As autumn begins and winter approaches, Iran’s national electricity company, Tavanir, issued a notice warning of impending gas shortages and urging citizens to conserve energy. The announcement highlighted the growing pressure on Iran’s energy system due to falling temperatures in the northern half of the country, which has driven up natural gas consumption.
Tavanir stressed that energy consumption management—both electricity and gas—is critical for maintaining fuel reserves for power plants. It pointed out that the majority of Iran’s electricity is generated using gas in thermal power plants, making the country highly dependent on this fuel source. The company emphasized that maintaining a stable electricity supply depends on public cooperation in reducing energy use and more efficient energy management.
The statement also addressed Iran’s broader energy challenge: during the summer, gas consumption rises to meet electricity demand, while in winter, gas usage spikes due to heating needs. However, Iran’s energy infrastructure has been hampered by a lack of investment and the absence of new technologies, which has severely limited the country’s production capacity.
This underinvestment has forced industries and power plants to shut down in response to gas shortages. The lack of development in renewable energy and failure to implement sustainable energy policies have further exacerbated the crisis, leaving both households and industries facing significant disruptions.
A Growing Crisis in the Gas Sector
Iran’s gas production has not kept pace with consumption, particularly impacting its industrial sector. The government has frequently placed the blame for shortages on consumers, while prioritizing industries in gas allocations during times of scarcity. But the underlying problems are much larger, including the uncertainty surrounding gas reserves, the heavy reliance on gas for thermal power plants, and the country’s aggressive development of gas extraction without adequate investment in infrastructure.
A 2022 report from the Parliament Research Center revealed alarming statistics: during the coldest three months of the year, the average gas supply imbalance reached 227 million cubic meters per day, rising to 315 million cubic meters in February. In 2022, Iran’s total gas consumption was around 241 billion cubic meters, with daily consumption averaging 597 million cubic meters during the warmer months and soaring to 782 million cubic meters in the colder months.
By January 2023, the CEO of Iran’s National Gas Company, Saeed Tavakoli, reported that the daily gas supply imbalance had reached 260 million cubic meters, describing the situation as critical and calling for urgent measures to address the shortfall.
Domestic Production Struggles to Meet Demand
Despite being the third-largest producer of natural gas in the world, Iran continues to face difficulties in meeting its own domestic needs. This is largely due to declining production at the South Pars gas field, which accounts for about 75% of the country’s output. A lack of investment in developing new fields and maintaining existing ones has led to this decline.
Iran’s ability to import natural gas is also constrained by limited pipeline infrastructure and a lack of LNG receiving terminals. As a result, the country remains almost entirely dependent on domestic production. If current trends continue, experts predict that by 2041, Iran will be able to meet only one-third of its domestic gas needs and will need to import a staggering one billion cubic meters of gas per day.
Hossein Mirafazli, former CEO of Jam Petrochemical, warned in a December 2023 interview with Energy Press that if the gas crisis persists, Iran’s heavy industries could suffer losses amounting to $6 billion in the coming years. The Iran Chamber of Commerce has reported that gas supply restrictions have already led to losses of between $172 million and $241 million for petrochemical companies.
Urgent Need for Investment and Reform
On September 18, 2024, at the first event marking the completion of the gas industry’s pipe production cycle, Saeed Tavakoli noted that the current challenge facing Iran’s energy sector is no longer just gas imbalances, but an outright gas shortage. He called for immediate action to curb gas consumption and urged greater investment in both energy infrastructure and the development of new technologies.
Just a few days later, on September 23, it was reported that Iran is expected to experience a gas supply imbalance of 373 million cubic meters per day in the final year of its current government term—a troubling sign that the country’s energy crisis is only deepening.
With limited investment in both renewable energy and the gas sector, Iran’s energy future remains uncertain. Without significant reform and a shift towards more sustainable energy policies, the country faces continued industrial disruptions and an increasingly strained domestic energy market.
