Iraq denies allegations of purchasing or re-exporting Iranian crude oil

The shortage has deepened in recent months, driving prices ever higher. More than 100 essential medications, including treatments for cancer and rare diseases, are either scarce or entirely unavailable.

While Iran has long had an underground market for imported medicine, prices have soared since late summer, and reports of counterfeit drugs are rising.

Investigations by Iran International reveal that counterfeit medications are being sold at exorbitant prices—often reaching hundreds of dollars—right in the heart of Tehran. Cancer patients, in particular, face an increasingly dire situation.

“Not only have cancer and rare disease medications become shockingly expensive, but some have completely disappeared from pharmacies and even the underground market,” a pharmacist in Tehran said on condition of anonymity. “As original medicines grow scarce, counterfeit sales have increased.”

He noted that cancer drug prices range from 150 million rials ($180) to as much as four billion ($4800).

“A breast cancer patient had to pay 900 million rials ($1,100) for just 56 pills,” the pharmacist added. “She could have had a lower-quality Indian version a bit cheaper, but she was desperate to get the best on offer. We’ve had patients selling their property to get cancer treatment for themselves or loved ones.”

Buying drugs on the black market isn’t just costly—it’s dangerous. The pharmacist recalled a case where a patient needed Zavicefta, an antibiotic unavailable in pharmacies. Desperate, they turned to the underground market, paying 3 billion rials ($3600).

“The patient brought the drug to me and I could tell immediately it was fake. The real version comes in sealed packaging but theirs had been tampered with,” he said. “Imagine paying that much money and getting a counterfeit.”

A lawmaker on Iran’s parliamentary health committee had warned of the crisis a month earlier, reporting 116 scarce medications and predicting the number could increase tenfold within months without government intervention.

Iran International contacted several pharmacies in Tehran to inquire about various medications, and all confirmed the scarcity of imported drugs. Even major state-run pharmacies, such as 13-Aban and the Red Crescent, had limited or no stock.

Some Iran-made drugs are also becoming scarce due to shortages of raw materials and hoarding by suppliers who benefit from rising prices.

A young art student who lost her sister to leukemia shared her experience.

“My sister’s doctor prescribed German-made drugs, saying local alternatives wouldn’t be as effective and would make chemotherapy even harder. My father, two brothers, and I spent everything we had on her medication, but in the end, we lost her.”

She described the excruciating process of hunting for medication.

“For months, we visited 13 Aban and Red Crescent pharmacies every other day, only to be told they didn’t have it. We often had to buy from the black market. Some drugs, like Endoxan, we never found.”

For patients with rare conditions like hemophilia, MPS, and SMA, the situation is even worse. Patients and their families have staged several protests outside the Health Ministry and Iran’s Food and Drug Organization.

Such medication is not produced in Iran because it is not economically viable, Hamidreza Edraki, head of Iran’s Rare Diseases Foundation, told ILNA last month. Imports are stuck in customs for so long that they often expire before reaching patients, he added.

Those in charge are yet to address the situation despite warnings from all stakeholders.

On January 28, Iran’s Health Minister Mohammad Reza Zafarghandi announced that the price cap on several drugs would have to be raised because pharmaceutical companies could no longer afford production costs.

This policy may help increase supply gradually. The impact it had on prices, however, was immediate. For those Iranians in urgent need of treatment, things are looking to get a lot worse before getting any better.

The dual crisis has become so severe that schools across Iran have been forced to close for 24 days in the past three months. Government offices and businesses are faring no better.

“Iran loses approximately 50,000 lives annually due to air pollution. This is the human cost of air pollution," Iran’s Health Minister Mohammadreza Zafarghandi announced.

The financial cost of air pollution in Iran is at least $12 billion annually, he added, a figure that some estimates say could rise to $20 billion.

These vast human and financial costs come alongside a significant reduction in the domestic use of cleaner fossil fuels which are set aside for profitable export abroad.

Meanwhile, Iran has ramped up the consumption of highly polluting fuels like mazut, or heavy fuel oil.

In the absence of official statistics, Iran International has found evidence that Tehran has significantly increased its exports of cleaner fuels such as natural gas, liquefied petroleum gas (LPG), and kerosene while sharply increasing domestic consumption of highly polluting fuels like mazut.

The latest statistics from Turkey’s Energy Market Regulatory Authority show that in the first 11 months of last year, Turkey increased gas imports from Iran by 40%, reaching nearly 6.5 billion cubic meters. Iran also exports gas to Iraq, though no official figures on the volume are available.

Natural gas is the cleanest fossil fuel, followed by LPG (a combination of propane and butane).

Data from energy consultancy Kpler obtained by Iran International shows Iran’s LPG exports have grown significantly over the past four years, peaking at 337,000 barrels per day in 2024 or more than double the amount exported in 2020.

Radio Farda recently published a report citing a confidential Ministry of Petroleum document indicating Iran has also increased kerosene exports while nearly halving its domestic consumption.

The same document indicates that domestic mazut consumption in the first seven months of current fiscal year beginning in late March last year rose by over half compared to the same period last year.

In contrast, Iran’s exports of mazut - the most polluting fossil fuel - have been on a consistent downward trend in recent years while domestic use has surged.

Kpler data seen by Iran International shows Iran exported an average of 232,000 barrels per day of mazut last year—a 42% drop compared to 2021.

Iran has reduced its mazut exports because the mazut it produces contains 3.5% sulfur—seven times higher than the standard required for marine fuel. This high sulfur content has created significant challenges for exporting the fuel.

If Iran halted the export of cleaner fuels like natural gas or LPG, there would be no need to rely on mazut domestically, and diesel consumption would also halve.

Currently, Iran consumes around 700,000 barrels of diesel and 780,000 barrels of gasoline daily.

Greenhouse gas emissions up

According to the latest data from the Global Carbon Project, Iran’s greenhouse gas emissions in 2023 reached about 818 million tons, marking a 10% increase since 2020, a rise by nearly half since 2010 and a staggering 155% surge since 2000.

Globally, despite its relatively middling population size, Iran is the six biggest emitter of greenhouse gas.

Natural gas accounts for 70% of Iran’s energy consumption and over the past decade, Iran’s gas production and consumption grew by more than 5% annually.

However in recent years this growth has plummeted to just 2%, and the International Energy Agency reported in January that it dropped below 2% last year and was expected to shrink to just 1% in 2025.

Despite slowing gas production and mounting shortages, President Masoud Pezeshkian’s government has allocated the export of 16 billion cubic meters of gas in the upcoming fiscal year, or nearly double the amount for the target this year.

"It's really a battle of generations," said Dagres, a senior fellow at think tank the Washington Institute's Iran program.

"Gen Z, Gen Alpha as well, as they come of age, are really pushing back against the Islamic Republic's norms and they're really trying to take back their country. Whether they succeed is another thing."

Dagres, who specializes in Iranian youth and curates the newsletter the Iranist, said the Iranian government realizes they may have already lost Gen Z so are staking their hopes for staying in power on their successors.

“They've been actually looking at the next generation, which is Gen Alpha."

"When they came up with the song Salam Farmandeh or Salute Commander. Mostly when you see kids it's Gen Alpha kids that are part of the regime choirs and also they're being forced to sing it at schools."

Gen Z, or those born between 1997 and 2012, make up less than 7 percent of the population but were at the forefront of the 2022 Woman, Life, Freedom uprisings demanding women's rights and the end of the Islamic Republic.

Though the protests were largely stamped out, the generation remains restive.

“(Tehran is) having to think ahead because really they're struggling and I think the prime example of how they struggled here was the Woman, Life, Freedom uprising itself. It was led by Gen Z girls and women,” said Darges.

The Islamic Republic is thinking outside the box, appealing to Persian nationalistic motifs to form the minds and win the battle of the new generation.

“They've made a play about the Shahnameh or the Book of Kings. They're really trying to tap more into Iranian nationalism, which is much more palatable to the average Iranian, regardless of age these days than more Islamic motifs," said Dagres.

A recent viral video showcases a reporter asking Gen Zs to identify the clerics in photos they presented. The girls could not tell the difference between Iran’s current Supreme leader Ali Khamanei and the founder of the Islamic Republic Ruhollah Khomeini.

The kids had no problem identifying K-pop bands and Billie Eilish, however. The moment illustrated how little interest the youth have in their rulers.

Iran’s Gen Z formed a counterculture, the opposite of what the government was trying to force onto them, consuming Western music, movies all in an underground way, Dagres said. But they are not afraid to showcase their color dyed pink hair and skateboards.

The fact that women and girls are increasingly not wearing the mandatory hijab, she said, showcases the subtle ways Iranians are resisting.

In a scene which went viral online, a group of Iranian schoolgirls raised their middle fingers at a portrait of Iran's leaders in a classroom, in another sign of sharp defiance.

Authorities used extreme force to quell their rebellion after the death in morality police custody of a young Gen Z'er, Mahsa Jina Amini, in 2022.

Sham trials, confessions forced through torture and a wave of executions in 2022-23 claimed the lives of many of their number, including 23-year-old Mohsen Shakari and Majidreza Rahnavard, both promising youths hanged for their activism.

Declining marriage and birth rates
Gen Z is also the generation that is coming of age and often holding off on getting married and have children.

So much of that is a result of their connection to less traditional Western culture, but also high unemployment, concerns over climate change, inflation in Iran and a rejection of Islam and tradition, Dagres said.

Islamic Republic officials say that by the year 2101 the population in Iran will halve even as neighboring countries experience rising birth rates.

Iran’s once-youthful population is aging fast. That has stirred concerns over a lopsided economy and a potential healthcare collapse in the future.

The United Nations (UN) projects that by 2050 one-third of Iranians will be 60 or older, representing a three-fold increase from 2021.

Iran’s Ministry of Science has called for the removal of educational content deemed to discourage people from having children to combat declining birth rates.

The average Iranian household went from 6 per family to three and now a growing number of youths are choosing to live with their partners.

It is a phenomenon in Iran called white marriage, where two unwed people live together, replacing the traditional marriage proposal where families would help set up relationships.

The latest findings from the state-run National Population Research Institute suggest the number of registered marriages in Iran has dropped dramatically since 2011 with almost half a million marriages registered - a fall from the peak of 891,627 marriages in 2010.

The Rejuvenation of the Population and Protection of the Family (RPPF) law, enacted by the Iranian Parliament in 2021 under a directive from Supreme Leader Ali Khamenei, imposes penalties for actions deemed to discourage marriage and childbearing.

Iranians struggling with depression

Depression is rife in Iran, Dagres said, with Iranians now turning to drugs like opium and alcohol which is haram or religiously banned to ease the pain. The economic hardships and day-to-day repression lead to their depressive state.

“Some of these Gen Z'ers are so desperate for a hit of alcohol because they become so addicted that they're purchasing ethanol from a pharmacy and drinking it," said Dagres.

With the demographics of Iran dramatically changing, Gen Z appears to have largely decided to seek change, and the Islamic Republic's influence over Gen Alpha has yet to be felt.

Only time will tell what sort of future the youth of Iran will achieve.

"Those who oppose Iran's joining the Financial Action Task Force are profiteers of sanctions and Iran's isolation and want to benefit from this isolation for themselves," he told ISNA in an interview published on Thursday.

He argued that claims that joining FATF would hinder oil sales are unfounded. "The claim that some individuals make, that joining FATF will make it impossible for us to sell oil, is an incorrect justification; because the whole world knows who our oil buyers are."

"Not joining FATF and selling oil through unofficial channels causes about 30% of the proceeds from exports to go into the pockets of intermediaries,” he added.

Ghanbari pointed out that out of 200 countries, only three—Iran, North Korea, and Myanmar—remain outside of FATF. "Even Russia, which has political and commercial relations with us, says join FATF, and if you do not do this, we cannot have economic and commercial exchanges with you," he added.

He expressed hope the Expediency Discernment Council would support FATF membership, which he said has traditionally had negative views about the organization.

The Expediency Discernment Council, which mediates disputes between parliament and the Guardian Council (a constitutional watchdog), became involved after parliament approved the legislation but the Guardian Council rejected the two bills concerning the Palermo and CFT conventions regulating money laundering and financing of terror groups.

Last month, Supreme Leader Ali Khamenei approved revisiting the two critical international conventions required to ease banking restrictions resulting from Iran's blacklisting by the FATF.

The Financial Action Task Force (FATF), established by the G7 member countries to safeguard the international financial system, influences banking policies in most countries and guides businesses aiming to protect their own integrity and reputations.

Iran's status on the FATF blacklist has had a major impact on its international banking operations. The country remains on the list of high-risk countries with serious strategic deficiencies in countering money laundering, terrorist financing, and proliferation financing.

Iran needs to finalize legislation enabling the enactment of two international conventions: the International Convention for the Suppression of the Financing of Terrorism (CFT) and the UN Convention against Transnational Organized Crime (Palermo Convention).

The dispute between the parliament and the Guardian Council was referred to the Expediency Council in 2019 for arbitration.

The Expediency Discernment Council, which mediates disputes between parliament and the Guardian Council (a constitutional watchdog), became involved after parliament approved the legislation but the Guardian Council rejected the two bills concerning the Palermo and CFT conventions regulating money laundering and financing of terror groups.

The Expediency Council has stalled the matter since then, neither approving nor rejecting the bills. The inaction is apparently due to objections from hardliners, such as the Chairman of the Expediency Council Sadeq Amoli Larijani.

They argue that joining the conventions would harm Iran's national security by exposing its dealings with regional Tehran-backed allies—precisely the activities these international agreements are designed to address.

Iran will remain on the FATF's list of High-Risk Jurisdictions Subject to a Call for Action until it fully implements its action plan, including ratifying the Palermo and CFT. Only then will the FATF consider next steps, such as suspending countermeasures.

The imported potatoes will be sold at a target price of about 30 US cents per kilogram, less than half of the current market prices, Akbar Fat’hi said on Wednesday.

The average income of an Iranian wage earner is about $150.

He anticipates the influx of imported and domestically stored potatoes will lead to price reductions in the coming days.

Fathi attributed the current high prices to increased exports and the off-season for domestic potato production. He also noted that further potato imports may be necessary if the market does not stabilize as expected.

The move follows recent reports of significant price increases on essential food items, with some activists saying the real inflation rate for basic necessities is far higher than official figures suggest.

Labor activist Faramarz Tofighi, speaking to ILNA, highlighted the rising cost of vegetables, including potatoes, making it difficult for workers to afford basic necessities.

He argued that the real inflation rate for essential goods is likely above 50-60%, significantly higher than official figures announced to be about 40%.

He added that many families will soon be unable to afford even red meat monthly. He also cited rising prices for bread, meat, dairy, and an 80% increase in egg prices over the past two months.