The first round of the presidential election took place on 28th June, with a further round of voting now set for 5th July after no candidate won 50% of the vote. The second round will see surprise reformist Masoud Pezeshkian compete against arch hardliner Saeed Jalili; they polled 43% and 39% respectively. The Guardian Council had approved six candidates this month to run in Round One – its filter ensuring the election was a battle mainly among hardline figures, with the decision-making process increasingly controlled by conservative stakeholders. They aim to secure a successor to Khamenei that aligns with the Ayatollah’s ideology. This time a high turnout had become more important for the regime than who wins; unfortunately for the regime, a new all-time low of 40% of the electorate voted, underscoring the disenchantment most Iranians feel.
Helicopter Crash. On 19th May a helicopter carrying Iranian president Ebrahim Raisi, Iranian foreign minister Hossein Amir-Abdollahian, and other Iranian officials crashed in a mountainous region of northwest Iran, resulting in the deaths of all on board.
In the short term, the main impacts will be felt domestically rather than internationally. The supreme leader holds the true coercive power in Iran, not the president. However, Raisi was a trusted ally and ideological partner to the revolutionary clerical establishment. Many saw him as a potential successor to the current supreme leader, Ayatollah Ali Khamenei. Raisi’s death may lead to renewed competition for the position, though this does not necessarily mean that Khamenei’s son Mojtaba, seen as Raisi’s main rival, will rise to power. There is significant resistance to inherited power in Iran, and the clerical establishment prides itself on a meritocratic system, which Mojtaba’s nepotistic rise would undermine more than Raisi’s would have.
The most likely outcome is quiet competition within the state’s coercive apparatus, with the Islamic Revolutionary Guard Corps, military, and intelligence figures vying for power. This could marginalize clerical leadership over the long term. This trend has been ongoing for over a decade, as popular discontent with clerical rule grows among Iran’s young and increasingly impoverished population. A revolution is possible but unlikely. Many Iranian insiders believe this is improbable because many Iranians feel they are still suffering from the aftermath of the 1979 revolution. Additionally, the Arab Spring does not inspire confidence in a popular revolution. The most likely scenario is no significant change in the near term. A political figure might emerge from within the government promising reform, better governance, and economic improvement, but the extent of real change remains unclear. The likelihood of radical upheaval is low.
The core elements of Iranian foreign policy, such as the “axis of resistance” and efforts to build relationships with China and Russia, will remain unchanged. However, regional dialogue might suffer as Amir-Abdollahian, a skilled diplomat and Arabic speaker, had built some trust with Iran’s neighbours. It will take time to rebuild these ties amid the current uncertainty.
The crash being the result of an assassination is unlikely but not impossible. Raisi had many enemies both domestically and internationally, but his death does not significantly alter the power dynamics. Poor weather conditions, which hampered rescue efforts, are a plausible cause of the accident. The helicopter, a US built model purchased before the 1979 revolution, is intended to fly only in visual flight conditions. The Iranian government struggles to obtain modern safety equipment and spare parts, making it improbable that other countries would have flown their leaders in similar conditions.
Funeral, International Response & Elections. Iran’s Supreme Leader led prayers in Tehran on 22nd May at Raisi’s funeral as regional representatives flew in. State TV showed Khamenei pray with tens of thousands of mourners filling the streets in Tehran. Raisi was buried in his home city of Mashhad two days later. The coffins of Raisi, Foreign Minister Hossein Amirabdollahian, and other officials who died in Sunday’s crash near the Azerbaijan border were passed over the heads of weeping mourners. Approximately 40 foreign dignitaries, including officials from Russia and China, attended, while Qatar’s Emir and the foreign ministers of several Gulf countries travelled to Iran to offer condolences. Saudi Arabian Foreign Minister Prince Faisal bin Farhan bin Abdullah attended, marking his second visit to Tehran since the rivals agreed last year to re-establish ties after years of hostility. Iran-backed Hamas leader Ismail Haniyeh and Hezbollah’s deputy chief Naim Qassem were also present. “I am here on behalf of the Palestinian people, in the name of the resistance factions of Gaza … to express our condolences,” Haniyeh told the crowd, who chanted “Death to Israel” in response. The US State Department and Office of the EU’s High Representative offered sympathies, a move which was quickly criticised by elected politicians in both the US and Europe.
The clerical establishment quickly moved to organize the election of a successor. The vote, on 28th June, to replace Raisi could further undermine the regime’s legitimacy amidst growing public dissatisfaction. Raisi’s death comes during escalating tensions between the clerical leadership and society, worsened by increasing political and social restrictions and a deteriorating economy. An increasing number of voters have avoided recent elections, a troubling sign for the leadership, which views voter turnout as a credibility test for the Islamic Republic. Yet another low turnout will embarrass the regime.
Assembly of Experts. The new Assembly of Experts held its first session as scheduled this month. The new Assembly (the body in charge of appointing the Supreme Leader) elected a new speaker to replace Ahmad Janati, its 97-year-old former charman, replacing him with 92-year-old Ayatollah Mohammad Movahedi Kermani by 55 votes to 33. Kermani is close to Supreme Leader Ayatollah Ali Khamenei. Raisi and Ali Al-Hashem’s (who was also on the helicopter) deaths create two spaces on the Assembly. Meanwhile, the Iranian Majlis (parliament) held its last session, with the first session of the newly elected assembly set to take place in the first week of June.
Rial. The Iranian rial ended the month up slightly at 587,000 IRR on the black market.
Gas Agreement. Turkey has signed an agreement with Azerbaijan to import and transit Turkmen natural gas, effectively excluding Iran from Turkmen gas transit routes to the Mediterranean and Europe. On 15th May, in Istanbul, Turkish and Azerbaijani energy ministers signed a comprehensive deal that includes capacity expansion for several natural gas pipelines and the transit of Turkmen gas.
Oil Scandal. Nearly 50,000 tons of expired and contaminated cooking oil have been distributed in Iran, according to investigative journalist Yashar Soltani of Memari News. The oil was part of a nearly 100,000-ton shipment purchased by Iran’s state purchasing agency from Turkey and Argentina in August 2021. Tests conducted by Iranian state laboratories found the oil contained agricultural toxins and pesticides, rendering it unfit for consumption. Despite these findings, a technical committee released half of the shipment in September 2022, resulting in 47,000 tons entering the Iranian market while the remainder sits unreleased at Bandar Abbas port. Officials have denied the allegations, asserting that no product can be sold without approval from the Iran Food and Drug Organization (IFDA) and the Iran National Standards Organization (INSO). However, Soltani provided further evidence, emphasizing IFDA’s responsibility and demanding explanations for the already distributed contaminated oil. Soltani, known for exposing corruption, has faced legal challenges for his investigative work in the past.
Port deal. India and Iran have signed a deal allowing India Ports Global (IPGL) to develop and manage the Iranian port of Chah Bahar for 10 years. The agreement permits IPGL to oversee the transit of Indian goods to Afghanistan and Central Asia from the port, on Iran’s southeastern coast. Since 2016, IPGL has invested $85 million in Chah Bahar, aiming to create a trade hub rivalling Chinese-funded Pakistani ports – see Gwadar circa 150km eastward. Despite delays due to financial and logistical challenges, the new agreement anticipates the investment to reach $370 million, with a US sanctions waiver obtained in 2018.
The port’s strategic importance is highlighted by India’s relatively low trade with Central Asia and Afghanistan, contrasted with China’s significant trade volumes in the region. Last year, Indian trade with Central Asia and Afghanistan remained at $2 billion, whereas China’s trade with Central Asian states reached $90 billion. The Chah Bahar-Zahedan railway, crucial for connecting the port to Iran’s national railway network, remains underdeveloped, hindering full utilization of the port.
Despite logistical challenges, Chah Bahar port handled over 4.2 million tons of goods last year, mostly related to Iran-India trade. India’s exports to Iran grew by 14% to $1.66 billion in 2023, while imports from Iran increased by 45% to $672 million.
Nothing significant to report.
The impact of this month’s events will play out over years, rather than weeks or months. Raisi’s reputation, the manner of his coming to power, and the constitutional limits on the office of the Presidency, point to limited effects in the short term. Longer-term it opens up the Supreme Leader succession battle; an unwelcome development for the Khamenei, but an opportunity for Raisi’s (hardline) rivals.