In early September 2022, Iran’s Oil Minister Javad Owji warned of a cold winter and possible gas shortages. But he was addressing the Europeans instead of his fellow citizens. “They are being misgoverned,” the minister said in a televised interview, citing concerns in Europe that their industrial production and their homes will suffer as gas supplies from Russia are reduced due to sanctions in response to their invasion of Ukraine. .
At that time, Iran offered itself as an alternative source of natural gas and saw its position strengthened in international talks to limit its nuclear program. “We have the second largest gas reserves in the world and we can supply Europe,” Foreign Ministry spokesman Nasser Kanaani said in early September. But before that can happen, the US economic sanctions against Iran would have to be lifted.
Iran, however, did not respond to negotiators’ demands for closer cooperation with the International Atomic Energy Agency, and Tehran’s plan did not work. Meanwhile, the energy crisis in Europe has eased. Officials say supplies are now stable in Germany, which was particularly dependent on Russian gas before the war in Ukraine began.
On top of that, some three months later, a familiar problem has returned to Iran: gas shortages due to dilapidated infrastructure.
‘Dress warmer at home’
The country is experiencing technical problems with gas production, the oil ministry confirmed. Earlier this week, the oil minister warned people to hold on to supplies.
In an interview with the official Shana news agency, which covers the industry, he advised citizens to “dress warmer at home and reduce consumption: those who use too much gasoline can expect their supply to be cut off.”
“Nobody can say, ‘I’ll pay as I go,’” Owji added.
By Thursday, government authorities in a northeastern province had closed all offices until Sunday to save electricity and gas.
“Outrageous!” a young mother from Tehran told DW in response to the announcement. “In the last three or four years, we see the same theater every time there is a cold snap. Every snowfall paralyzes the country, when authorities and schools are closed to save energy.
This winter has been no exception: since mid-December, government offices and schools in several provinces of the country of 84 million people have been closed for weeks to save gasoline. Still, dressing warmer at home is unusual for the 37-year-old mother, as it is for many other Iranians, who are used to having warm homes heated by cheap gas. Iran may have huge energy reserves, but it tends to use them inefficiently.
“Iran suffers from excessive consumption of natural gas and other energy sources as a result of extremely low energy efficiency,” said David Jalilvand, who runs the Berlin-based policy consulting firm Orient Matters. “Subsidies, which are intended to alleviate the economic hardship of the population and stimulate the economy, are an important factor here,” he said. D.W.. “Several attempts to cut subsidies failed due to the precarious situation of many Iranian households.”
High industry consumption
Iran also struggles with high energy consumption in almost all industrial sectors, especially the iron, steel, and cement industries. According to the German Federal Institute for Geosciences and Natural Resources, Iran ranked fourth on the list of countries with the highest gas consumption worldwide in 2020, behind only the US, Russia and China.
“Over the past two decades, Iran has been able to significantly expand its natural gas production,” Jalilvand said. “But production is still underdeveloped in terms of the size of Iran’s reserves. The lack of access to key technologies due to US sanctions also plays a role. For the foreseeable future, Iran will not have a significant ability to increase its gas exports.”
Competition or cooperation with Russia?
Tehran and Moscow plan to cooperate more closely in response to the US sanctions facing both countries. In July 2022, the Russian energy company Gazprom signed a cooperation agreement of 40,000 million dollars (36,800 million euros) with the Iranian oil company NIOC to help it develop two gas fields and six oil fields.
Jalilvand is skeptical of this deal: “After all, Moscow has no interest in building a powerful rival in global markets, especially since Russia’s sales markets have become considerably smaller due to sanctions.”
Russia has been offering heavily discounted oil and gas 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% discount on gas from Russia. The Bloomberg news agency also reported in December that the Turkish government wants to get a retroactive discount for gas imports already paid for this fall.
