Tehran Regime Cracks Down On Protests, Oil Prices Little Moved

02 January 2018

Clashes between protestors and police across Iran have moved into a sixth day on Tuesday, with more than 450 arrests in Tehran over the past three days, with financial markets eyeing the impact on global oil prices.

A deputy governor for security in the capital said 100 protesters were arrested were arrested Monday, the semi-official ILNA news agency report on Tuesday, following 350 arrests over the weekend. Nine deaths were reported overnight, according to Iran's state television, lifting the death toll to 20.

Protests over pent-up economic frustrations have widened to encompass discontent with clerical rule began in second city Mashhad on Thursday, before spreading to the capital and now several other towns and cities. It is the worst wave of unrest in the country since 2009 when protestors looked to oppose the re-election of then-president Mahmoud Ahmadinejad.

The Revolutionary Guards told the semi-official ISNA news agency. “If this situation continues, the officials will definitely make some decisions and at that point this business will be finished.” Deputy interior minister Hossein Zolfaghari said overnight: “From tonight the unrest will be controlled more seriously.”

On Tuesday, the head of Iran's revolutionary court was reported to have warned protesters could potentially face the death penalty, according to the Tasnim news agency. The court chief said some protesters will come to trial soon on charges of acting against national security and damaging public property, while also pointing out that attending rallies not sanctioned by the country's interior ministry was illegal.

A classified memo from Israel's security forces leaked to local Channel 10 television channel reported that the regime in Tehran was caught off-guard by the protests and despite having since used arrests and a social media crackdown to quell the demonstrations, was being weakened and its stability may be threatened if the protests continue.

Iran is one of the largest members of the OPEC oil cartel and previous political protests in the country have had a major affect on worldwide oil prices. The 1979 oil price shock was sparked by the fall of the Shah of Iran as a revolutionary movement led by religious leaders saw the Ayatollah Khomeini take power and was a chief cause of the oil price rocketing 90% that year.

Before the current unrest started, the price of Brent crude oil had already risen from around $50 in the summer to above $67 in mid-December, levels not sustainably breached for three years. On Tuesday morning hit Brent hit $67.27 before dropping back to the high $66s.

In a statement overnight, UK Foreign Secretary Boris Johnson expressed regret for the loss of life in the protests and called on “all concerned to refrain from violence and for international obligations on human rights to be observed”.

US President Donald Trump, having last year offered to support domestic anti-government resistance in Iran, said in a tweet that Iran’s leaders had turned the country “into an economically depleted rogue state whose chief exports are violence, bloodshed and chaos”.

Analyst Naeem Aslam at broker Think Markets said the protests could still potentially have a larger impact on the oil price.

"Historically speaking, over the last two decades, the protests in the country had a very inconsistent impact on crude prices," he said.

Aslam predicted foreign influence, such as the support expressed for demonstrators by fierce regional rival Israel, tweets by Trump and the comments from Johnson only create more instability in the country. "The situation, if not controlled would have some serious impact on oil prices. Higher oil prices would surely help the Saudi's agenda, the country is consistently trying to support the oil price in order to have a successful IPO for their own oil company."

Original article published on uk.webfg.com

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