Iran is currently grappling with a severe energy crisis, which has led to widespread power outages, forcing schools and government institutions to close as of December 2024.

This crisis has been exacerbated by harsh winter conditions and years of underinvestment in the energy sector, compounded by heavy sanctions imposed by the West over Iran's nuclear program.

These sanctions have significantly hindered efforts to modernize the energy infrastructure, resulting in a lack of foreign investment.

The impact of rolling power outages is already being felt in the manufacturing sector, where increased production costs threaten job losses, particularly in industries like household appliances.

In February 2024, attacks on major gas pipelines, reportedly attributed to Israel, disrupted gas supplies and led to outages in five provinces.

Although the Iranian government briefly mitigated the impact of the pipeline damage using emergency reserves, this has left them with a depleted energy supply.

Iran's Supreme Leader Ali Khamenei has attributed these setbacks to Israel and the U.S., maintaining a commitment to strengthen the Axis of Resistance despite ongoing challenges.

The ousting of Syrian President Bashar al-Assad has further complicated Iran's regional influence, making it more difficult to support its proxy groups.

Additionally, Iran's international standing has suffered due to regional conflicts, particularly as Hezbollah in Lebanon faces setbacks against Israel.

Mismanagement, corruption, and artificially low energy prices have also contributed to Iran's inability to recover from the ongoing energy crisis.

The economic situation is dire, with the rial's value plummeting to 777,000 to $1 last week, marking a significant decline since the election of US President Trump in November 2024.