Iran’s troubled energy sector gets an untested tsar

But the crisis is rooted less in the sky than in decades of flawed policy: rushed dam-building, inefficient farming and poor governance.

The defining problem is management: lack of coordination among key ministries and short-term crisis fixes that ignore long-term realities.

One striking example came in July 2025, when schools and offices in Tehran and several provinces were temporarily shut down to reduce electricity and water consumption.

The move briefly eased pressure on the grid but underscored the absence of durable policy. No plan yet in sight promises anything near a comprehensive solution.

Daunting figures

A new energy ministry report shows dam inflows this year at just 1.35 billion cubic meters, an extraordinary drop from long-term averages. Total storage in Iran’s 193 major reservoirs has fallen to 34% of capacity, down 25% from last year.

Tehran’s situation is even more alarming.

The capital’s four main dammed reservoirs (Lar, Taleqan, Karaj and Amir Kabir) hold barely 12% of capacity, with Lar at just 2%. Inflow into the capital’s system has plunged 43% year-on-year.

If nothing changes, next summer could bring rationing and widespread drops in water pressure for millions in Tehran and other major cities.

Agriculture: the main drain

The core of Iran’s water crisis lies in agriculture, which consumes over 80% of renewable water resources, often with less than 40% efficiency. Much of the water used in irrigation is simply lost through evaporation, leakage, or outdated techniques.

Households, by contrast, account for just 6-10% of total use, yet are routinely targeted by conservation campaigns. The real problem is structural: water-intensive crops, unrealistic self-sufficiency policies and misallocated resources.

In many plains, groundwater extraction is two to three times higher than natural recharge rates, leading to dried wells, collapsing traditional aqueducts called qanats and land subsidence—up to 30 centimeters a year in some regions.

A test of survival

Climate change has intensified the crisis. Iran’s average temperature has risen 1.8°C over the past decade, triggering the evaporation of billions of cubic meters of water from dams, lakes, and soil.

Evaporation in many regions now exceeds total annual rainfall. Steady rains that once fed aquifers have been replaced by sudden flash downpours that run off quickly instead of replenishing the ground.

Iran can escape its water spiral only through structural reform: overhauling crop patterns and boosting agricultural efficiency, repairing leaky water networks and establishing transparent, data-driven water governance.

But the country's water crisis is ultimately a test of governance and social resilience. Without deep reform, the coming year could turn “thirst” from metaphor into political reality.

Water bankruptcy is not just empty reservoirs. It signals a failing contract between nature, the state and society which badly needs to be renegotiated.

Recent departures and high-profile clashes demonstrate that misgivings within the 18-month-old administration have spilled into public view.

Fayyaz Zahed, a senior adviser, publicly quit last week.

In a sharply worded letter, Zahed denounced several recent appointments as “embarrassing” and reflective of “bad taste,” singling out the choice of Sagheb Esfahani—a hardliner with no experience in the energy sector—to head Iran’s energy optimization body.

Zahed’s colleague Mohammad Mohajeri later quoted him as telling Pezeshkian: “If you want a silent apologist as your adviser, please be advised that genuine opinion cannot be bought with orders and directives.”

Jafar the kingmaker

Much of the internal disarray is now being linked to the expanding influence of Vice President Mohammad Jafar Ghaempanah—an old friend, wartime companion and arguably the president’s closest confidant.

Reports from Khabar Online and outlets aligned with Majles Speaker Mohammad Bagher Ghalibaf accuse Ghaempanah of driving a series of controversial appointments and sidelining more experienced advisers.

Hardline media have seized on the moment, describing the resignations—grudgingly accepted by Pezeshkian—as evidence of a broader administrative failure, one that neither the president nor his deputies can reverse.

These departures land at a time when Iran’s economy is dragging under renewed sanctions, high inflation, frustrated expectations from the post-election period and a sense that Pezeshkian has struggled to articulate a coherent economic direction.

Hardline outlets including Javan, Kayhan and Sobh-e No have amplified that narrative, arguing that the president’s inability to rein in his inner circle has compounded the economic drift.

The line of attack is clear: factional meddling and poor personnel decisions are not just political missteps—they are undermining governance at a moment of national fragility.

VP Aref next?

Against this backdrop, pro-Ghalibaf media such as Sobh-e No and Khorassan now claim that First Vice President Mohammad Reza Aref has submitted his resignation.

The government has not confirmed the reports. Some accounts suggest the trigger is Aref’s escalating clashes with Ghaempanah and Chief of Staff Mohen Hajimirzai. Others say Aref grew frustrated with the “limited scope” of his role.

Aref himself has been criticized by both conservatives and moderates for taking on more responsibilities than his capacity allowed.

If Pezeshkian accepts Aref’s resignation, Ghaempanah would become the president’s last remaining senior vice president, consolidating his position as the most influential figure in the administration’s inner ring.

One anecdote from a recent provincial visit has circulated widely: after one too many sycophantic compliments from Ghaempanah, Pezeshkian reportedly snapped, “Come off it!”

Sasan Karimi, an aide to former foreign minister Javad Zarif, later quipped on social media: “The country would have been better off if Jafar (Ghaempanah) really did come off it. Sometimes the biggest obstacles lie within the innermost circles.”

Together, the confirmed exit of Zahed, the deepening feud around Ghaempanah, the economic malaise, and the swirl of unverified but persistent reports surrounding Aref paint a picture of an administration under severe strain and struggling to hold itself up.

The move will introduce a higher fuel charge to drivers refueling without government-issued smart ration cards or beyond their allowed quotas.

Iran’s cabinet approved the new three-tier fuel pricing system that will introduce a 5,000-toman (4.4 cents per the free market rate) rate for motorists who refuel without their smart cards or after exhausting their lower-priced quotas, according to a government directive published by domestic media.

The initiative, dated November 23, says that the two existing subsidized rates — 1,500 tomans (1.3 cents) for monthly quotas and 3,000 tomans (2.6 cents) for non-quota purchases with personal smart fuel cards — will remain in place but with reduced allocations.

An across-the-board fuel price rise in November 2019 triggered nationwide protests that were quashed with deadly force, with hundreds reported killed and thousands detained.

The increased rate was kept and maintained unchanged until the latest initiative.

From mid-December, refueling with “emergency station cards” will be charged at 5,000 tomans. The rate represents about ten percent of the government’s refinery purchase cost, the directive said.

Reports in Iranian outlets earlier this autumn had indicated that several pricing scenarios were under review.

In late October, President Masoud Pezeshkian said there was “no doubt” that fuel prices would eventually need to rise as domestic consumption continues to climb.

Fuel demand has at times exceeded 140 million liters per day, outpacing production of roughly 110 million liters, driven by inefficient vehicles, smuggling and seasonal spikes, according to officials.

Under the new measures, government-plated vehicles, cars in free-trade and special economic zones, imported cars and newly registered domestic vehicles will no longer receive 1,500- or 3,000-toman quotas.

Instead, they will be allocated a monthly amount priced entirely at the new 5,000-toman tier. Private individuals owning more than one gasoline-powered car will be entitled to quota rates for only one vehicle.

Alongside the new pricing policy, the first cargo of imported super gasoline — 300,000 liters — was sold on Iran’s energy exchange on November 22 at 65,800 tomans (57 cents) per liter.

Tasnim news agency reported that further changes, including adjustments to gas quotas for CNG-powered taxis, are expected to be announced in February.

According to the judiciary’s media center, Tehran prosecutors accused the former lawmaker of “spreading false information” about the content of a letter Pezeshkian sent to the Saudi crown prince.

Earlier this week, the foreign ministry said the letter was a routine diplomatic message concerning coordination for the annual Hajj pilgrimage.

The announcement comes days after former lawmaker Mostafa Kavakebian told Iranian media that Pezeshkian had, with the approval of Supreme Leader Ali Khamenei, sent a message through the Saudi crown prince offering to resume talks with Washington. Reuters had earlier reported that the letter urged Riyadh to help persuade Trump to restart nuclear negotiations — a report Tehran denied.

Foreign ministry spokesman Esmail Baghaei dismissed the reports, saying “the president’s message to the Saudi crown prince had purely bilateral content,” and accused some domestic figures of fueling “baseless speculation.”

Reports of Saudi mediation

The Lebanese newspaper al-Akhbar reported on Tuesday that Trump had authorized the Saudi crown prince to manage contacts aimed at opening dialogue with Tehran. The paper said bin Salman believed a US-Iran understanding was necessary to reduce regional tensions, though there has been no confirmation from either Washington or Tehran.

Iran’s state news agency IRNA said speculation about third-party mediation misses the broader issue, arguing that the main obstacle is the lack of a shared framework for talks with the United States.

The lawmakers, in a letter to judiciary chief Gholamhossein Mohseni Ejei published by Iranian media, said more than a year after the alleged malpractice at Vali-Asr Hospital, officials have yet to provide a full public account of what happened or who was responsible.

They urged what they described as a “serious and transparent” investigation to protect patients’ rights and public trust.

The case first surfaced in Iranian media in October 2024, when local outlets reported that cancer patients at the privately run hospital had received distilled water in place of high-cost chemotherapy drugs that were allegedly diverted for sale on the black market.

Provincial police said at the time that a hospital aide was detained as a suspect and later identified three alleged accomplices, adding that the drugs had been moved to Tehran and sold in the informal market. According to East Azarbaijan police, 20 judicial case files were opened, including cases involving deceased patients’ families.

Prosecutors in Tabriz said the investigation began after a complaint was filed in November 2024, and that four people were arrested.

The provincial prosecutor’s office has said at least one patient whose medication was stolen died, prompting the case to be referred to a special murder unit, and that more than 30 complainants have registered claims so far.

Health authorities in Tabriz confirmed wrongdoing in the chemotherapy ward but said it involved “individual misconduct” rather than an institutional policy, and that the hospital itself reported the suspects to law enforcement.

Former vice president involved

In their Tuesday letter, lawmakers also raised concerns over a potential conflict of interest involving Shahram Dabiri Oskuei, the hospital’s main shareholder and director.

They said Dabiri had sought to frame the affair only as illegal drug sales and had publicly suggested the missing treatments did not affect patients’ life expectancy because some were in advanced stages of cancer.

The lawmakers said that Dabiri has announced his candidacy to head Iran’s Medical Council Organization, a body that can play a disciplinary role in suchcases, and said this could undermine confidence in the investigation.

DabiriOskuei, a physician and politician who served as Tabriz city council chairman and later as Iran’s vice president for parliamentary affairs in under President Masoud Pezeshkian, has not publicly responded to the lawmakers’ new call, according to Iranian media.

Pezeshkian fired him in April after images surfaced online showing the official on vacation in Argentina and en route to Antarctica during the Iranian new year holidays.

Separately, Iranian media reported a similar case in January at Tehran’s Shariati Hospital, where officials said a staff member was suspended after drugs were allegedly siphoned off and replaced with distilled water, with the matter referred to the courts.