Iran faces growing instability as economic failures, leadership succession loom

In a recent article, Time highlights the crumbling regime of Iran, grappling with a series of internal and external crises that threaten its stability. 

Iran has faced a series of setbacks over the past few months, weakening its ability to threaten regional rivals and enemies. Israel’s security forces have severely disrupted the leadership of two of Iran’s strongest allied militias: Hamas in Gaza and Hezbollah in Lebanon. The unexpected fall of Bashar al-Assad's government in Syria has deprived Iran of its key state ally and cut off the crucial supply route to Hezbollah. Although Yemen’s Houthi rebels continue to attack shipping in the Red Sea, Israel has successfully targeted their fighters, including inside Yemen. Additionally, Iran has realized that its key ally, Russia, is too focused on the situation in Ukraine, reducing its support. In essence, Iran has witnessed the collapse of its regional influence and its so-called Axis of Resistance.

In 2024, Israel's Prime Minister Benjamin Netanyahu authorized direct strikes on Iranian soil, fully aware that Tehran had limited options for retaliation. Meanwhile, Donald Trump, who has consistently advocated for "maximum pressure" on Iran, has returned to the presidency. While he is not seeking an all-out war with Iran, he will be closely monitoring any signs that Iran’s leadership may pursue a nuclear weapons program. Both the US and Israel may also be tempted to escalate their pressure into military action.

Iran’s internal issues could present an even greater challenge to the country’s leadership. Struggling under the weight of sanctions, its economy is faltering. The currency is rapidly losing value, inflation hovers around 30 per cent, and many Iranians are becoming increasingly frustrated and angry.

Public frustration in Iran has recently centered around an energy crisis that has led to intermittent blackouts and the closure of schools and businesses to conserve natural gas, which powers most of the country's energy needs. Despite holding the world's second-largest natural gas reserves, Iran faces severe shortages due to poor management and corruption. As a result, Iran resorts to burning oil, contributing to some of the most polluted cities globally.

The regime's continued efforts to reimpose strict social rules and censorship have reignited protests, reminiscent of the 2022-2023 "Woman, Life, Freedom" movement. For many Iranians, the aggressive enforcement of hijab laws by police adds further insult to the economic hardship caused by Iran's isolation. Voter turnout in last year’s presidential election was just 50 per cent, a notably low figure for Iran. Frustration is even growing among the regime's hardliner base, particularly over Iran's failure to prevent Syrian President Bashar al-Assad’s humiliating retreat to Moscow, despite billions spent to support Assad’s survival during the Syrian civil war. That costly investment is now lost.

It has fallen to Masoud Pezeshkian, Iran’s “reformist” president, to address these growing failures. Despite his challenges, Pezeshkian retains crucial institutional backing from Supreme Leader Ali Khamenei and the politically influential Speaker of Parliament, Mohammad-Bagher Ghalibaf. However, an increasing number of Iranians, once hopeful for positive change under his leadership, now view him as ineffective and weak.

Amid these issues, a looming question grows larger: Who will take power when Khamenei, now 85 and in poor health, passes away? Key figures within the Iranian Revolutionary Guard Corps and the clerical establishment have spent years preparing for succession, but this will mark the first transfer of supreme power in Iran since 1989 and only the second in the Islamic Republic’s 45-year history.

Some within the US and Israeli governments argue that the Iranian regime is teetering on the edge, and a well-timed push could push it over the brink. However, while Iran may be a wounded lion, its substantial missile and drone capabilities ensure its ability to strike back. If its leaders feel cornered, either domestically or internationally, they could take aggressive actions that pull the region—and the US—into another conflict. This is how Iran’s internal weakness could become a global concern.

By Naila Huseynova