Iran‘s Energy Crisis: Gas Shortages Force School Closures and Blackout Measures
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Prioritizing Geopolitics Over Infrastructure?
Data from the US Energy Data Administration indicates that Iran earned $144 billion in oil revenues during the first three years of Joe Biden’s presidency. Karimi argues that a significant portion of this revenue has been diverted to support Iran’s regional allies, such as the Bashar al-Assad regime in Syria, rather than being invested in domestic infrastructure. “Iran has reportedly spent more than $25 billion on Syria, mainly through oil support,” Karimi said. “This pattern of prioritizing regional alliances over infrastructure investment has left Iran’s energy sector in dire need of modernization.” Iranian officials acknowledge the need for billions of dollars in new investment to modernize its energy sector. However,foreign companies remain hesitant to invest until Iran reaches a nuclear deal with the United States and sanctions are lifted. The energy crisis highlights the complex challenges facing iran. As the country grapples with economic sanctions,internal political tensions,and the global energy transition,finding a enduring solution to its energy woes will be crucial for its future stability and prosperity.Iran is grappling with a severe energy crisis, marked by crippling natural gas shortages, widespread power outages, and soaring gasoline consumption. This dire situation, described by analysts as the worst since the 1979 revolution, has brought the nation’s economy to the brink.
Experts point to a confluence of factors contributing to this crisis. Sanctions, coupled with decades of mismanagement and misplaced priorities, have hampered critical investments in energy infrastructure. While neighboring countries like Turkey have diversified their energy sources, iran remains heavily reliant on natural gas, with over 95% of households connected to a vast network of pipelines.
“Iran has installed 430,000 kilometers of gas piping to deliver to remote villages,” notes energy expert Hossein Mirafzali.
“though, prioritizing residential use over industrial supplies has taken a toll on the economy. Gas shortages have forced industrial shutdowns, causing significant damage.”
Iran’s dependence on gas-fired power plants exacerbates its environmental woes, making it a major contributor to greenhouse gas emissions disproportionate to its economic output.
Adding another layer of complexity, analysts predict Iran may soon be forced to import natural gas to meet domestic needs. Turkmenistan, which previously supplied Iran with gas during Mahmoud Ahmadinejad’s presidency (2005-2013), is seen as the most likely source.
This looming scenario underscores a troubling paradox: how can a nation with vast natural gas reserves become reliant on imports? The answer lies in the systemic challenges that have plagued Iran’s energy sector for decades. “Even if Iran met those conditions now, it would take three to five years for international companies to come back,” says shokri.
“Simultaneously occurring, iran is facing a daily natural gas deficit of 350 million cubic meters, an electricity shortage of 20 gigawatts, and soaring gasoline consumption of up to 15 million liters per day.”
The consequences of inaction are already evident. Factories have been shuttered, homes endure hours-long power outages, and pollution levels have reached unprecedented highs. Experts warn that without fundamental changes in strategy and governance, Iran risks further economic stagnation, growing public discontent, and increased dependence on energy imports.
## The Hidden Cost of Iran’s Geopolitical Strategy: An Archyde Interview with Arezoo Karimi
**Host:** Welcome back too Archyde. Today, we’re delving into the unfolding energy crisis impacting Iran. Joining us to shed light on this complex situation is Iranian economic journalist Arezoo Karimi. Arezoo, thank you for being here.
**Arezoo Karimi:** It’s my pleasure to be here.
**Host:** Iran, a nation blessed with abundant natural gas and oil reserves, is facing severe energy shortages, leading to school closures, blackouts, and environmental concerns. Can you help us understand the root causes of this crisis?
**Arezoo Karimi:** absolutely. The situation in Iran is dire.While sanctions imposed by Western countries on Iran’s nuclear and missile programs undoubtedly play a role in hindering investment in the energy sector [[1](https://www.ft.com/content/72f15b19-8e22-4392-8f07-e2c17bdd6e6f)], there’s more to the story. A significant portion of Iran’s oil revenue appears to be channeled toward supporting regional allies, as opposed to crucial domestic infrastructure upgrades.Data from the US Energy Data Administration shows Iran earned $144 billion in oil revenue during the first three years of President Biden’s term alone. Reports suggest billions have been diverted to support the Assad regime in Syria, as an example. This practice of prioritizing geopolitics over domestic needs has left Iran’s energy sector critically underdeveloped.
**Host:** Such a prioritization seems counterintuitive. Can you elaborate on how this impacts Iran’s energy sector?
**Arezoo Karimi:** Iran’s heavy reliance on gas-fired power plants, which account for 86% of its electricity generation, exposes it to vulnerabilities when supply chains are disrupted. While officials blame sanctions, the systemic issue lies in their failure to diversify energy sources and modernize the infrastructure. Furthermore, to cope with the current gas shortages, the government has resorted to burning mazut, a cheaper but far dirtier fuel, which exacerbates air pollution and carries significant environmental consequences.
**Host:** It seems like a catch-22 situation. iran needs foreign investment to modernize its energy sector but faces reluctance due to the ongoing geopolitical tensions and sanctions. What are your thoughts on potential solutions for Iran?
**Arezoo Karimi:** Absolutely. Foreign companies remain hesitant to invest in Iran until a permanent solution to the nuclear issue is reached. What Iran truly needs is a balanced approach that prioritizes both its geopolitical aspirations and the well-being of its citizens.
This entails a commitment to transparent financial practices, channeling more resources towards domestic infrastructure development, and fostering a conducive environment for foreign investment. Ultimately, a lasting solution requires addressing the root causes of the energy crisis through both domestic policy reforms and diplomatic efforts to ease international sanctions.
**Host:** Arezoo Karimi, thank you for your insightful analysis. This conversation highlights the complex interplay between politics, economics, and energy security, a challenge not only facing Iran but also many nations around the world.
