Iran faces dire energy crisis

According to a Saturday New York Times (NYT) report, Iran is facing a dire energy crisis, forcing schools, colleges, governmental offices, and shopping malls to operate at a reduced capacity. 

The report cited multiple reasons for the situation, including the sanctions imposed on Iran and an Israeli strike on the Islamic Republic.

According to the NYT, citing an official from the country's Petroleum Ministry and Hamid Hosseini, a member of the Chamber of Commerce’s energy committee, a covert Israeli attack last February, which struck two gas pipes belonging to the Islamic Republic, forced the country to use its emergency gas reserves.

Now, Iran reportedly faces a deficit of some 350 million cubic meters a day, with demands surging with the onset of winter.   

“We are facing very dire imbalances in gas, electricity, energy, water, money, and environment,” Iranian President Masoud Pezeshkian said in a televised speech earlier in December, according to the NYT.

Hosseini told the NYT that the country was attempting to “contain the damage because this is like a ‘powder keg’ that can explode and create unrest across the country.”  

Chief of the Islamic Republic's Coordination Council of Industries Mehdi Bostanchi labeled the situation "catastrophic," according to the NYT. 

According to him, the recent week's deficit could cut production in the country by 30% to 50%, costing it billions of dollars. 

“Naturally, the damages from the widespread and abrupt power outage that has lasted all week will be extremely serious for industries,” Bostanchi reportedly noted.

 

Pakistan Naval Ships Visit Bandar Abbas

The Pakistan Navy's Peace and Friendship Squadron docked at Iran's Imam Khomeini Naval Base in Bandar Abbas on Saturday, marking a significant step in enhancing educational and military cooperation between the two neighboring countries.

The fleet, comprising three warships—PNS Azmat, PNS Rasadgar, and PNS Dasht—is on a mission to strengthen the ties between Pakistan and Iran. This marks the sixth visit to the port since 2016, the most recent being in January, 2024.

The arrival of the Pakistani flotilla was celebrated with an official ceremony, attended by commanders from the Imam Khomeini Naval Region, the Pakistani political consul, and the naval attaché in Iran. 

Commodore Omid Moghadam, commander of the Surface Flotilla of the Imam Khomeini Naval Region, expressed his satisfaction with the presence of the Pakistani naval ships in Bandar Abbas. 

"These friendly interactions between the naval forces of allied nations are customary and vital for bolstering our maritime cooperation," he stated. 

Captain Omid Maghami, commander of the Surface Navy Brigade of the First Naval Area, echoed similar sentiments, emphasizing that the presence of the Pakistani warships is a testament to the deepening ties between the naval forces of the two countries. 

"Such friendly exchanges between navies enhance educational and military cooperation, as well as the exchange of maritime experiences," he noted. 

During their four-day stay in Bandar Abbas, the Pakistani naval group will have a busy agenda, including meetings with the commander of the Imam Khomeini Naval Region, paying respects at the martyrs' cemetery, and visiting cultural and social sites in the city. 

The itinerary also features friendly sports competitions between the Iranian and Pakistani naval teams, meetings with political leaders of Hormozgan province, a friendship dinner on board both Iranian and Pakistani warships, and joint military exercises in the waters of the Persian Gulf and the Strait of Hormuz. 

The recent docking of the Pakistan Navy's Peace and Friendship Fleet in Bandar Abbas underscores the commitment of both Iran and Pakistan to fostering stronger military and security ties. 

This visit builds on past agreements, such as those signed during the late President Ebrahim Raisi's 2023 visit to Pakistan, aimed at enhancing security cooperation and paving the way for future collaborations in maritime security and regional stability.

 

Yemeni missile lands in Tel Aviv

According to Reuters, the Israeli military admitted it failed to intercept a missile from Yemen early on Saturday that fell in the Tel Aviv-Jaffa area, and the ambulance service said 14 people received mild injuries.

A spokesperson for Houthis said they had hit a "military target" in the Jaffa area with a ballistic missile.

Paramedics were treating 14 people with minor shrapnel injuries and some were taken to hospital, the ambulance service said in a statement.

The Israeli police reported receiving reports of a fallen missile in a town in the Tel Aviv area.

Houthis have repeatedly fired drones and missiles towards Israel in what they describe as acts of solidarity with Palestinians in Gaza.

On Thursday, Israel launched strikes against ports and energy infrastructure in Houthi-held parts of Yemen and threatened more attacks against the Yemeni group.

 

Taming the Shrewd called Trump

It is as clear as day that the US president has incalculable powers. Despite being an elected president, he is a complete autocrat. He can take many decisions at his own without the approval of the Senate and can veto any decision of the Senate. This right is available to the president under the US Constitution.

In his first term, Donald Trump not only unilaterally withdrew from the nuclear agreement reached with Iran by the remaining superpowers, but also imposed more sanctions at his own. After Iran's protests and the superpowers' surrender, Joe Biden has also been imposing new sanctions on Iran.

After being re-elected as president in the recent elections, he has begun to hint at rare royal decrees to be issued after he takes oath on January 20, 2025.

The first decree is that the BRICS countries will not create their own currency and if they dare to make such a mistake, they will be subject to additional tariffs and will not be able to export their products to the United States.

Israel has broken the backs of Hamas, Hezbollah and Syria at the behest of the US, and today there are heavy attacks on Yemen. There is a growing fear that Iran will be the next target.

At the same time, Trump has announced to impose new tariffs on Mexican and Canadian products exported to the US.

The limit is that Trump has also announced new tariffs on his allies to undermine the European Union.

I have no qualms in saying that the continued silence of Russia and China and the criminal indifference of the oil-producing Arab countries have given the US the courage to do all this.

Remember, those countries that are silent spectators of the destruction of other countries today will have no one to shed tears over their destruction tomorrow.

Iran's economic relations with its neighbors

In recent years, the economic relationships between Iran and its neighboring countries have grown in both complexity and significance. This economic integration is crucial for the development of Iran’s non-oil sector and its broader economic strategy, especially considering the geopolitical challenges that the country faces.

In this article, an effort has been made to explore the current state and future prospects of Iran’s trade with its neighbors, examine key sectors, trade volumes, and strategic partnerships.

As of late 2024, Iran’s non-oil trade with its neighbors has seen a notable increase. Non-oil trade volumes reached US$55.3 billion in the first 11 months of the year, with exports constituting 67 million tons of goods valued at US$25.8 billion and imports amounting to 21.4 million tons valued at US$29.4 billion.

This represents a significant increase in trade flows, driven by an increase in exports of petrochemical products, minerals, and agricultural goods.

Iran’s primary trading partners in the region include Iraq, the UAE, Turkey, Pakistan, and Afghanistan. The UAE and Iraq are Iran’s two largest trade partners, especially in terms of exports.

For example, in the first seven months of 2024, Iran’s trade with Iraq was valued at US$7.6 billion, making it one of the most crucial destinations for Iranian goods. The major exports to Iraq include petrochemicals, cement, and agricultural products, while imports primarily consist of machinery and food items.

Turkey has also maintained its position as a key trading partner, with trade between the two countries amounting to US$9.9 billion in the same period. Iranian exports to Turkey largely consist of natural gas and petroleum products, while imports from Turkey are diverse, including electrical machinery and textiles.

Iran’s geopolitical location, bordered by 15 countries, gives it a strategic advantage in the trade of goods and services. This advantageous position allows Iran to serve as a key transit hub for goods moving between Central Asia, the Caucasus, and West Asia.

In particular, the development of international transport corridors, such as the North-South Transport Corridor (INSTC), which links Iran with Russia, India, and Central Asia, is expected to enhance Iran’s role in regional trade.

Furthermore, the expansion of special economic zones, such as the Lamerd Free Trade Zone, has created new opportunities for businesses to engage in regional trade. This diversification of trade routes and infrastructure investment is expected to foster deeper economic ties with countries in the Persian Gulf and beyond.

Despite challenges, such as global sanctions and regional instability, Iran’s government has focused on expanding its non-oil exports, particularly to its neighbors. This strategy is part of a broader effort to reduce Iran’s dependency on oil revenues and diversify its economy.

The Iranian government’s push for stronger trade relations with Central Asia, Russia, and even countries like Oman and Turkmenistan, is driven by the need for economic diversification and the potential to access new markets. Iran’s trade with Russia, for example, has grown steadily, with recent figures showing a trade volume of US$1.5 billion in 2024.

The economic outlook for Iran’s trade with neighboring countries is promising. The country’s strategic location, combined with increased infrastructure investment and a strong focus on non-oil exports, positions Iran as a key player in the regional economy.

However, the ongoing challenges of sanctions and geopolitical tensions remain factors to consider as Iran continues to navigate its path toward economic diversification.

If these trade relationships continue to strengthen, Iran could significantly enhance its role as a regional economic hub, ensuring long-term stability and growth for its economy.

 

Trump wants EU to buy more US oil and gas or face tariffs

According to Reuters, US President-elect Donald Trump said on Friday that the European Union (EU) may face tariffs if the bloc does not cut its growing deficit with the United States by making large oil and gas trades with the world's largest economy.

The EU is already buying the lion's share of US oil and gas exports, according to US government data, and no additional volumes are currently available unless the United States increases output or volumes are re-routed frm Asia - another big consumer of US energy.

"I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas," Trump said in a post on Truth Social.

"Otherwise, it is tariffs all the way!!!," he added.

The European Commission said it was ready to discuss with the president-elect how to strengthen an already strong relationship, including in the energy sector.

"The EU is committed to phasing out energy imports from Russia and diversifying our sources of supply," a spokesperson said.

The United States already supplied 47% of the European Union's LNG imports and 17% of its oil imports in the first quarter of 2024, according to data from EU statistics office Eurostat.

Trump has vowed to impose tariffs on most if not all imports, and said Europe would pay a heavy price for having run a large trade surplus with the US for decades.

Trump has repeatedly highlighted the US trade deficit for goods, but not trade as a whole.

The US had a goods trade deficit with the EU of 155.8 billion euros (US$161.9 billion) last year. However, in services it had a surplus of 104 billion euros, Eurostat data shows.

Trump, who takes office on January 20, 2025 has already pledged hefty tariffs on three of the United States' largest trading partners - Canada, Mexico and China.

Most European oil refiners and gas firms are private and the governments have no say on where the purchases are coming from unless authorities impose sanctions or tariffs. The owners usually buy their resources based on price and efficiencies.

The EU has steeply increased purchases of US oil and gas following the block's decision to impose sanctions and cut reliance on Russian energy after Moscow invaded Ukraine in 2022.

The United States has grown to become the largest oil producer in recent years with output of over 20 million barrels per day of oil liquids or a fifth of global demand.

US crude exports to Europe stand at over two million bpd representing over a half of US total exports with the rest going to Asia. The Netherlands, Spain, France, Germany, Italy, Denmark, and Sweden are the biggest importers, according to the US government data.

The United States is also the world's biggest gas producer and consumer with output of over 103 billion cubic feet per day (bcfd).

The US government projects that US exports of liquefied gas (LNG) will average 12 bcfd in 2024. In 2023, Europe accounted for 66% of US LNG exports, with the Britain, France, Spain and Germany being the main destinations.

EU exports are dominated by Germany with key goods being cars, machinery and chemicals.

 

Netanyahu eyes Iran, his arch foe

According to Reuters, 2025 will be a year of reckoning for Israeli Prime Minister Benjamin Netanyahu. He is set to cement his strategic goals: tightening his military control over Gaza, thwarting Iran's nuclear ambitions and capitalizing on the dismantling of Tehran's allies - Palestinian Hamas, Lebanon's Hezbollah and the removal of Syrian president Bashar al-Assad.

Assad's collapse, the elimination of the top leaders of Hamas and Hezbollah and the destruction of their military structure mark a succession of monumental wins for Netanyahu.

Without Syria, the alliances Tehran has nurtured for decades have unraveled. As Iran's influence weakens, Israel is emerging as the dominant power in the region.

Netanyahu is poised to zero in on Iran's nuclear ambitions and missile program, applying an unyielding focus to dismantling and neutralizing these strategic threats to Israel.

Iran, Middle East observers say, faces a stark choice: Either continue its nuclear enrichment program or scale back its atomic activities and agree to negotiations.

"Iran is very vulnerable to an Israeli attack, particularly against its nuclear program," said Joost R. Hiltermann, Middle East and North Africa Program Director of the International Crisis Group. "I wouldn't be surprised if Israel did it, but that doesn't get rid of Iran."

"If they (Iranians) do not back down, Trump and Netanyahu might strike, as nothing now prevents them," said Palestinian analyst Ghassan al-Khatib, referring to President-elect Donald Trump. Khatib argued that the Iranian leadership, having demonstrated pragmatism in the past, may be willing to compromise to avert a military confrontation.

Trump, who withdrew from a 2015 agreement between Iran and six world powers aimed at curbing Tehran's nuclear goals, is likely to step up sanctions on Iran's oil industry, despite calls to return to negotiations from critics who see diplomacy as a more effective long-term policy.

Amid the turmoil of Iran and Gaza, Netanyahu's long-running corruption trial, which resumed in December, will also play a defining role in shaping his legacy. For the first time since the outbreak of the Gaza war in 2023, Netanyahu took the stand in proceedings that have bitterly divided Israelis.

With 2024 coming to an end, the Israeli prime minister will likely agree to sign a ceasefire accord with Hamas to halt the 14-month-old Gaza war and free Israeli hostages held in the enclave, according to sources close to the negotiations.

But Gaza would stay under Israeli military control in the absence of a post-war US plan for Israel to cede power to the Palestinian Authority (PA), which Netanyahu rejects. Arab states have shown little inclination to press Israel to compromise or push the decaying PA to overhaul its leadership to take over.

"Israel will remain in Gaza militarily in the foreseeable future because any withdrawal carries the risk of Hamas reorganizing. Israel believes that the only way to maintain the military gains is to stay in Gaza," Khatib told Reuters.

For Netanyahu, such a result would mark a strategic victory, consolidating a status quo that aligns with his vision: Preventing Palestinian statehood while ensuring Israel's long-term control over Gaza, the West Bank and East Jerusalem -- territories internationally recognised as integral to a future Palestinian state.

The Gaza war erupted when Hamas militants stormed into Israel on October 07, 2023, killing 1,200 people and taking 250 hostages, according to Israeli tallies. Israel responded with an air and land offensive that has killed 45,000 people, health authorities there say, displaced 1.2 million and left much of the enclave in ruins.

While the ceasefire pact would bring an immediate end to the Gaza hostilities, it would not address the deeper, decades-old Palestinian-Israeli conflict, Arab and Western officials say.

On the ground, prospects for a Palestinian state, an option repeatedly ruled out by Netanyahu's government, have become increasingly unattainable, with Israeli settler leaders optimistic that Trump will align closely with their views.

A surge in settler violence and the increasing confidence of the settler movement - highway billboards in some West Bank areas bear the message in Arabic "No Future in Palestine" - reflect a growing squeeze on Palestinians.

Even if the Trump administration were to push for an end to the conflict, "any resolution would be on Israel’s terms," said Hiltermann of the Crisis Group.

"It's over when it comes to a Palestinian state, but the Palestinians are still there," he said.

In Trump's previous term, Netanyahu secured several diplomatic wins, including the “Deal of the Century,” a US-backed peace plan which Trump floated in 2020 to resolve the Israeli-Palestinian conflict.

The plan, if implemented, marks a dramatic shift in US policy and international agreements by overtly aligning with Israel and deviating sharply from a long-standing land for peace framework that has historically guided negotiations.

It would allow Israel to annex vast stretches of land in the occupied West Bank, including Israeli settlements and the Jordan Valley. It would also recognize Jerusalem as the "undivided capital of Israel" - effectively denying Palestinian claims to East Jerusalem as their capital, a central aspiration in their statehood goals and in accordance with UN resolutions.

SYRIA AT CRITICAL CROSSROADS

Across the border from Israel, Syria stands at a critical juncture following the overthrow of Assad by Hayat Tahrir al-Sham (HTS) rebel forces, led by Ahmad al-Sharaa, better known as Abu Mohammed al-Golani.

Golani now faces the monumental task of consolidating control over a fractured Syria, where the military and police force have collapsed. HTS has to rebuild from scratch, securing borders and maintaining internal stability against threats from jihadists, remnants of the Assad regime, and other adversaries.

The greatest fear among Syrians and observers alike is whether HTS, once linked to al-Qaeda but now presenting itself as a Syrian nationalist force to gain legitimacy, reverts to a rigid Islamist ideology.

The group’s ability or failure to navigate this balance will shape the future of Syria, home to diverse communities of Sunnis, Shi'ites, Alawites, Kurds, Druze and Christians.

"If they succeed in that (Syrian nationalism) there's hope for Syria, but if they revert to their comfort zone of quite strongly ideologically-tainted Islamism, then it's going to be divisive in Syria," said Hiltermann.

"You could have chaos and a weak Syria for a long time, just like we saw in Libya and Iraq."