development but the result of decades of mismanagement and underinvestment.

Despite having the world’s second-largest reserves of natural gas, Iran has failed to expand its generation capacity or modernize its energy infrastructure.

“This crisis did not arise overnight, nor can it be solved in the short term,” Mehdi Masaeli, secretary of the Electricity Industry Syndicate, recently told Zaman-e Eghtesad, warning that officials should not downplay the severity of the situation.

Resolving the crisis would take at least three years, he said, citing the need for significant financial investment, equipment procurement, and coordinated management.

Authorities have also blamed cryptocurrency mining for electricity outages for years.

Earlier this week, Energy Minister Abbas Aliabadi said illegal use of miners has expanded and is responsible for around 1,000 megawatts of energy consumption.

He also urged citizens to report illegal mining to the authorities. Last year, authorities offered a bounty to combat illegal cryptocurrency mining activities. According to Aliabadi, authorities have seized over 220,000 illegal mining devices over the past year alone.

“These negotiations will be fully aligned with the Supreme Leader’s guidance, which will light our path,” Pezeshkian said during a meeting with a group of lawmakers. “We have not and will not tie the people’s livelihood to the outcome of the talks.”

Pezeshkian said that while Iran seeks dialogue without escalating tensions, it would not compromise on what he called national values. “We will not retreat from our principles under any circumstances,” he added. “At the same time, we are not seeking tension.”

Earlier in the day, Iran’s deputy foreign minister said the country is open to accepting temporary restrictions on uranium enrichment, though no detailed agreement has been reached.

Majid Takht-Ravanchi, speaking after the fourth round of indirect talks with the United States in Oman, said negotiations have yet to address the specifics of enrichment levels.

The talks, described by both sides as difficult but constructive, mark the highest-level contact between Tehran and Washington since the US withdrew from the 2015 nuclear deal in 2018 under former Trump administration.

Iran has since accelerated its enrichment to 60% purity—well above the deal’s 3.67% cap but below weapons-grade, according to the UN nuclear watchdog.

While US officials have called for a full dismantlement of Iran’s enrichment capabilities, Tehran insists the right to enrich is non-negotiable.

Iran’s atomic energy chief, Mohammad Eslami,said on Tuesday that the nuclear program remains a pillar of national strength and is not subject to bargaining.

Western powers accuse Iran of seeking nuclear weapons—an allegation Tehran denies. Despite diplomatic engagement, the US continues to expand sanctions targeting Iran’s nuclear and energy sectors.

Ongoing indirect negotiations between Iran and the United States are centered on complex and contentious issues, not routine matters, and are likely to extend beyond the timeframe suggested by Washington, an Iranian lawmaker said on Tuesday.

“These are not ordinary discussions. The negotiations are tough and may continue over the long term,” Reza Sepahvand, a member of parliament, said. “While the US side spoke of a two-month timeline, I believe more time will be needed.”

Sepahvand warned against giving the Iranian public false hope or spreading pessimism, urging officials to base public messaging on facts. “We must be honest. Neither overpromise nor instill despair.”

Iranian President Masoud Pezeshkian said on Tuesday that any negotiations with the United States would be carried out in full coordination with Supreme Leader Ali Khamenei, and reiterated that Iran would not compromise on what he described as its core principles.

“These negotiations will be conducted in full alignment with the Supreme Leader,” Pezeshkian said, according to ISNA. “We have not and will not tie people’s livelihoods to the talks.”

“We will not retreat from our principles under any circumstances,” he added. “At the same time, we are not seeking tension.”

The agreement signals Iran’s intent to deepen political and security ties with African states through its military and intelligence apparatus, according to Eric Lob, associate professor of politics and international relations at Florida International University, writing for The Conversation.

Iran has previously supplied surveillance and combat drones to Ethiopia, aiding government forces during the 2020–2022 Tigray conflict.

The US State Department reported last year that Iran had breached a UN Security Council resolution by sending armed drones to Ethiopia in the summer of 2021.

Similar equipment has reportedly been provided to the Sudanese army in its fight against the Rapid Support Forces, underlining Tehran’s broader regional strategy.

For Addis Ababa, the pact comes amid rising domestic insecurity and follows recent talks with Iran’s Persian Gulf rival, the United Arab Emirates.

Ethiopia is currently facing armed unrest from ethnic militias, including factions of the Tigray People’s Liberation Front and the Amhara Fano militia. It is also contending with economic challenges and renewed tensions with neighboring Eritrea.

The cooperation deal marks a continuation of a historically complex relationship. Ethiopia was the first sub-Saharan country to establish ties with Iran in the 1960s and resisted pressure to sever them in 2016 after Saudi Arabia and the UAE severed ties with Tehran.

“The agreement highlights Ethiopia’s pragmatic foreign policy, seeking support from both Iran and the UAE — rivals often on opposing sides of regional conflicts like those in Yemen and Sudan,” Lob wrote.