Iranian officials say the country needs billions of dollars in new investment to modernise its oil and gas sectors. Photo:Morteza Nikoubazl/NurPhoto/picture alliance
Iran is facing a serious energy crisis, which has led to the closure of government offices and the transition of educational institutions to online mode, and industrial enterprises have stopped due to power outages. This was reported by The New York Times.
Despite possessing some of the largest natural gas and oil reserves in the world, Iran has been experiencing an energy crisis for several years. The reason for this is not only sanctions, which have made it difficult to attract foreign investment to modernise the energy infrastructure, but also inefficient governance, outdated infrastructure and high energy consumption. In addition, Iran is also subject to targeted attacks by Israel, which complicates the situation. Iranian President Massoud Peseshkian has recently stated that the energy problem has reached a critical point.
To save energy, the country was effectively shut down for most of last week. The shortage of gas needed to run the country is about 350 million cubic metres per day. As temperatures dropped and demand for gas increased, the government was forced to take emergency measures. As a result, gas supplies to power plants that generate electricity were cut off. By Friday, 17 power plants were offline, while the rest were only partially operational.
Back in November, the Iranian government introduced two-hour scheduled power outages, but this did not solve the problem. Power outages have become more random and longer, and the state-owned energy company Tavanir has warned manufacturers that large-scale outages could last for days or even weeks.
In addition, Iran’s currency, the rial, is experiencing a sharp decline, reaching its lowest level ever against the US dollar. This year, the crisis was exacerbated by Israeli attacks that damaged two important gas pipelines in February, which only increased Iran’s dependence on emergency gas reserves.
Iran makes extensive use of natural gas, which accounts for about 70% of its energy needs, which is significantly higher than in the US and Europe. Thanks to a large-scale gasification project, currently 90% of Iranian households depend on gas for heating and cooking.
