Iran Grapples With Winter Gas Shortages Despite Having World’s Second Largest Gas Reserves

For the past month, Iranian officials have been struggling with gas shortages and outages in the north and other parts of the country, where demand for energy is at high records due to unusually cold weather.

Iran, which has the world’s second-largest natural gas reserves, is struggling to meet domestic demand, especially in winter months when energy consumption rises to its highest levels.

In early January, Iran Oil minister Javad Owji said Iran was pumping gas into the national grid at full capacity and was close to reaching “peak gas consumption,” according to state TV.

In September 2022, Owji said in an interview that Europe should be worried that its industrial production and households would suffer due to reduced gas supplies from Russia due to sanctions in response to its invasion of Ukraine. He warned Europeans of a cold winter and potential gas shortages.

“You are being badly governed,” the minister said. “Iran is capable of supplying gas to its neighbors and even to Europe,” reported Deutsche Welle.

At the time, Iran offered itself as an alternative source of natural gas, with Foreign Ministry spokesman Nasser Kanaani saying in early September: “We have the world’s second-largest gas reserves and can supply Europe”.

Domestic Demand at Record Levels

Now the gas-producing country struggles to meet record levels of domestic demand for the fuel.

Amidst a mixture of cold weather and natural gas shortage, Iranian officials have announced several conflicting plans ranging from a total closure of private and public businesses and schools to shutting down factories and poultry breeding farms, causing massive financial loss.

Last week parts of the country, including the northeast Khorasan region, spent days in darkness and freezing cold following week-long disruptions in household gas supplies while kilometer-long queues of cars have been formed at gas stations in several cities, news media Iran International reported.

Gas shortages resulted in Owji publicly apologizing to citizens last week after week-long disruptions in household gas supplies that left thousands of homes without heating and triggered widespread closures of public service institutions. In a televised interview, Owji he acknowledged that around 17,000 households had been left without gas supplies over several days last week.

Iran holds 1,183 trillion cubic feet of proven gas reserves as of 2017, ranking second in the world, and has proven reserves equivalent to 161.9 times its annual consumption, according to Worldometer.

However, Iran’s gas sector has suffered from years of underinvestment. For instance, various efforts to develop its share of the giant South Pars/North Dome gas field that’s shared with Qatar have been abandoned either because of sanctions or internal policy decisions.

Iran needs around $40 billion of investment and Western technology to boost its gas production, which has been gradually falling, according to Iran International News agency. However, without resolving its disputes with Western powers, Iran would not be able to provide the investment and acquire the technology needed for revitalizing its natural gas production.