Oil Strikes Threaten the Iranian Government’s Stability



Massive labor strikes have rocked Iran’s oil sector this summer, as thousands of workers went on strike  to demand higher wages, job security, and safer working conditions. The strikes exposed the harsh economic pressure facing Iran after the United States reimposed sanctions on its oil sector  in 2018. In addition, the strikes have exposed the  widespread corruption in  Iran’s recently privatized oil sector and state-run oil enterprises.

Labor strikes started in May, but workers were told to stop  the strikes so that their demands could be addressed by the Rouhani government.  However, Iranian officials do not recognize independent labor groups, and labor activists face a harsh response from Iran’s security agencies and are likely to be handed down tough sentences by the country’s judicial system. President Hassan Rouhani at first was dismissive of the strikes believing that they  would not impact the production or distribution of oil. 

Some 700 contract workers who went on strike at Tehran’s oil refinery were handed settlement forms to fire them from their jobs.   Fearing a public outcry, refinery officials called  the mass firing a rumor. Taking to social media, the oil workers said they were handed their final renumeration and told not to return to work.

Iran’s oil, gas and petrochemical sectors  came to a near standstill as strikes spread to several Iranian provinces including Western Azerbaijan, Ilam, Esfahan, Bushehr, Tehran and Khuzestan.  According to the Council for Organizing Protests of Oil Contract Workers, tens of thousands of contract workers took part in the strikes.

Strikes received internal and international support. More than 200 political, guild and civic activists in Iran issued a statement supporting the strikes. The Australian Council of Trade Unions along with other international labor unions said they support the striking Iranian oil workers and stand in solidarity with them.

By June, even fulltime workers employed by the Iranian Ministry of Oil  vowed to join the strikes.  The strikes became public knowledge very quickly when workers from 60 industrial compounds joined the strikes, including  workers from the South Pars Gas field and Bushehr Petrochemical, as well as workers from  other oil refineries across the country. The strikes were projected via social media platforms leading to worker demands becoming part of the public discourse in Iran.

Rouhani’s latest annual  budget (2020-2021) sent to the Parliament for approval does not allocate sums for higher payments to be made to oil sector workers.  The Ministry of Oil  has said that the strikes are not connected to the lack of budgetary allocations by the Rouhani government.  

On average, oil workers  receive $200 per month, work six days a week, and receive two and a half vacation days each month.  They also work in extreme heat on oil platforms away from  their families. Deaths  due to unsafe working conditions  in the oil sector are common.

Rouhani has said that  he will deal with worker demands  in the oil and gas industry before leaving office. However, Iran’s latest budget bill does address  some worker  concerns and allocates some funds  to the Ministry of Cooperatives, Labor and Social Welfare to offer workers limited incentive packages. The budget only allocates  funds to official government employees, and Tehran says it will order the  Ministry of Labor to deal with the demands  of temporary contract workers.

 The last time major oil strikes hit Iran they contributed significantly to  the collapse of the Shah’s government  in 1979, and led to the clerics taking over power in Tehran.  If the oil strikes continue, they could lead to vital parts of the Iranian economy shutting down which would be catastrophic considering the deep economic problems the country is facing due to the US-led sanctions and the economic fallout from the coronavirus pandemic. While the Iranian government and security agencies will try to contain the strikes, they could lead  to a major crisis if Tehran runs out of cash and is unable to meet labor demands. Given Iran’s track record, it is unlikely to resolve worker demands and it may resort to making superficial gestures. It is highly likely that it will initiate a security response to prevent the strikes destabilizing the country, further eroding the system’s legitimacy. With Ebrahim Raisi, the president-elect, strikers are likely to face the full force of the state as his tasks include unifying the home front, preventing polarization and upholding the legitimacy of the system. The protesting landscape looks grim under Raisi, with his heavy-handed approach well-known to all Iranians. However, it is fair to say that fear is no longer a concern among Iranians, with Iran witnessing dozens of protests across the country over the last few years as protesters have not been deterred by the harsh sentences handed down and even killings carried out by security agencies have not stopped them from protesting. Any crackdown by Raisi is likely to lead to a stern response from the Iranian people, leading to a new cycle of protests, further denting the eroding legitimacy of the system.

Editorial Team