Iran's Raisi’s death raises longer-term uncertainty
The president's demise may not affect Iran's energy role, but heightens uncertainty over the country's long-term leadership, writes Nader Itayim
The death of Iran's president, Ebrahim Raisi, in a helicopter crash on 19 May has unleashed a host of questions as to what lies ahead for the Islamic Republic at a time when it is already facing a slew of challenges within its borders and beyond. The nature of Iran's leadership suggests there will be little immediate change, irrespective of who the next president is, but the longer-term impact looks far more uncertain.
The political shock is unlikely to augur any change in the oil market role of Opec's third-largest producer. It has steadily raised covert crude exports to China over the last year, despite being under US sanctions — although it could soon face new challenges on that front. Iran continues to supply its Yemeni proxy the Houthis with weapons to disrupt Red Sea shipping, in opposition to Israel's actions in Gaza. And conflict between Israel and Iran recently became open and direct for the first time, but pulled back from the brink without escalating into a conflagration that could catch the key oil producing region of the Mideast Gulf in its crossfire.
Against this turbulent backdrop, Raisi lost his life travelling back to Iran from Azerbaijan, along with his foreign minister Hossein Amir-Abdollahian and two other officials. Investigations into the cause of the crash are ongoing, but Iranian officials are roundly pointing to difficult weather conditions.
Raisi's demise has thrown Iran's election cycle into disarray. The country was due to hold its next presidential election in the summer of 2025, but the government has now had to schedule one for 28 June. Despite his less-than-stellar performance in his nearly three years in office — Iran's economy is in dire straits, inflation hit 40pc this year and the Iranian rial has slipped by 15pc against the US dollar in the past 12 months — Raisi was still seen as a shoo-in for re-election.
This was a reflection of Iran's electoral system, in which most candidates that register to run are disqualified after vetting by the powerful conservative-dominated Guardian Council, leaving only a few that the council and Iran's supreme leader, Ayatollah Ali Khamenei, deem acceptable. Its decision to disqualify all prominent moderate and reformist candidates in the last election in 2021 paved the way for Raisi — an ultra-conservative former chief justice — to win the presidency after losing to the more moderate incumbent Hassan Rohani in 2017.
Four funerals and an election
With the country in mourning this week, nobody has yet publicly thrown their hat into the ring. But several familiar names are beginning to make the rounds in Iranian media. To date, two stand out. Iran's now caretaker head of state, Mohammad Mokhber, would — despite his limited political career — represent a degree of continuity for the leadership, and is increasingly being mentioned in discussions around the presidency. As is parliament speaker Mohammad Baqer Qalibaf.
There is also the possibility that the Guardian Council green lights some popular, more moderate-leaning candidates, such as Rohani's former foreign minister Mohammad Javad Zarif or former parliament speaker Ali Larijani, in an attempt to draw an increasingly disenchanted and apathetic electorate back to the polls. The 2021 election saw a voter turnout of just 49pc, down from 73pc in 2017, while the more recent parliamentary elections in March saw 42pc participation nationwide — and just 7pc in the capital, Tehran — down from 63pc in 2016.
But Iran watchers are not holding their breath. "I am not optimistic they will try to open up the field," Washington DC-based Centre for International Policy senior fellow Sina Toossi says. "Yes, there is a legitimacy crisis. But if past elections tell us anything, it is that they feel they don't need that high a turnout, and that they can repress any protest," he says.
Whatever the outcome of the ballot, there is little expectation that it will translate into any material change, because the country's power dynamics place the supreme leader, and not the president, as the ultimate decision-maker. "The role of the president has already been marginalised significantly," according to Esfandyar Batmanghelidj, founder and chief executive of Bourse and Bazaar Foundation, a think-tank focused on Iran's economy. "Now, the president dies, and it's surprisingly inconsequential from a policy standpoint because the president wasn't an independent political operator."
As such, most, if not all, of Iran's most critical and strategic policy decisions will remain in place — from its support of proxy groups in the region, to its "look to the east" policy, which has seen Tehran bolster its ties with Beijing, Moscow and a host of central Asian countries. What could change is how well a new administration delivers in these areas, relative to the Raisi administration.
Nowhere is this likely to show itself more than in foreign policy, where Raisi arguably saw his biggest achievements, including the re-establishment of ties with long-time regional rival Saudi Arabia in March last year, as part of his administration's push to improve relations with Iran's immediate neighbours in the Mideast Gulf.
"[Former foreign minister] Amir-Abdollahian was not defining policy, but when it came to being a messenger, he was a good fit for that regional policy," Batmanghelidj says. "He spoke the language, he knew the file, and they knew him. [His successor] Ali Bagheri-Kani has a different profile." Conversely, Bagheri-Kani was spearheading indirect nuclear negotiations with the US for the Raisi administration until the talks broke down in 2022. Should Bagheri-Kani be kept on by a new president, that will hold him in good stead if the talks were to be revived.
Supreme uncertainty
Raisi's rise to the presidency in 2021 is widely accepted to have been engineered by those in the upper echelons of Iran's political elite. As a protege of the supreme leader, and someone lacking his own political base, Raisi was considered by Khamenei as entirely dependable to carry out his vision for the Islamic Republic. "Raisi was unique in how much of his track record was just being Khamenei's man," Toossi says. "So finding another figure like that is going to be difficult."
Khamenei's trust in Raisi appeared so deep that even before 2021 he had been touted as a potential front-runner to eventually succeed the now 85-year-old supreme leader. That was at least one factor behind his relatively quick rise. Khamenei's second son, Mojtaba, has been repeatedly suggested as another leading prospect to potentially succeed his father. For many, it appeared a straight contest between the younger Khamenei and Raisi. This would imply that Raisi's death has effectively cleared the path for Mojtaba to succeed his father. But the latter's candidacy, let alone his ascent, remains anything but certain.
"For now, Mojtaba does not strike me as a viable candidate," Geneva Graduate Institute senior research associate Farzan Sabet says. "A son succeeding a father smacks too much of monarchy. He has not held senior political, executive or administrative posts, he has very little public profile, and does not seem to have real standing among the Shia clergy." What is more, Mojtaba has for many years held significant sway over the office of the supreme leader, a key focus of economic and political power in Iran's system of governance. "He has carved out a role… [that] has a lot of influence," Batmanghelidj says. "Why would he jeopardise [that]?" Assuming that is the case, the prospective post-Khamenei leadership of the region's most disruptive power faces new uncertainty that may prove far more consequential than its president's death.
![](https://public-assets.argusmedia.com/2024/04/26/wpap3chineseimportsofiraniancrude26042024034656.jpg)
Related news posts
UK eyes new environmental guidance for oil, gas: Update
UK eyes new environmental guidance for oil, gas: Update
Adds comment from Shell London, 29 August (Argus) — The UK government will develop new environmental guidance for oil and gas firms, in the light of a recent Supreme Court decision that ruled consent for an oil development was unlawful, as the scope 3 emissions — those from burning the oil produced — were not considered. The ruling means that "end use emissions from the burning of extracted hydrocarbons need to be assessed", the government said today. The government will consult on the new guidance and aims to conclude the process "by spring 2025", it said today. It will in the meantime halt and defer the assessment of any environmental statements related to oil and gas extraction and storage activities until the new guidance is in place, including statements that are already being assessed. The Supreme Court in June ruled that Surrey County Council's decision to permit an oil development was "unlawful because the end use atmospheric emissions from burning the extracted oil were not assessed as part of the environmental impact assessment". The government also confirmed that it will not challenge judicial reviews brought against the development consent granted to the Jackdaw and Rosebank oil and gas fields in the North Sea. A judicial review in the UK is a challenge to the way in which a decision has been made by a public body, focusing on the procedures followed rather than the conclusion reached. Environmental campaign groups Greenpeace and Uplift launched legal challenges in December seeking a judicial review of the government's decision to permit Rosebank. Norway's state-owned Equinor and London-listed Ithaca hold 80pc and 20pc of Rosebank, respectively. Greenpeace in July 2022 separately filed a legal challenge against the permitting of Shell's Jackdaw field. "This litigation does not mean the licences for Jackdaw and Rosebank have been withdrawn", the government said. The Labour government, voted into office in July , pledged not to issue any new oil, gas or coal licences, but also promised not to revoke existing ones. Equinor is "currently assessing the implications of today's announcement and will maintain close collaboration with all relevant stakeholders to advance the project. Rosebank is a vital project for the UK and is bringing benefits in terms of investment, job creation and energy security", the company told Argus today. Shell is "carefully considering the implications of today's announcement... we believe the Jackdaw field remains an important development for the UK, providing fuel to heat 1.4mn homes and supporting energy security, as other older gas fields reach the end of production", the company told Argus . North Sea oil and gas production "will be a key component of the UK energy landscape for decades to come", the government said today. The UK government introduced a climate compatibility checkpoint in September 2022, designed to ensure that oil and gas licensing fits UK climate goals. The UK has a legally-binding target of net zero emissions by 2050. The checkpoint, though, does not take into account scope 3 emissions. These typically make up between 80pc and 95pc of total oil and gas company emissions. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Baghdad issues ultimatum to KRG to drive output down
Baghdad issues ultimatum to KRG to drive output down
Dubai, 29 August (Argus) — The federal Iraqi government has issued an ultimatum to northern Iraq's Kurdistan Regional Government (KRG) to reduce its crude output to "the minimum required", or face the possibility of not receiving its share of the budget. The move, communicated today by a senior official at Iraq's state marketer Somo, represents the latest attempt by Baghdad to pressure the KRG into cooperating to help bring Iraqi output below its Opec+ production target. KRG was asked "on several occasions" to cut its production according to the budget law "to the minimum required for their local refineries" — around 50,000 b/d, the official said. "Otherwise, the KRG will have to pay [the federal government] all the revenues they receive, for the extra barrels beyond what their refineries need". Iraq has emerged as the Opec+ group's biggest overproducer, failing to meet its target in any of the first seven months this year. The country, along with Kazakhstan and Russia, which are overproducing too, submitted updated plans to the Opec secretariat last week outlining how it intends to compensate for the extra volume. Iraqi officials said that a lack of visibility on KRG production are complicating efforts. Output has been gradually recovering in Kurdistan this year, even though the 400,000 b/d export pipeline that links fields in the north to the Turkish Mediterranean port of Ceyhan has been shut-in since March 2023 because of a dispute between Baghdad and Turkey. Crude production from the region collapsed below 100,000 b/d in the months following the pipeline closure, but has risen steadily, particularly from fields operated by foreign companies, as they find new outlets for their crude. Foreign operators operating in Kurdistan said they rely on trucking crude to local refineries to stay in business, but Kurdish crude is also being smuggled — by truck — across the border to neighboring Turkey, Iran and Syria, Argus understands. Different accounts Crude output from Iraqi Kurdistan is currently averaging around 350,000 b/d , a spokesperson for the Association of the Petroleum Industry of Kurdistan (Apikur) told Argus. Apikur is an industry body representing the foreign operators in the northern region . Argus assessed KRG production at 200,000-250,000 b/d on average in the first half of the year. But the federal government disputes those numbers, insisting that production from Kurdistan is around 150,000 b/d. "Any more than that will put huge pressure on the KRG," the official said. Assuming refining capacity of 50,000 b/d, the official labelled the higher estimates as "illogical." He pointed to the fact that about 500 trucks are already needed on a daily basis to export the region's 100,000 b/d, and that the state of the roads and service stations does not allow for the double amount of vehicles. Earlier attempts by the federal government to scale back Iraqi Kurdish production have failed, but the official thinks that Baghdad's latest ultimatum will have the desired impact. "These are serious steps," the official said. If KRG production remains above the 50,000 b/d needed for domestic refining, and it does not deliver the proceeds to Baghdad, it will not receive its share of the budget, which it is heavily dependent on to support its economy. Getting back on track Iraq's latest compensation plan put its overproduction in January-July at 206,000 b/d, compared with 197,000 b/d in January-June. Opec+ secondary sources estimated that output rose by 57,000 b/d on the month to 4.251mn b/d in July, some 251,000 b/d above the Opec+ target. The official said Iraqi production should fall to required levels from September. Somo canceled a spot cargo of 1mn bl this month, and Iraq is "working on deferring two similar shipments, before the end of the month," the official said. "That means we will be down around 3mn bl, or 90,000 b/d". He added that a 50,000 b/d decrease in domestic crude consumption resulting from increased gas imports from Iran and stronger domestic gas output will also help with the country's compliance. He said Iraq's August output levels will be down on the month, but dependent "on the position of the KRG". By Nader Itayim and Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UK plans new environmental guidance for oil and gas
UK plans new environmental guidance for oil and gas
London, 29 August (Argus) — The UK government will develop new environmental guidance for oil and gas firms, in the light of a recent Supreme Court decision that ruled consent for an oil development was unlawful, as the scope 3 emissions — those from burning the oil produced — were not considered. The ruling means that "end use emissions from the burning of extracted hydrocarbons need to be assessed", the government said today. The government will consult on the new guidance and aims to conclude the process "by spring 2025", it said today. It will in the meantime halt and defer the assessment of any environmental statements related to oil and gas extraction and storage activities until the new guidance is in place, including statements that are already being assessed. The Supreme Court in June ruled that Surrey County Council's decision to permit an oil development was "unlawful because the end use atmospheric emissions from burning the extracted oil were not assessed as part of the environmental impact assessment". The government also confirmed that it will not challenge judicial reviews brought against the development consent granted to the Jackdaw and Rosebank oil and gas fields in the North Sea. A judicial review in the UK is a challenge to the way in which a decision has been made by a public body, focusing on the procedures followed rather than the conclusion reached. Environmental campaign groups Greenpeace and Uplift launched legal challenges in December seeking a judicial review of the government's decision to permit Rosebank. Norway's state-owned Equinor and London-listed Ithaca hold 80pc and 20pc of Rosebank, respectively. Greenpeace in July 2022 separately filed a legal challenge against the permitting of Shell's Jackdaw field. "This litigation does not mean the licences for Jackdaw and Rosebank have been withdrawn", the government said. The Labour government, voted into office in July , pledged not to issue any new oil, gas or coal licences, but also promised not to revoke existing ones. Equinor is "currently assessing the implications of today's announcement and will maintain close collaboration with all relevant stakeholders to advance the project. Rosebank is a vital project for the UK and is bringing benefits in terms of investment, job creation and energy security", the company told Argus today. North Sea oil and gas production "will be a key component of the UK energy landscape for decades to come", the government said today. Argus has also contacted Shell for comment. The UK government introduced a climate compatibility checkpoint in September 2022, designed to ensure that oil and gas licensing fits UK climate goals. The UK has a legally-binding target of net zero emissions by 2050. The checkpoint, though, does not take into account scope 3 emissions. These typically make up between 80pc and 95pc of total oil and gas company emissions. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Iraqi Kurdistan’s oil output at 350,000 b/d: Apikur
Iraqi Kurdistan’s oil output at 350,000 b/d: Apikur
Dubai, 29 August (Argus) — Crude production in northern Iraq's semi-autonomous Kurdistan region is around 350,000 b/d, according to a local industry body, just 50,000 b/d below what it was before the closure of a key pipeline to Turkey shut Kurdish producers out of international export markets in March last year. The production estimate relates to fields under the control of the Kurdistan Regional Government (KRG) and excludes those in the region that are controlled by the federal government in Baghdad. It was provided to Argus by the spokesperson for the Association of the Petroleum Industry of Kurdistan (Apikur), Myles Caggins. "The volume of production has generally increased since the shuttering of the pipeline in March 2023. All Apikur members remain focused on ultimately having the pipeline reopened for exports," Caggins said. Apikur represents eight foreign oil firms operating in the Kurdistan region — DNO, Genel Energy, Gulf Keystone, HKN Energy, Shamaran Petroleum, Western Zagros, Mol and Hunt Oil. Producers in the region have been selling their crude to local buyers since the pipeline was closed but they have had to settle for steep discounts. Caggins estimates local sales of Iraqi Kurdish crude are averaging $30-35/bl, which is around $45-50/bl lower than prevailing international oil prices. Apikur's estimate tallies with an operational update from Gulf Keystone today , which put crude output from the Shaikan field in the Kurdistan region close to capacity at 48,200 b/d in August and the current value of local crude sales at around $27/bl. Besides local refiners taking Iraqi Kurdish crude, Argus understands that some of the production is being smuggled into Turkey, Iran and Syria. Such robust production levels in the Kurdistan region are unlikely to be welcomed by Iraq's federal government in Baghdad, given the challenge it faces in keeping Iraqi output below the country's Opec+ cap. Iraq has failed to stick to its target in any month this year. Along with fellow overproducers Kazakhstan and Russia, Baghdad submitted updated plans on 23 August detailing how it intends to compensate. Iraqi officials say efforts to compensate for exceeding the Opec+ target are complicated by a lack of visibility on production in Iraqi Kurdistan, which they currently put at around 100,000 b/d, less than a third of the Apikur estimate. The KRG does not provide monthly production figures as part a wider clampdown on issuing data following the pipeline's closure. Sources at Iraq's oil ministry have told Argus that it will be easier to deliver compensation cuts after the summer season ends and temperatures begin to drop. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
![](/_next/image?url=%2F-%2Fmedia%2Fproject%2Fargusmedia%2Fmainsite%2Fimages%2F14-generic-hero-banners%2Fherobanner_1600x530_generic-c.jpg%3Fh%3D530%26iar%3D0%26w%3D1600%26rev%3D-1%26hash%3DFC2BEDE406483FEF5FDB9549159BAC11&w=3840&q=75)
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more