Iranian Energy Sector

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In 2008, 80 percent of Iran's electricity was generated from natural gas and 16.5 percent from oil, with a smaller percentage coming from hydro projects when available. Iran's only existing nuclear power plant came into operation in September 2011 with a peak capacity of 1,000 megawatts.[1]

Oil sector

As of January 2011, Iran had an estimated 137 billion barrels of proven oil reserves, 9.3 percent of the world's total reserves and over 12 percent of OPEC reserves.[2]


Iran is OPEC's second-largest producer after Saudi Arabia, and in 2010 was responsible for about five percent of global production. Iran produced approximately 4 million barrels per day (bpd) of crude oil in 2010, and as of November 2011 was averaging about 3.6 million bpd in that year.[2]

Iran's production has varied greatly since the 1970s. Production levels topped 6 million bpd in 1976 and 1977, but a combination of war, limited investment, sanctions, and a high rate of natural decline in Iran's mature oil fields (resulting in a loss of 400,000-700,000 bpd of crude production annually) has prevented a return to such production levels since the 1979 revolution.[2]

The bulk of Iran's reserve lie in the southwest and offshore Persian Gulf; there are also substantial reserves in the Caspian Sea, but exploration and production in these areas has been hampered by territorial disputes with neighboring Azerbaijan and Turkmenistan. Iran also shares oil fields with neighboring countries including Iraq, Qatar, Kuwait, and Saudi Arabia.[2]


Iran exported 2.2 million bpd of crude oil in 2010,[2] with net export revenues amounting to about $73 billion.[3] Iranian Heavy Crude Oil is Iran's largest crude export, followed by Iranian Light. Oil exports accounted for about half of all government revenues in 2010, while crude oil and its derivatives made up about 80% of Iran's total exports.[2]

As of mid-2011, China imported the most Iranian oil, accounting for 22 percent of Iran's total oil exports, while Japan (14 percent), India (13 percent) and South Korea (10 percent) were the next largest individual countries importing Iranian oil. The European Union imported 18 percent of Iran's exported oil, with Italy (7 percent) the largest individual importing country.[2]


Iran is the second-largest consumer of oil in the Middle East after Saudi Arabia, with consumption totaling 1.8 million bpd in 2010, an approximate 10 percent increase over 2009. Domestic oil demand is mainly for diesel and gasoline; Iran has limited refining capacity for such light fuels, and as a result imports a considerable share of its gasoline supply. However, Iran was as of November 2011 a net exporter of petroleum products, due to large exports of residual fuel oil.[2]

The government subsidises the price of refined oil products; Iran implemented reforms to its subsidy policy in December 2010, with a significant impact on domestic gasoline consumption.[2]

Gas sector

As of January 2011, Iran's proven natural gas reserves stood at an estimated 29.6 trillion cubic meters (tcm), second in the world to Russia. Most of Iran's natural gas reserves are located offshore in non-associated fields (where gas exists without the presence of oil), while significant production also originates from associated gas in onshore fields. Over 47% of Iran's gas reserves are located in the South Pars field[2], one of the largest independent gas reservoirs in the world lying in the Persian Gulf on the border between Iran and Qatar, with which Iran shares the field.[4]


Iran's natural gas production has increased by about 550 percent since the early 1980s, and produced an about 170 bcm of marketed natural gas in 2010. A sizeable volume of this gas was reinjected into reservoirs as Iran implements its plans for increased crude production through enhanced oil recovery.[2]


Despite its large natural gas reserves, Iran exported an estimated 7.87 bcm (ranking it 25th in the world) in 2010,[5] primarily to Turkey and Armenia via pipeline.[2] The country imported about 6.9 bcm of natural gas in 2010,[5] mainly from its northern neighbor Turkmenistan.[2]


Iranian natural gas consumption has roughly kept pace with the production, which increased by about 550 percent since the 1980s. Iran consumed an estimated 144 bcm of natural gas in 2010. In November 2011, the US Energy Information Administration estimated that natural gas consumption in Iran was expected to grow at around seven percent annually over the next decade.[2]

Nuclear sector

Iran established a civil nuclear program in 1957 under the US Atoms for Peace program. Iran's efforts at generating electricity through nuclear power had as of November 2011 resulted in a single power plant, Bushehr, with a 1,000 megawatt peak capacity.[1] Work on the plant began in 1975,[6] and it was finally connected to the power grid in early September 2011.[1]


  1. 1.0 1.1 1.2 "Nuclear Energy in Iran" World Nuclear Association, retrieved 1 February 2012.
  2. 2.00 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 2.11 2.12 2.13 "Iran: Analysis" US Energy Information Administration, retrieved 1 February 2012.
  3. "OPEC REVENUES FACT SHEET" US Energy Information Administration, retrieved 1 February 2012.
  4. "South Pars Gas Field" pars Oil and Gas Company, retrieved 1 February 2012.
  5. 5.0 5.1 "Iran: Economy" CIA World Factbook, retrieved 1 February 2012.
  6. "Iran's nuclear plant connects to electric grid, the country says" CNN World, 4 September 2011.