SANCTIONS, CRISIS, PROTESTS...

Street protests are roiling Iran once again. Protesters are against the drastic rise in the price of basic necessities. The events can also be described as a manifestation of the crisis that Iran is going through amid the effective Western sanctions, primarily due to the failure to resolve the issue of Iran's nuclear programme.

What’s the effect of abandoning the subsidies?

Protests took place in a number of cities across a wide range of provinces, including in Isfahan, Khuzestan, Lorestan, Ardabil and so on. They were accompanied by clashes with security forces, which, according to media reports, claimed the lives of at least six demonstrators.

Protesters are against the price increase following the government's removal of subsidies on basic necessities. According to official reports, the government paid 900 trillion tumans (about $30 billion) in subsidies annually. Iranian President Ibrahim Raisi explained the move as a necessary measure to counter the economic crisis. However, it increased the cost of flour products, vegetable oil, dairy products, eggs and poultry significantly (almost fourfold in some cases).

Raisi's call not to panic, nor his promises to issue electronic coupons and to provide a special allowance to the needy in the near future to contain the consequences of rising prices could not calm down the population. Moreover, the demands of protesters have gradually become political. There is a video clip on social media with protesters burning the images of Iranian leaders. However, the politicisation of protests is less about the manifestation of social discontent than the internal struggle in Iran.

In fact, the latter has periodically accompanied widespread protests observed in Iran. For example, in 2019 and 2021, when the population protested against the rising fuel prices and water supply problems, respectively. The demands voiced then and now have gone beyond socio-economic problems targeting the country's leadership itself.

Amid the rising prices and ongoing protests, there is also criticism of the conservative Raisi government. Circles close to the president try to justify his course by blaming the previous government for the current price crisis, the reformist president Hassan Rouhani and his administration.

Meanwhile, the current crisis is also associated with external factors, as it was triggered by the removal of subsidies primarily on imported wheat. Iranian Minister of Agriculture Javad Sadatinejad has explicitly referred to the events in Ukraine with this regard. Iranian authorities claim that it was the war in Ukraine, a country that is one of the world's largest grain exporters, that caused a disruption in the global supply chain. As a result, the war has contributed to the increase in food prices in Iran and throughout the Middle East.

However, it is also clear that the actual collapse of relations between Russia and the West, directly linked to the war in Ukraine, also plays an instrumental role in the current crisis in Iran. This aspect affects, above all, Iran's position as one of the world's richest countries in energy resources.

In fact, Iran, which has been struggling for years with US sanctions imposed because of its nuclear programme, is developing its economy largely through oil and gas sales to China and other Asian countries. However, with the West imposing almost total sanctions on Russia, including the ban on imports of Russian oil and the EU considering a gradual introduction of embargo on Russian hydrocarbons, Moscow has turned its export routes eastwards, channelising oil and gas supplies primarily to China. Obviously, this reduces the Chinese demand for Iranian energy resources, because Beijing now gives preference to Russian supplies which are better priced. It is no coincidence that Hamid Hosseini, a board member of Iran's Union of Petroleum, Gas and Petrochemical Exporters, assessed Russia's redirection of nearly half of its exports to Southeast Asia, particularly China, as "a huge potential threat to Iranian oil exports”.

The same is true for the Iranian gas sector. Main buyers of Iranian LNG are Afghanistan, Pakistan and Turkey. But even those supplies have actually come under threat because Russia is willing to sell its gas to these countries at a comparatively cheap price.

With trends in the global oil and gas market so unattractive for Iran, only the removal of US sanctions can help its economy. But that depends on the resolution of Iran's nuclear programme.

Will the nuclear deal be restored?

Undoubtedly, Tehran cannot abandon its fundamental principle of defending the right to develop nuclear energy for peaceful purposes in its negotiations with the West. But it is also clear that the West, as well as other participants of the process, China and Russia, are interested in Tehran providing clear guarantees for the peaceful use of nuclear energy. Therefore, it is relevant to continue negotiations in Vienna to restore the nuclear deal, which promises Iran a chance to escape from international, primarily American, sanctions and to overcome the serious economic crisis caused by them. This is particularly important for Iran amid periodic mass protests due to the economic crisis.

Meanwhile, the Vienna talks that started in April 2021 to revive the Iranian nuclear deal, the Joint Comprehensive Plan of Action (JCPOA) on Iran's nuclear programme, have so far failed to achieve a breakthrough. Tehran has insisted that the US, which withdrew from the deal under former President Donald Trump, provide guarantees that the restoration of JCPOA would not abandon its terms putting an end to the practice of imposing sanctions on Iran. Actually, this complies with Tehran's general approach to the issue, which means it intends to continue the talks on the resumption of the deal while it ensures "full and comprehensive" protection of Iran's national interests. Primarily, in terms of economic development and the right to pursue a nuclear programme.

In turn, Washington assures its commitment to President Biden's goal of achieving the resumption of the JCPOA. However, this does not imply the complete removal of anti-Iranian sanctions. For example, the White House rejected Tehran's demand to remove the Iranian Revolutionary Guard Corps (IRGC) from the list of foreign terrorist organisations.

As a result, the talks with Iran, which now continue with the participation of Britain, France, Germany, Russia and China following the withdrawal of the US from the deal, is virtually in limbo. Moreover, there is a growing perception in the US that the Vienna talks are on the verge of collapse.

However, the recent visit of Enrique Mora, the EU coordinator and deputy secretary general of the European External Action Service, to Tehran gives reason to hope for success in reviving the JCPOA as the only chance to avoid escalating tensions around Iran and its nuclear programme. After the talks, Iranian Foreign Ministry spokesman Saeed Khatibzadeh described Mora's visit to Iran as a sign confirming the right direction of the negotiations. Iranian Foreign Minister Hossein Amir Abdollahian said that "a good and credible result is close, if the US makes a decision and fulfils its commitments."

A somewhat optimistic signal also came from Washington. In response to the recent protests in Iran, the US State Department has in fact supported the demonstrators, claiming a legitimate right "to peaceful assembly and freedom of expression online and offline without fear of violence and retaliation". But at the same time, the Biden administration has also made clear that it was ready to continue indirect talks with Iran in Vienna on restoring the nuclear deal.

This state of mind in the peace process around Iran's nuclear programme suggests that contacts between international negotiators and Iran may intensify in the near future. But will they bring concrete and positive results? The answer to that question affects not only the future of peace in Iran and the entire region, but also the resolution of social problems for millions of Iranians who have been living under pressure from Western sanctions for many years.