At the beginning of September 2022, Iran’s oil minister Javad Owji warned of a cold winter and possible gas shortages. But he did not address his fellow citizens, but Europeans. “They are badly governed,” the minister said in a TV interview, citing Europe’s fears that its industrial production and budgets would suffer from reduced gas supplies from Russia due to sanctions in response to its invasion of Ukraine.
At the time, Iran offered itself as an alternative source of natural gas and saw itself strengthened in international talks to limit its nuclear program. “We have the second largest gas reserves in the world and can supply Europe,” said State Department spokesman Nasser Kanaani in early September. But before that could happen, US economic sanctions on Iran would have to be lifted.
However, Iran did not respond to negotiators’ calls for closer cooperation with the International Atomic Energy Agency, and Tehran’s plan failed. In the meantime, the energy crisis in Europe has eased. According to the authorities, the supply of Germany, which was particularly dependent on Russian gas before the start of the war in Ukraine, is now stable.
In addition, around three months later, a well-known problem in Iran returns: gas shortages due to ailing infrastructure.
‘dress warmer at home’
The country has technical problems with gas production, the oil ministry has confirmed. Earlier this week, the oil secretary warned people to go easy on supplies.
In an interview with the official news agency Shana, which reports on the industry, he advised citizens to “dress warmer at home and reduce consumption: those who use too much fuel must expect their supply to be cut off”.
“No one can say, ‘I pay for what I consume,'” Owji added.
As of Thursday, government agencies in a northeastern province had closed all offices through Sunday to conserve electricity and gas.
Technical problems plague Iranian gas production. Here a partially completed refinery in the South Pars gas field in 2014. Credit: Vahid Salemi/AP Photo/Picture Alliance
“Outrageous!” A young mother from Tehran replied to DW about the announcement. “In the last three or four years, we’ve seen the same drama with every cold snap. Every snowfall paralyzes the country when authorities and schools are closed to save energy.”
This winter is no exception: Since mid-December, authorities and schools in various provinces in the country of 84 million people have been closed for weeks to save on gasoline. Still, it’s unusual for the 37-year-old mother to dress warmer at home, like many other Iranians who are used to heating warm homes with cheap gas. While Iran has vast energy reserves, it tends to use them inefficiently.
“Iran suffers from overconsumption of natural gas and other energy sources as a result of extremely poor energy efficiency,” said David Jalilvand, who runs the Berlin-based policy consultancy Orient Matters. “Subsidies, which are intended to alleviate the economic hardship of the population and stimulate the economy, are an important factor,” he told DW. “Several attempts to cut subsidies failed due to the precarious situation of many Iranian households.”
Cold weather in Tehran has strained gas suppliesCredit: Rouzbeh Fouladi/ZUMA Press Wire/Picture Alliance
High industrial consumption
Iran is also struggling with high energy consumption in almost all branches of industry, especially in the iron, steel and cement industries. According to the Federal Institute for Geosciences and Natural Resources, Iran ranked fourth among the countries with the highest gas consumption in the world in 2020, behind the USA, Russia and China.
“In the last two decades, Iran has been able to significantly increase its natural gas production,” said Jalilvand. “But production remains underdeveloped relative to the size of Iran’s reserves. The lack of access to key technologies due to US sanctions also plays a role. Iran will not have any significant capacity to increase its gas exports for the foreseeable future.”
Competition or cooperation with Russia?
Tehran and Moscow want to work more closely together in response to US sanctions both countries are facing. In July 2022, Russian energy company Gazprom signed a $40 billion cooperation agreement with Iranian oil company NIOC to help it develop two gas fields and six oil fields.
Jalilvand is skeptical about this agreement: “After all, Moscow has no interest in developing a powerful competitor on the world markets, especially as Russia’s sales markets have become significantly smaller as a result of sanctions.”
Russia offers oil and gas at significant discounts to countries like China, India and Turkey – all traditional customers of Iran. Turkey, for example, had until recently imported gas from Iran but is now negotiating a 25% rebate on gas from Russia. The Bloomberg news agency also reported in December that the Turkish government wanted to get a retrospective rebate for gas imports that had already been paid for this fall.
This article originally appeared in German.