Iran has reportedly arrested over two dozen people including security and intelligence officials after the assassination of Hamas chief Ismail Haniyeh in Tehran exposed a humiliating security lapse.
The assassination was carried out despite heightened security measures due to the inauguration of President Masoud Pezeshkian which took place one day earlier, underscoring a severe breach. Reports are now suggesting that it might have been an "inside job".
A report by the New York Times says over two dozen individuals, including senior intelligence officers, military officials, and staff at the guesthouse, have been detained in connection with the incident.
The Revolutionary Guards Corps' (IRGC) specialized intelligence unit is now spearheading the investigation, tasked with identifying those responsible, the New York Times said.
Iranian authorities have not yet confirmed making any arrests in connection with the assassination. Despite the vague public statements, the severity of the situation is clear, as it shows the Islamic Republic cannot even protect its guests and allies.
"The perception that Iran can neither protect its homeland nor its key allies could be fatal for the Iranian regime, because it basically signals to its foes that if they can’t topple the Islamic Republic, they can decapitate it," said Ali Vaez, Iran director for the International Crisis Group, speaking to the New York Times.
This incident emerges against the backdrop of a protracted covert war between Iran and Israel, characterized by targeted assassinations and sabotage. Iranian officials and Hamas have accused Israel of orchestrating the attack, while Israel has remained silent, neither confirming nor denying its involvement.
The IRGC on Saturday declared that Haniyeh was assassinated with a "short-range projectile with a warhead of approximately 7 kilograms" in Tehran. The IRGC also asserted that "this action was designed and implemented by the Zionist regime and supported by the criminal government of America."
Ahmad Bakhshayesh Ardastani, a member of the Iranian Parliament's National Security Commission, confirmed on Saturday that there are "gaps and impurities" in the Islamic Republic's security and intelligence system. He outlined "two probable scenarios" regarding Haniyeh's death: "One is that the Israelis used a drone and targeted the location from the mountains north of Tehran. The second scenario is that no drone was involved; rather, a number of infiltrators within Iran positioned themselves near the same mountain and used a missile-like weapon to strike Haniyeh's residence."
However, Western media reports suggest that Haniyeh was killed by explosive devices planted well in advance in his room, possibly by agents recruited by Mossad, Israel's intelligence agency. A report by The Telegraph says the devices were placed in three separate rooms of the guesthouse, pointing to a meticulously planned operation.
The original plan was to assassinate Haniyeh during the funeral of Ebrahim Raisi, Iran's former president, in May. However, the operation was aborted due to the large crowds inside the building, which significantly increased the risk of failure, the report said.
Farzin Nadimi, a senior analyst at the Washington Institute and an expert on Iran's defense and security issues in the Persian Gulf region, has questioned the likelihood of a bombing, telling Iran International, "While Israel has the capability to carry out such a bombing, according to reports, Haniyeh had been staying in a hotel until the night of the incident. Therefore, he did not have a fixed location that could have been targeted with a bomb planted there months earlier." Nadimi suggested that targeting Haniyeh with a projectile remains the strongest scenario.
A system in disarray
The incident has not only embarrassed Iran's leadership but also exposed the system's vulnerabilities at a time when it seeks to project strength and stability. The IRGC, responsible for the Islamic Republic's security, now faces an unprecedented challenge in regaining control and preventing further breaches. This assassination underscores the precariousness of Iran's internal security and the challenges it faces from both external and internal strife.
It has also sparked a blame game within the ranks of the IRGC, with internal factions speculating about possible complicity at higher levels. The Telegraph report also cited a close aide to President Pezeshkian, suggesting that the security lapse resulting in Haniyeh's killing "may have been an intentional bid by the IRGC to harm the new president’s reputation."
The aide expressed disbelief at the incident happening by accident, especially on Pezeshkian’s first day in office, suggesting it might lead to war with Israel, all due to the IRGC.
Former Iranian President Hassan Rouhani also believes the attack sought to destabilize Iran during a sensitive political transition.
While it is not yet fully clear how Haniyeh was killed, the incident has brought "a tremendous embarrassment for the IRGC" and triggered a heightened state of alert within the Iranian leadership.
As Iran’s gas demand is expected to soar to two billion cubic meters per day over the next 15 years, Manouchehr Daftarian, head of the Iranian Gas Engineering Association, has urged the Supreme National Security Council to address the current gas imbalance. He warns that if this issue is not resolved promptly, the country will face severe and unmanageable challenges.
During the summer, Iran faces a 14,000-megawatt (MW) electricity shortage, while in the winter, it struggles with a daily gas deficit of 250 million cubic meters (Mcm/d). These shortages cost the country's industries at least $8 billion annually.
While Iran ranks second after Russia in terms of gas reserves, holding 34 trillion cubic meters, it has not developed new fields. Additionally, its largest gas-producing field, South Pars, has experienced a pressure drop and a decline in productivity.
Iran's annual gas demand has risen from 153 bcm in 2013 to 245 bcm in 2023, reflecting a 7% annual increase over the past decade. The residential sector and power plants have driven much of this growth and are expected to continue showing strong consumption increases through 2040.
Due to the lack of growth in renewable energy, the extent of electricity and gas shortages in Iran has spread to all seasons in recent years. The peak of the electricity imbalance, however, occurs in the summer, while the peak of the gas shortage happens in the winter.
Daftarian has also warned that unless gas consumption is halved, the imbalance will not be resolved in the coming years.
“This winter, there is currently a gas imbalance of about 250 mcm/d. The issue is that our problem is not just now. In 2027, even with enhanced energy consumption, the gas demand will be 1,500 mcm/d, but the government will only be able to supply 400 mcm/d,” he recently said.
In January, the National Development Fund (NDF) of Iran also predicted that by 2040, the country's gas production would only be able to meet "one-third" of domestic demand.
According to its estimates, domestic gas demand in Iran will nearly double by 2040, reaching over 1.4 bcm/d, while production levels are expected to almost halve, dropping below 493 mcm/d. Additionally, the NDF projects that the greatest growth in gas demand will occur in the residential and power generation sectors.
The Research Center of the Iranian Parliament published a similar report last summer, indicating that in addition to the 250 mcm/d gas shortage in winter, there are shortages in other seasons as well. Overall, the average gas imbalance throughout the year is about 123 mcm/d, and it is projected to peak at 460 mcm/d by 2040.
Why is Iran's gas production declining?
About three-fourths of Iran’s gas is produced from the South Pars field, which is shared with Qatar. According to Iran's Ministry of Petroleum, this field has entered its second half-life since last year, and with the ongoing pressure drop, gas production from South Pars will decrease by 10 bcm per year starting this year.
This decline will significantly impact Iran's overall gas production and contribute to the growing energy shortage in the country.
In contrast, Qatar began gas production from this shared field 10 years earlier than Iran and has already produced 2.8 trillion cubic meters of commercial gas (pure methane) from it.
Iran claims to have produced two trillion cubic meters of "raw" gas from South Pars so far, although it is not precisely clear how much of this produced gas is pure methane and how much consists of other impurities such as water and heavy gasses.
Years ago, Qatar addressed the pressure drop issue in this field by installing 20,000-ton platforms, which are 15 times larger than those on the Iranian side of South Pars, and are capable of carrying massive compressors. Since 2022, Qatar has signed a $29 billion contract with global oil giants, aiming to increase gas production from this field by 35% within the next three years and by approximately 60% by 2030.
Following the JCPOA, known as the Iran nuclear deal, Tehran signed a $5 billion contract with a consortium led by French company Total for the development of Phase 11 of South Pars. Half of the contract amount was allocated for constructing a 20,000-ton platform equipped with two massive compressors.
After the US withdrew from the JCPOA in 2018, Total pulled out of the project, and the Chinese partner, CNPC, also abandoned it shortly thereafter. The technology for constructing these facilities is exclusively held by a few Western companies.
South Pars accounts for over 40% of Iran’s gas reserves, and while the Islamic Republic could somewhat increase its gas production by developing new fields, the investment in the upstream oil and gas sector has been insufficient. Over the past few years, the average annual investment in this sector in Iran has only been $3 billion, which is half of what it was in the early years of the previous decade and one-seventh of the 2000s.
Additionally, 80% of Iran’s active oil fields are in their second half-life and lose 8 to 12% of their production annually. The government's current focus is on developing new oil fields to prevent a decline in crude oil production and exports, leaving gas projects as a lower priority.
According to the World Bank, Iran flared 20.4 billion cubic meters of gas last year. The International Energy Agency estimates methane leakage from gas facilities in Iran at 8 billion cubic meters annually.
In the grand scheme of things, Iran would need just around $5 billion to stop flaring and a few billion more to halt methane leaks. The government, however, has not deemed this a priority amidst the country’s financial crisis and budget deficit.