Iran protests signal nation’s biggest event since 1979 as Islamic Revolutionary Guard Corps influence weakens
Updated ,first published
As protesters take to the streets of Iran nightly, leaders in the region and around the world are grappling with the possibility of the overthrow of the Islamic Republic, a seminal event that would transform global geopolitics and energy markets.
Supreme Leader Ayatollah Ali Khamenei’s regime has endured protests many times, but the demonstrations that began two weeks ago are spreading. By some accounts, hundreds of thousands of people defied authorities’ threats and a brutal crackdown on taking to the streets over the weekend from the capital Tehran to dozens of other cities in the country of 90 million people.
They are applauded by US President Donald Trump after the capture of Nicolás Maduro, the former president of Venezuela. The US leader has repeatedly threatened to strike Iran in recent days and suggested that America was back in the business of regime change.
World leaders and investors are watching closely. A White House official said US commanders briefed Trump on military strike options. Brent crude rose more than 5 percent to above $63 a barrel on Thursday and Friday as investors priced in the possibility of supply disruptions at OPEC’s fourth-largest producer.
“This is the biggest moment in Iran since 1979,” said former CIA senior Middle East analyst William Usher, referring to the revolution that gave birth to the Islamic Republic, upended the balance of power in the region and led to decades of hostilities between Tehran and the United States and its allies.
“The regime is in a very difficult situation right now, and the main driver is the economy. I think they have a narrowing window to regain control, and they have diminished tools to do so.”
More than 500 protesters killed in the last two weeks, according to US-based report Human Rights Activists News AgencyMore than 10,000 people have been arrested in demonstrations triggered by the currency crisis and economic collapse, but the focus is now also on the regime.
Authorities have been trying to block internet and telephone networks since Thursday in an attempt to quell growing anger among Iranians over government corruption, economic mismanagement and repression. Foreign airlines canceled flights to the country.
Late on Monday (AEDT), Iranian Foreign Minister Abbas Araghchi told foreign diplomats that the “situation was completely under control” following the bloody crackdown on protests, but offered no evidence to support this statement.
Pro-government demonstrators filled the streets on Monday, AP reported. Iranian state television reported that the crowd, numbering tens of thousands, chanted “Death to America!” shouted slogans. and “Death to Israel!”
Others shouted: “Death to the enemies of God!” Iran’s attorney general has warned that anyone participating in anti-government protests will be considered “enemies of God” and punishable by death penalty.
Trump said he wanted to negotiate with Washington after Iran threatened attack. While Tehran had no direct reaction to Trump’s comments, Araghchi said Iran was “open to diplomacy.”
Yet the US president’s warnings that he will attack Iran if it kills peaceful protesters come as he escalates his assault on the post-World War II global order with striking assertions of US power, including seizing Venezuelan oil after taking on Maduro and threatening to seize Greenland from NATO ally Denmark.
Israel, which battered Iran during a 12-day U.S.-backed air war in June, is in close contact with European governments about the situation on the ground, according to a senior European official who asked not to be named discussing private conversations.
If the regime falls, the official added, it would be a blow to Russian President Vladimir Putin, who would lose another foreign ally following the ouster of Maduro this month and Bashar al-Assad in Syria a year ago.
For oil traders, the risks are significant. But it is unclear whether there is unrest in Khuzestan, the main oil-producing region, and so far there is no sign of crude oil exports decreasing. On Saturday, the former shah’s son, Reza Pahlavi, who is in exile in the United States and positions himself as opposition leader, called for a strike by oil workers. The oil strikes of 1978 were one of the death knell of his father’s monarchy, as they had an immediate impact on the economy.
Arne Lohmann Rasmussen, principal analyst at A/S Global Risk Management, which helps clients manage fluctuations in energy markets, said “the focus of the market is now shifting to Iran.”
“Concerns are also growing in the market that the US under Trump may try to use chaos to overthrow the regime, as we saw in Venezuela.”
‘The best outcome would be a complete change of government. The worst outcome would be continued civil conflict.’
Mark Mobius, emerging markets investor
The White House is on a roll following the tactical success of the operation against Maduro, as well as Trump’s decision to bomb Iran’s nuclear facilities at the end of the 12-day war. US officials are also increasing pressure on Denmark to cede control of Greenland; This signals the administration’s desire to make further forays abroad.
Despite all the risks, Trump may attempt to overthrow a government that has been the arch-enemy of the United States and Israel for more than 45 years.
“The balance of power will shift dramatically,” veteran emerging markets investor Mark Mobius said of the possible collapse of the Islamic Republic.
“The best outcome would be a complete change of government. The worst outcome would be continued internal conflict and continued rule by the current regime.”
But Trump has at times opposed U.S. adventurism in the region, where the overthrow of longtime U.S. foe Saddam Hussein in Iraq unleashed a generation of chaos and terrorism that cost hundreds of thousands of lives and trillions of dollars.
Potential power vacuum
It’s exactly this kind of potential power vacuum that worries Arab leaders in the Gulf Cooperation Council (GCC), regional officials say.
The group, which also includes Saudi Arabia, the United Arab Emirates and Qatar, often views Iran as an enemy, but its members have sought to improve relations in recent years to ensure Tehran does not react by attacking any Israeli or US military action. The specter of the Arab Spring, in which dictators are overthrown and chaos ensues, looms large in the region.
‘A collapse seems unlikely at the moment. ‘The Iranians fear what they see as the chaos wreaking havoc in neighboring Iraq and Syria.’
Dina Esfandiary, Middle East analyst
Iran has warned that if attacked, US assets and Israel in the region, where it has deep commercial ties and where tens of thousands of troops are deployed, would be “legitimate targets for us”.
The Islamic Republic has been severely weakened in the past two years due to its stagnating economy, high inflation and Israeli attacks on both it and its proxies. But it maintains a large and sophisticated arsenal of ballistic missiles capable of hitting targets across the Middle East, from military bases to oil facilities, and the regime still has the support of the country’s numerous security forces, including the crucial Islamic Revolutionary Guard Corps.
Ellie Geranmayeh, deputy program director for the Middle East and North Africa at the European Council on Foreign Relations, said the worst outcome for the Gulf Cooperation Council and countries such as Türkiye and Pakistan would be chaos in Iran. This is a possibility made all the more possible by the sheer diversity of Iranian protesters, who include everyone from urban secular elites to religious conservatives and lack a unifying leader.
“With the Gulf Cooperation Council’s rapprochement with Tehran over the last few years, there’s been a sense that the devil you know is better, rather than complete chaos or an unknown power structure that’s foreign to them,” Geranmayeh said.
Attacks by the United States and Israel could strengthen the government and reduce the appeal of the protest movement. In June, there was a surge in nationalism as the Jewish state and Washington dropped bombs.
Bloomberg Economics Middle East analyst Dina Esfandiary said the Islamic Republic likely won’t survive in its current form until the end of 2026.
The most likely scenario, he said, would be a leadership change that largely preserves the system or a coup by the Revolutionary Guard, which would mean more social freedoms (the organization is led by generals rather than clerics) but less political freedom and a more militaristic foreign policy.
The chances of a revolution are still quite low, he said.
“A collapse seems unlikely at the moment,” he said. “Iranians fear what they see as chaos wreaks havoc in neighboring Iraq and Syria. More importantly, the government is cracking down.”
Collapse ‘wouldn’t be nice’
On Sunday, President Masoud Pezeshkian, a former heart surgeon and moderate relative of the Iranian government’s top brass, wrote a conciliatory note, offering his condolences to the families affected by the “tragic consequences.”
“Let’s sit together, hand in hand, and solve the problems,” he said in a statement on state television.
Many protesters are unlikely to believe him. The religious leader, a much more powerful figure, and the security forces are becoming increasingly belligerent, abolishing the death penalty and making it clear that they are ready, as always, to respond with brutal force.
“I don’t think the collapse of the regime would be pleasant,” said former CIA analyst Usher. “In the short term, I can imagine there will be some fragmentation in the country as ethnic minority groups and some provinces seek autonomy from Tehran. The Revolutionary Guard will fight strongly to save the regime, so I think the possibility of large-scale violence will be strong.”
Paul Wallace, Golnar Motevalli, Fiona MacDonald, Ben Bartenstein and Peter Martin – Bloomberg
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