Wednesday's attack on Iran's vast South Pars offshore gas field has sent oil and natural gas prices soaring around the world.
Inside Iran, damage to gas fields threatens to worsen already devastating gas and electricity shortages that have plagued the country for decades.
South Pars is the backbone of Iran's energy supply, accounting for as much as 70 percent of the country's gas production. Initial reports indicated some of Iran's gas fields, which account for nearly 12% of Iran's total gas production, were damaged, analysts said. Iran shares gas fields with Qatar.
Darga Khatinoglu, an Iranian energy expert based in Azerbaijan, said Iran was in a “serious gas shortage crisis.”
Late Wednesday, further attacks on South Pars raised fears of an escalation of attacks on energy infrastructure across the region, as the United States and Israel's war against Iran and Iranian counterattacks threatened to spiral out of control.
Iran's heavy dependence on the South Pars Islands helps explain the quick talk of new retaliation.
Iran and Qatar condemned the Israeli attack. The bombing and Iran's response to it indicate that large energy facilities in the Persian Gulf may be at risk.
The Islamic Revolutionary Guard Corps has told people from other Persian Gulf countries, including Saudi Arabia, Qatar and the United Arab Emirates, to evacuate areas around the country's oil and gas facilities, saying they will be targeted by Iranian attacks in the coming hours in retaliation for the damage to the Southern Pearl Islands.
Iraq's Ministry of Electricity also announced that gas exports from Iran to Iraq would be completely cut off following attacks on Iran's oil and gas infrastructure, threatening to escalate the regional energy crisis.
Iran boasts the world's second largest natural gas reserves after Russia. But even before the attack on Southpar Island, states across the country were experiencing severe gas and power shortages, especially during the winter months when demand for hot water and space heating is high.
To make up for this shortfall, power plants across Iran are increasingly turning to burning mazut. Mazut is a highly polluting “bottom of the barrel” residue of crude oil that is banned in many parts of the world due to its negative effects on human health. In the months leading up to the US and Israeli attacks, the burning of Mazut triggered an air pollution emergency.
The severe drought that has hit Iran has dried up wetlands across the country, making it easier for winds to kick up dust and worsening air pollution.
Analysts said the attack on the giant South Pars oil field was likely to hasten a decline in productivity in the region, which had worsened Iran's energy crisis. Gas production on the Iranian side of the South Pars field is decreasing by about 10 billion cubic meters a year as the field matures, Katinoglu said.
Overall, Iran produces about 260 billion cubic meters of gas annually. Despite domestic shortages, it was exporting about 18 billion cubic meters a year to countries such as Türkiye and Iraq.
Iran's crumbling infrastructure is exacerbating the shortage. Iran flares, or intentionally burns off, about 23 billion cubic meters of gas each year because it lacks the facilities to capture it and sell it or use it as an energy source. Additionally, it is estimated that 8 billion cubic meters are lost to leakage annually.
Meanwhile, Iran remains dependent on fossil fuels due to lack of access to clean energy technology and investment. Renewables and nuclear power together account for less than 2% of energy consumption.
Professor Nima Shokri, an expert in environmental engineering at Germany's Hamburg University of Technology, said continued disruption risks “cascading effects” such as rationing and increased dependence on mazut. Damage to oil and gas infrastructure, leading to prolonged fires and large-scale leaks, would have “ecologically dire consequences” for the region, he added.
“The attack on South Pars Island will not only damage infrastructure,” Professor Shokri said. “It highlights the risk of paralyzing Iran's fragile energy system while allowing pollutants to spread across its borders and targeting energy facilities that power the entire region.”
