Soon after the June 18 Presidential Elections, which are perceived as biased and manipulated by many Iranians, a group of oil industry employees began a labor strike. They were protesting difficult work conditions, low wages for employees of private contractors which provide services to the oil ministry and the petrochemical ministry. Since June 19, many other labor organizations have either joined the strikes or have expressed support for the strikes. Such a widespread labor strike in the oil and gas sector is unprecedented and it represents a major challenge to the ruling Islamic regime. Several labor groups have pledged to join these strikes by June 30th if government does not make concessions.
These strikes, coming so soon after Ebrahim Raisi won the elections, pose several challenges to the ruling regime. First, oil and gas sector is the most important sector for the government as it is the source of oil and gas production which is the backbone of Iran's economy. Two immediate threats are that the strikes might disrupt oil and gas production and they might spread to refineries and petrochemical units. If this happens, Iran will not be able to export oil and gas, which will disrupt oil revenues. Without oil revenues the government cannot cover its expenses.
The labor strikes can also disrupt production of oil and gas products for domestic consumption. A shortage of oil and gas products such as gasoline and natural gas for households and industry can paralyze the economy and cause widespread discontent. The people are already angry because of difficult economic conditions and this can intensify their rage.
So far the demands of striking employees are limited to economic concerns but a diverse group of economic and business associations are joining and it is very likely that they might make political demands. In 2018 small protests about inflation and unemployment quickly morphed into mass protests against dictatorship and political repression. The government reacted with violence and approximately 1500 people were killed before the protests were suppressed.
As these labor strikes go beyond the oil and gas sector and spread to other sectors we might witness a similar evolution of demands. As of June 27th, 2021, the association of retired government employees and the business association of milk producers had staged protests in several cities labor organizers have called for more strikes after June 30th.
Reaction of the government: So far as of June 27th the government has not reacted by mass arrest or violence to the protests. Last week 700 striking workers were terminated but no significant reaction other than that. The government's cautious response so far is partly responsible for the willingness of so many labor groups to express solidarity and start of additional strikes. The former president Mahmoud Ahmadinejad who boycotted the presidential election, has warned the ruling establishment not to ignore the demands of the striking workers. At the same time the, it will be v very difficult for the government to meet the demands when it is struggling with severe economic sanctions and has to manage with very small oil and gas revenue.
The "Campaign 1400" labor strikes represent a higher appetite for political risks among Iranians. This might be a consequence of the "No Campaign" to the June 18, 2021 Presidential Elections. Election results revealed that more than 50% of eligible voters did not vote and more than 3.6 million votes were blank votes. Ebrahim Raisi was elected with less than 30% of total eligible votes. This outcome was perceived as a political success for the people who boycotted the election. This success has encouraged thousands of people to joint labor strikes and economic protests.
June 28, 2021: The work stoppage and labor strikes in many oil and petrochemical firms has continued. Some workers claim that they have been threatened with termination if they continue the strikes. The striking workers have occupied the labor dormitories of of some firms because they are worried that the firms will hire replacement workers and house them in these buildings. (These firms often operate in remote areas and workers live in dormitories. ) The ministry of petroleum, Bijan Zangeneh has rejected the worker's demands so far. He has argued that they are not government employees. Rather they are managed by private contractors that provide manpower for various government ministries.
One of the demands of the protesting workers is to change their status from being employees of these private contractors to formal government employment. These employees receive lower wages and smaller benefits than the government employees who perform the same tasks in a government organization. In order to reduce its financial burden the government is likely to resist this demand. It is not clear how the government will react if work stoppages cause serious disruption in operations of the oil and petrochemical industries.
July 1st, 2021: The labor strikes appear to have reached a peak and they have not escalated in the past five days. The news coverage of these labor protests also seems to have diminished. The government has neither engaged in mass arrest or violent confrontation with the strikers, nor has it offered any substantial concessions. So the future of these labor protests remain uncertain. It appears that the Islamic regime is cautious about forceful suppression of the protests. This can be due to concern about international reaction or the risk of backlash. For now the government reaction is one of containment and selective promises on labor demands. The outgoing President Rouhani has claimed that the government will address the wage demands of government employees in the oil industry but he has refused to promise anything about the employees of private sector contractors which provide a wide range of services to the oil and petrochemical industry.
July 5th, 2021: The level of labor strikes seem stable and they have not expanded into street mass protests so far. At the same time two other sources of anger and discontent are escalating. The water shortage is reaching intolerable levels in some cities and villages. Households in some areas do not even have access to drinking water because of the severe drought. The power (electricity) shortage is also becoming very severe. In Tehran and some other large cities power outages occur several times a day and without any warning. The darkness caused by these outages at night has created an opportunity for some people to chant anti-regime slogans from their windows in high-rise buildings and apartment complexes. IN the next few weeks the country might also face a new crisis in food security. Many farmers are are involve in meat industry (red meat, poultry, ...) face a severe shortage of feedstock. This can lead to a shortage of milk and meat in the next few weeks.
July 21, 2021: The labor strikes have been overshadowed by mass protests in Khuzestan Province since July 15th. The key grievance of the protestors is lack of water. The region is suffering from an unprecedented water shortage. The protests are gradually spreading to other Iranian cities as well. There is a growing feeling of frustration and discontent in most cities. The government so far has tried to avoid large scale violence but the number of killed and injured protestors is gradually increasing. Large groups of people in various social and economic segments of the society are expressing sympathy with the people of Khuzestan and consider their demand for access to safe water legitimate.
Unlike previous mass protests the ruling regime has not accused the protestors of being anti-revolutionaries or puppets of external enemies. These protests are growing and attracting global attention as the Islamic regime s preparing for the inauguration of the new president, Ebrahim Raeisi, in early August.
July 26, 2021: The Khuzestan protests have morphed into a protest domino during the past 12 days. Two days ago there were protests in Tabriz, (one of the largest cities in Iran) and today protests were reported in Tehran. The spread of protests to large cities is a very significant development. One of the reasons for the spread of this protests domino is that the Islamic regime has been reluctant to use severe coercive force and create mass casualties. As a result most people perceive that the cost of participation in protests is low. This perception will encourage more protests and we might witness the spread of protests to other large cities such as Mashhad, Kerman and Isfahan in the next few days.
August 7, 2021: The water shortage protests that began in the province of Khuzestan are over. The number of arrests and casualties are much smaller than the October 2019 (Aban 1398) protests. The ruling regime was hesitant to cause mass casualties because the underlying cause of the protests enjoyed very broad sympathy even among regime supporters. It became clear that bad water management policy over more than three decade was responsible for the severe water shortage. Now there is a concern that this is a long term crisis and it can emerge in other central and southern provinces such as Isfahan. As the protests were underway Sadegh Zibakalam predicted that these protests will not pose any danger to the regime. He argued that about 20% of Iran's population are willing to support the regime at all cost and they are well armed. The ruling elite is creamy shaken by these protests but there is no indication that they are willing to make any compromise on key policies of the regime such as the struggle against the United States and Israel. The pressure of economic sanctions might force them to accept some types of strategic concessions now that Ibrahim Raisi has begun his presidency.