Israel reveals Iranian-designed Hezbollah ‘terror tunnel’ with large drone cache

The warnings point to a new phase in Iran’s long-running drug crisis. The problem is no longer only that medicines are expensive or hard to find. The formal supply chain itself is weakening, while the black market grows around patients who cannot obtain medicine through pharmacies.

Haleh Hamedifar, head of the Association of Medical Biotechnology Product Manufacturers, told the semi-official ISNA news agency that the main challenge facing Iran’s pharmaceutical industry is not simply a shortage of foreign currency, but “instability in decision-making and lack of coordination in implementation.”

“The pharmaceutical industry cannot be managed with daily decisions, changing circulars and unpredictable processes,” she said.

Hamedifar warned that sudden policy changes disrupt the supply of raw materials, production and distribution, with effects that appear months later “in pharmacies, hospitals and ultimately at the patient’s bedside.”

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Iran says it produces most of the medicines consumed in the country, but domestic production still depends on imported raw materials, equipment, packaging, machinery and spare parts. That leaves even locally made drugs exposed to banking restrictions, currency decisions and import delays.

Hamedifar said recent shifts in currency rules have forced some raw materials out of preferential currency categories and into exchange-rate systems that are not reliably funded. Alternative routes, including the use of export proceeds or privately held foreign currency, were introduced before the administrative infrastructure was ready, she said.

Companies have been forced to amend files, repeat import registrations and restart procedures they had already completed, she said.

“The problem in many cases is not the decision itself, but how it is implemented,” Hamedifar said.

She said outages and errors in government platforms, including disconnects between trade, drug-regulation and banking systems, should not be treated as technical glitches because each delay can postpone the arrival of raw materials and later disrupt drug supply.

Interior Ministry spokesman Ali Zeynivand separately acknowledged that high medicine prices are real and said the government does not deny that internal failures may be part of the problem.

“Part of the problems are caused by the imposed war, another part by the sanctions that already existed, and part may be due to our shortcomings or lack of precision,” he told the Dideban Iran news website. “We do not reject any of these.”

Zeynivand said President Masoud Pezeshkian, himself a physician, is personally sensitive to the issue and that the Health Ministry, Plan and Budget Organization and Central Bank are working on measures to contain the situation. But he cautioned that Iran’s economic problems would not be solved simply by signing a memorandum.

For patients, the consequences are already visible in higher out-of-pocket costs, incomplete prescriptions, empty pharmacy shelves and growing reliance on unofficial sellers.

Mehdi Sanei, an investigator at Iran’s medical crimes prosecutor’s office, told the Iranian daily Shargh that Iran has only one legal medicine market: the official network supervised by the Health Ministry and Food and Drug Administration. Any medicine sold outside that chain is illegal, he said.

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“In the field of medicine, there is no such thing as a legal free market,” Sanei said.

He said shortages are the starting point for much of the illegal trade. When patients cannot find medicine in pharmacies, they turn to dealers, Telegram channels, middlemen and informal networks.

“As long as medicine shortages exist, the smuggling market will exist,” he said.

Sanei warned that the illegal drug market is unusually profitable because patients cannot postpone treatment. Families dealing with cancer or chronic illness may sell savings, jewelry, cars or even homes to obtain scarce medicine.

“I do not know of a commodity whose profit is as guaranteed as smuggled medicine,” he said.

He said some black-market medicines are official Iranian-made drugs diverted from the legal system through fake prescriptions, distribution violations or other routes. But he described an even more dangerous trend: the growing presence of counterfeit or unauthorized medicines made inside Iran.

Sanei estimated that more than 80 percent of medicines in the illegal market are now unauthorized domestic products rather than genuine imported drugs.

Those products may be made in illegal workshops with unknown or ineffective materials and fake packaging, he said. Some may contain no active ingredient, contamination or harmful substances.

“People pay heavy costs, and there is no guarantee that what they receive is really medicine,” he said.

The result is a self-reinforcing cycle: shortages weaken the legal market, patients move toward illegal sellers, the black market becomes more profitable, and the official system loses more ground.

“The smaller the legal market becomes, the larger the illegal market becomes,” Sanei said.

Former ambassador Mohammad Irani argues that effort will depend largely on the success of negotiations between Tehran and Washington.

Speaking to Shargh on Thursday, June 18, Irani said that "the restoration of Iran's damaged relations with its Arab neighbors is directly contingent upon the success and final quality of the broader Tehran-Washington agreement."

He argued that with hostilities paused and a tentative memorandum of understanding now on the table, "Iran must adopt an optimistic and rational diplomatic approach to break out of political and economic isolation."

Iran cannot repair relations with Arab and regional neighbors "in a vacuum," he said, insisting that regional diplomacy is inseparable from the outcome of negotiations with Washington.

His comments reflect a broader theme across Iran's press, where discussions of relations with Persian Gulf states have become increasingly tied to post-war diplomacy and the emerging Tehran-Washington understanding.

A recurring argument is that the conflict exposed the vulnerability of Iran's Arab neighbors and reinforced their interest in a durable understanding between Tehran and Washington. Many voices in Tehran argue that regional states now view a sustainable agreement as the best guarantee of their own economic and technological stability.

Irani also argued that a lasting regional order cannot be imported or built through symbolic agreements alone, as smaller states remain engaged in a constant balancing act between larger regional powers, particularly Iran and Saudi Arabia.

Many commentators have likewise suggested that Persian Gulf states are reassessing their security doctrines in the aftermath of the war, particularly regarding Israel's growing strategic and technological footprint across the region.

Several outlets, including Etemad, ISNA and Eghtesad News, have argued that Iran's long-term place in the regional order will ultimately depend on the fate of the nuclear file and the broader understanding taking shape between Tehran and Washington.

At the same time, analysts warn that if the current 60-day negotiation window fails to produce a more permanent framework, Iran's Arab neighbors are likely to deepen security, cybersecurity and defense partnerships with Western and other global powers, further marginalizing Tehran.

For the talks to succeed, Irani argued, the negotiating team needs strong domestic backing to convert wartime resilience into peacetime development.

"The negotiating team must feel that it enjoys the support of the nation," he said. "We must show that the steadfastness and resistance shown during recent conflicts is now gradually bearing fruit."

Ultimately, he concluded, a durable homegrown security framework will remain elusive as long as Persian Gulf states prioritize regime survival over collective security and fundamental disparities in regional power remain unresolved.

But some Iran experts argue the agreement risks delivering significant concessions to Tehran while leaving key disputes unresolved.

David Schenker, former US Assistant Secretary of State for Near Eastern Affairs, told Eye for Iran he was surprised by the scope of benefits Iran could receive under the agreement.

"I don't feel good about it," Schenker said.

The MOU outlines a 60-day negotiation period during which the future of Iran's nuclear program, sanctions relief, frozen Iranian assets, reconstruction funding and the administration of the Strait of Hormuz will be discussed.

According to Schenker, the agreement effectively gives Tehran major economic benefits upfront while postponing the most difficult negotiations.

"In the meanwhile, it's a tremendous win for Iran," he said.

Lebanon's role in the deal

One of the most controversial aspects of the agreement centers on Lebanon.

Earlier this month, Iran launched direct missile attacks on Israel after Israeli strikes targeted Hezbollah positions in Beirut's southern suburbs. The exchange marked a significant shift in Tehran's approach.

For decades, Iran largely relied on proxy groups such as Hezbollah and Hamas to confront Israel. This time, Iranian officials openly linked attacks on Hezbollah to direct Iranian retaliation against Israel. Many Iran experts warned the Trump administration against tying Lebanon to the Iran conflict.

Iranian leaders subsequently insisted that any broader ceasefire arrangement must also address Lebanon.

Foreign Minister Abbas Araghchi warned that negotiations could not move forward unless fighting in Lebanon ended, while other Iranian officials described Lebanon as being at the "forefront" of discussions with Washington.

Israeli Prime Minister Benjamin Netanyahu rejected what he described as Iran's attempt to impose a "new equation" in which attacks on Hezbollah would trigger direct Iranian military action.

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Schenker believes elements of that equation may now be reflected in the MOU.

"I think first and foremost it suggests that the administration wanted a deal more than Iran, so it was willing to make concessions," he said.

According to Schenker, the agreement risks strengthening Iran's regional influence despite the military setbacks it suffered during the conflict.

"They're going to point to this and say, 'Look, Iran and Hezbollah protected Lebanon,'" he said.

He argued that such a narrative could undermine Lebanon's elected government while boosting Iran's standing among Hezbollah supporters.

For Schenker, the precedent may prove as significant as any sanctions relief.

"If Iran can insulate not only Hezbollah but also its other regional partners from retaliation, it strengthens this proxy network across the region," he said.

Concerns over sanctions relief

Schenker also questioned provisions that could lead to the lifting of oil sanctions and the release of frozen Iranian assets.

"They're doing the lifting of the oil sanctions upfront," he said, warning that the move could provide billions of dollars in revenue to Tehran.

The former diplomat said several of the original objectives Washington and Israel cited at the outset of the conflict appear absent from the current framework, including limits on Iran's ballistic missile program and support for regional proxy groups.

He also raised concerns over language that could eventually allow Iran to collect fees related to maritime traffic through the Strait of Hormuz.

"It's something out of a mafia movie," Schenker said. "Iran is offering protection and will shake down international shipping."

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The Iranian perspective

While much of the debate surrounding the MOU has focused on geopolitics, oil markets and regional security, some opponents of the Islamic Republic are viewing the agreement through a different lens.

For human rights activist Gazelle Sharmahd, whose father Jamshid Sharmahd was abducted and later executed by Iranian authorities, the announcement felt deeply personal.

"Defeat," she said when asked how she reacted to news of the agreement.

"I think a lot of people feel betrayed."

Sharmahd said many Iranians had believed sustained military and economic pressure had brought the Islamic Republic to one of its weakest moments in decades.

"We had the regime on its knees," she said. "How do we go from there to giving this regime the resources, the power, the legitimacy to build up everything that we took away from them?"

She warned that sanctions relief and new funding could strengthen the state's ability to suppress dissent inside Iran.

"The execution wave will not go down," she said. "In history, we see it goes up when we appease this regime."

Message to Trump

Sharmahd reserved some of her strongest comments for Trump himself.

Speaking directly to the US president, she urged him not to abandon pressure on Tehran.

"Capitulation will not save us. It will be our end," she said.

"You have an army of Iranians. You have an army of American patriots. You have an army in the Middle East standing behind you."

She argued that any future agreement should prioritize the aspirations of ordinary Iranians rather than the interests of the government in Tehran.

"Speak to us," she said. "Not to this regime."

As negotiations move forward, the debate over the MOU is likely to intensify.

For supporters, the agreement offers a pathway away from another costly regional war. For critics, it risks rewarding Tehran while leaving unresolved many of the issues that helped trigger the conflict in the first place.

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On June 16, Energy Minister Abbas Aliabadi announced that studies for a power-grid connection between Iran and Qatar were nearing completion and that implementation was beginning.

The project revives a 2022 memorandum of understanding signed during President Ebrahim Raisi's visit to Doha, which envisaged electricity exchanges of up to 1,000 megawatts through a subsea link.

The announcement comes as Iran grapples with a deepening electricity crisis, sanctions pressure and vulnerabilities exposed by recent conflict involving Iran, Israel and the United States.

Energy diplomacy under pressure

The proposed interconnection is more than a technical project.

If completed, it could allow electricity to flow in either direction during periods of peak demand or disruption. Qatar's gas-fired generation could help support Iran during shortages, while Tehran could seek to export power when domestic demand is lower.

More broadly, the project reflects Iran's effort to deepen economic ties with Gulf neighbours and reduce its regional isolation. Qatar has long maintained relations with Iran, the United States and other Gulf states while playing a recurring mediating role in regional diplomacy.

For Tehran, electricity trade offers revenue, political leverage and a way to project itself as a regional energy actor despite sanctions and mounting domestic constraints.

The project could also serve as a modest step toward wider Gulf electricity integration. Linking Iran to the GCC Interconnection Authority network would remain politically and technically difficult, but the Qatar connection would mark one of the few tangible efforts in recent years to expand energy cooperation across a region long divided by geopolitical rivalries.

Yet Iran's own power shortages raise questions about how realistic those ambitions are.

A worsening power crisis

Iran's electricity system faces mounting strain from years of underinvestment, aging infrastructure, sanctions, inefficient consumption, fuel constraints and drought-related pressure on hydropower generation.

Although installed generation capacity appears substantial on paper, actual available supply is often significantly lower because of plant outages, fuel shortages, declining efficiency and transmission losses.

The situation becomes especially acute during the summer, when air conditioning, industrial demand and urban consumption push the grid beyond available capacity.

Iran's parliamentary research center has warned that the country could face a summer electricity deficit of around 13,640 megawatts, equivalent to roughly 17% of projected peak demand.

Blackouts, industrial shutdowns and disruptions to public services have become increasingly common.

This context helps explain why the Qatar project matters. While Iranian officials often present such initiatives as evidence of the country's emergence as a regional energy hub, the interconnection may be just as important as a potential source of imported electricity during periods of domestic stress.

Without major investment in generation, transmission and fuel supply, the project could ultimately expose Iran's dependence on its neighbours rather than demonstrate export strength.

Iran has relatively few options for addressing the crisis quickly. Sanctions continue to restrict access to modern turbines, grid equipment, financing and foreign expertise, while meaningful electricity-price reforms remain politically sensitive. Expanding renewable energy would help, but doing so requires investment, storage capacity and transmission upgrades that cannot be deployed overnight.

Regional electricity trade is therefore one of the few tools available to Tehran in the short term.

The shadow of war

Recent conflict has further highlighted Iran's energy vulnerabilities.

Strikes on infrastructure linked to South Pars, the giant gas field that underpins much of Iran's electricity generation, underscored how disruptions to gas production can quickly affect power supplies.

The conflict also exposed broader risks facing Gulf energy systems. Iranian attacks on facilities linked to Qatar's energy sector demonstrated how regional infrastructure could become vulnerable during periods of military escalation.

As a result, the proposed interconnection carries both economic and strategic significance. It could strengthen resilience and create incentives for cooperation, but it would also add another piece of critical infrastructure exposed to future crises.

Opportunities and limits

An Iran-Qatar electricity link could provide benefits for both countries.

Cross-border interconnections can improve grid stability, reduce reserve requirements and provide emergency support during disruptions. Over time, they may also help integrate renewable energy by balancing supply across larger networks.

The technical challenges are significant but manageable. A subsea high-voltage connection would require substantial investment, converter stations, cybersecurity protections and close operational coordination.

The larger obstacles may be political and financial.

US sanctions could deter banks, insurers and international engineering firms from participating in Iran-linked infrastructure projects. Broader Gulf integration would face additional political hurdles after years of regional tension.

Outlook

The Qatar interconnection ultimately reveals as much about Iran's domestic weaknesses as its regional ambitions.

Faced with sanctions, underinvestment and a worsening electricity crisis, Tehran has increasingly turned to energy diplomacy, regional trade and cross-border infrastructure as tools for managing pressure at home.

The project could strengthen Iran-Qatar ties, improve energy resilience and create a modest opening toward wider regional cooperation.

But its significance lies less in the electricity it may eventually carry than in what it reveals about Iran's broader predicament: a country seeking regional influence through energy diplomacy while increasingly dependent on external partnerships to manage mounting pressures at home.

Built on undefined terms, deferred obligations and subjective judgments of compliance, the agreement risks becoming as much a source of future disputes as a mechanism for resolving them.

The fourteen-paragraph document promises an end to hostilities, the reopening of the Strait of Hormuz and a pathway toward broader understandings on sanctions and nuclear issues. Yet it remains a political understanding rather than a legally binding treaty, with few of the mechanisms typically used to define obligations, resolve disputes or enforce compliance.

President Trump signed the document at the Palace of Versailles on June 17, while its formal inauguration by Vice President JD Vance, Speaker Mohammad Bagher Ghalibaf and Foreign Minister Abbas Araghchi is expected in Switzerland on June 19.

In the sombre record of diplomatic striving, where the hopes of nations have often foundered on imprecise commitments and competing interpretations, the Islamabad MOU deserves close attention. A close reading reveals vulnerabilities that may yet undermine its promise.

Consider Article 1, which proclaims an “immediate and permanent termination of military operations on all fronts, including in Lebanon,” while committing the parties to respect Lebanese sovereignty and territorial integrity. On the surface, the language appears definitive. Yet Israel, which is not a party to the agreement, continues to view its positions in southern Lebanon as necessary for its security, while Washington has repeatedly affirmed Israel’s right to self-defense.

Tehran and its allies may read the clause as implying eventual Israeli withdrawal. The facts on the ground, and the separate track of Israel-Lebanon negotiations, suggest a more complicated reality. Key terms such as “all fronts,” “permanent,” and “territorial integrity” remain undefined. No mechanism exists for arbitration or adjudication when disagreements arise. Instead, implementation is largely deferred to future negotiations, even as early Iranian steps on nuclear issues or maritime security may unlock sanctions waivers and access to frozen assets.

This pattern of ambiguity runs throughout the document. The nuclear status quo is to be maintained pending a final agreement. Oil waivers and access to restricted assets are linked to implementation of initial commitments, yet the standard for satisfactory performance remains largely a matter of political judgment.

The sixty-day timetable for negotiating a broader agreement, which may be extended by mutual consent, creates space for diplomacy. It may also give both sides time to consolidate military, political or diplomatic leverage while negotiations continue. President Trump himself has emphasized that the MOU is not a final agreement and has left open the possibility of renewed military action should diplomacy fail.

"Article 5 requires the Islamic Republic to use its 'best efforts' for toll-free passage in the Persian Gulf through Hormuz for sixty days. It also commits the Islamic Republic to keeping the strait open while proposing a future convention among the Persian Gulf littoral states and the Islamic Republic to regulate safe and free navigation in this semi-closed sea.

The experience of the 2018 Convention on the Legal Status of the Caspian Sea offers a sobering precedent. After protracted negotiations, the Islamic Republic found itself a minority of one and was compelled to make substantial compromises on its claims.

A similar convention for the Persian Gulf could produce a comparable outcome, even with potential alignment from Qatar and Oman, leaving a bitter taste among many Iranians.

Article 6 calls for the development of a reconstruction and economic development plan worth at least $300 billion. Yet the figure itself remains largely aspirational. The text provides little indication of whether such funding would take the form of grants, loans, private investment or credit facilities.

The distinction matters. While supporters present the provision as evidence of a coming economic windfall, the eventual financial structure could look very different. Much will depend on future negotiations, sanctions policy and the willingness of regional and international actors to participate.

Graver still are the silences. Ballistic missiles and Iran’s regional proxy network, including Hezbollah, receive little explicit treatment in the written text. Issues that have long stood at the center of regional security debates appear to have been deferred, addressed only indirectly or left to subsequent negotiations.

In a relationship shaped by decades of mistrust, such omissions inevitably invite competing interpretations. Without automatic enforcement mechanisms, expanded verification provisions or clearly defined snapback procedures, disputes over compliance may simply return to the negotiating table.

News from Tehran suggests that ultra-hardliners have reacted with fury, while more pragmatic figures around Speaker Ghalibaf appear to regard the agreement as necessary breathing space for a battered Islamic Republic. Israel, meanwhile, has shown little inclination to subordinate its security calculations to diplomatic assurances alone.

Absent precise definitions, objective benchmarks and credible dispute-resolution mechanisms, each side retains considerable latitude in interpreting its obligations. Tehran may claim compliance while continuing activities that Washington views as problematic. Washington may delay or withhold relief based on concerns over enrichment, regional activities or implementation.

At its core, the agreement links performance to relief while providing few objective standards by which performance will be judged. The result is a framework that relies heavily on political trust at a moment when trust remains in short supply.

The Islamabad MOU may succeed in reopening the Strait of Hormuz, reducing tensions and lowering immediate risks of escalation. It may even create the conditions for a broader settlement.

But the architecture of the document suggests that its ultimate durability will depend less on the promises it contains than on the unresolved questions it leaves behind. The coming weeks in Geneva and beyond will determine whether those ambiguities serve as bridges to a lasting agreement—or pathways back to confrontation.