Why is Iran Facing a gas crunch?

The gas crunch adds to the growing list of strains on Iran’s economy. The country is one of the world’s biggest oil and gas producers, but has been plagued by significant energy shortages caused by years of US sanctions and chronic under-investment in power infrastructure. The government is also under pressure internationally.

Will Iran face a natural gas shortfall this winter?

Experts estimate that the country will face a natural gas shortfall of at least 260mn cubic metres a day this winter. It is in talks to increase imports from neighbouring Turkmenistan. Iran’s energy crisis is exacerbated by sanctions on its nuclear programme.

Why is Iran Facing a power blackout?

The start of rolling power blackouts in Iran this week amid critical fuel shortages has exposed the vulnerability of the oil-rich country to US sanctions and underscored the impact of years of under-investment. Iran has the world’s third-largest oil reserves and second-largest natural gas reserves.

Why does Iran have a shortage of electricity & gas?

Chronic under-investment in infrastructure exacerbated by US sanctions as well as mismanagement and huge state subsidies — which encourage high fuel consumption and overburden the cash-strapped state — have left Iran with worsening shortages of electricity, gas and petrol.

How much energy did Iran spend in 2022?

According to the IMF, Iran spent $163bn in explicit and implicit energy subsidies in 2022, which amounted to more than 27 per cent of GDP — the highest share of the economy of any country in the listing.

Why do Iran's power plants rely on mazut?

“This is a valuable step towards reducing the health risks associated with air pollution.” As temperatures drop in winter, Iran’s supply of natural gas is insufficient to meet surging demand, so its power plants are forced to rely on mazut as feedstock.