The recent death under mysterious circumstances of Iranian President Ebrahim Raisi in a helicopter crash in May 2024 has thrust the country into an unexpected electoral cycle, with the first round taking place this week. A surprise outcome saw reformist lawmaker Masoud Pezeshkian take 42.5% of the vote while ultraconservative former nuclear negotiator Saeed Jalili took 38.6%. While the results still need to be reviewed by the country’s 12 member Guardian Council tasked with overseeing elections and legislation, the two faced off in a run-off scheduled for Saturday which, to the surprise of many, saw Pezeshkian win the election with 16.3 million votes. It should be noted that this election has seen the lowest turnout in Iranian electoral history since the Islamic revolution of 1979, with Iranian citizens exhibiting, for the most part, apathy towards the country’s democratic prospects.
This election has provided the Iranian authorities and supreme leader Ali Khamenei a crucial opportunity to tighten their grip on power and suppress any remaining democratic aspirations within the country, meaning that even the surprise win by reformist Pezeshkian should not be seen as indicative of impending change but rather leading to cosmetic changes domestically, without significant departure from the Supreme Leader’s tone. This is something Pezeshkian has made abundantly clear. Importantly, this win should be seen as a step toward the consolidation of absolute power which is expected to have significant global economic implications.
The repressive political environment in Iran has been, over the course of the past few years, increasingly controlled by a select powerful authoritarian group, all close to the Supreme Leader. These have been responsible for the erosion of democratic norms and the country’s ongoing gross violations of human rights, leaving the government with little to no accountability for extensive human rights violations. The recent death of Raisi, who was also known as the Butcher of Tehran due to his direct role in the killing of around 30,000 political prisoners in the 1980’s, and the ongoing electoral cycle, rather than having the potential to shift the Islamic Republic’s political direction, is instead, accelerating the regime’s ongoing attempt to solidify control over its citizens.
The way in which this election played out is indicative of the fact that the regime believes it needs a moderate leader to face the international community in light of increased pressure on the economy from the extensive sanctions which Iran still faces. We must however understand that the Ayatollahs are certainly not seeking to utilize this historic moment for true change, rather to maintain a facade of legitimacy while consolidating brutal authoritarian rule.
Concern has already been expressed by the international community regarding the way in which candidates were selected for this, perhaps sham, election. The role of Iran’s Guardian Council is particularly problematic in light of its strict adherence to the Supreme Leader’s directives. Indeed, only those aligned with Khamenei’s hardliner policies are allowed to stand for election. The results of the still election are therefore viewed by many as predetermined, with the election process simply being a means of projecting the existence of democratic institutions outwards, but with little concrete significance.
From an economic perspective, these elections matter, as does the way in which they are being conducted. Iran has been the product of international anxiety over its nuclear program for the better part of a decade, with the US only recently imposing a fresh set of sanctions due to ongoing violations by Tehran. Such extensive sanctions have crippled its economy, although there was hope that these elections would be ones that would allow Iran’s return to the global market. Indeed while the war in Ukraine rages on, and oil prices surging due to a lack of inventory, Iran, as a country with substantial oil reserves, could play a pivotal role in stabilizing the global energy market.
Market dynamics are and will continue to be significantly impacted by the political stability in the follow-up to the election, of course, the lack thereof. Unfortunately, the way in which these elections have played out will likely perpetuate existing economic sanctions imposed by Western countries. Furthermore, should the United States see a second Trump Presidency, something looking increasingly likely after US President Joe Biden’s poor performance in the recent Presidential debate, sanctions would only be exacerbated, further isolating Iran from the global financial system, for its violation of nuclear norms and ongoing gross violations of human rights.
The global economic impact from Iran’s ongoing violation of human rights and global democratic norms should not be seen as limited to oil markets. Indeed, Iran is strategically located and wields influence across the already delicate Middle East, an area critical for global trade routes. The Strait of Hormuz, for example, is a vital bottleneck through which 17 million barrels of oil pass daily. This is equivalent to between 20% and 30% of global supply. As has already been seen due to Iranian supported heightened political tensions in and around the Straight, the security of this crucial passageway can easily be compromised by Tehran, significantly disrupting global oil supplies and trade.
The international community should not be fooled. The Iranian regime’s strategy is to present a cultivated image of democracy while suppressing genuine democratic processes at home, including murdering journalists, oppressing women and leveraging its impact on global supply chains to perpetuate its radical agenda. This has far-reaching consequences which cannot be overlooked. Aside from the democratic aspirations of the Iranian people which the regime continues to violate, alongside their fundamental human rights, Iran poses a significant threat to regional stability and global markets. The international community, with an emphasis on economic stakeholders, should recognize the broader implications of Iran’s political trajectory.
About the Author
Roderick Navarro is a political analyst based in Brazil focusing on international affairs in Latin America and beyond. He is also the CEO of Iberoanalisis, a global geopolitical research and analysis firm.
