BAKU, Azerbaijan, July 23. Despite boasting the world’s third-largest natural gas production, Iran’s energy sector remains vulnerable to supply shocks, the International Energy Agency (IEA) said in its latest outlook, Trend reports.
In 2023, Iran produced about 270 billion cubic meters (bcm) of natural gas, with output rising in 2024 following the launch of Phase 11 of the South Pars field - the backbone of Iran’s gas production, accounting for over 70% of total output. Yet, while Iran consumes around 95% of its gas domestically, the country continues to play a vital role as a supplier to Türkiye and Iraq.
Natural gas powers more than 70% of Iran’s energy use and 80% of its electricity generation. In 2023, it was the world’s fourth-largest gas consumer, with power generation, industry, and households each using about a third of the supply.
Still, Iran faces chronic seasonal shortages. During winter 2024, daily gas deficits reached 350 million cubic meters, triggering industrial cutbacks and power outages. Limited gas storage (only about 3 bcm) leaves the system vulnerable to demand swings or infrastructure damage.
The June 2025 conflict with Israel exposed these risks. Drone strikes hit facilities at South Pars Phase 14, temporarily disrupting 12 million cubic meters per day of production. A fire also broke out at the nearby Fajr Jam plant, though no output was lost. Iran preemptively shut all seven of its ammonia and urea plants during the crisis, further tightening global fertiliser markets, before gradually restarting them after a ceasefire.
Despite the turbulence, gas exports held steady. In 2024, Iran supplied around 7 bcm to Türkiye — about 13% of the latter’s primary gas supply - and maintained a 2 bcm/year gas swap with Turkmenistan via Türkiye. Ankara confirmed that these flows were not interrupted during the conflict.
