Wartime Energy Management

During the 12-day war triggered by the Zionist regime’s blatant invasion of Iranian territory, the Ministry of Petroleum was quick to manage conditions in a bid to prevent any disruption all across the petroleum industry chain, from upstream to downstream sectors. It was reminiscent of wartime conditions of the 1980-1988 imposed war.

From the very beginning of the war on Iran, with a view to heading off any crisis in energy supply, the Ministry of Petroleum focused on continued production across the petroleum industry value chain, reducing risks and removing possible hazards at facilities. To that end, it formulated scenarios to counter probable disruptions in the export of crude oil and petroleum products, and the sustainable supply of fuel across the country. It was due to these measures that although gasoline consumption jumped 50%, the distribution of this main fuel across Iran faced no shortages.

First Vice President Mohammad Reza Aref gave a positive assessment of the management of conditions, saying no fuel disruption was reported. That achievement was made while the Tel Aviv regime had struck fuel storage facilities in Tehran.

Iran’s gas distribution network was not spared. However, damaged installations were repaired rapidly so that no gas shortage was experienced in Iran. In other words, the laudable performance of the Ministry of Petroleum established psychological calm in the society so that energy production and supply could go ahead smoothly. It was a rare wartime case. That boosted public confidence while preventing the invading forces from achieving their goals of disrupting fuel distribution to harm the economy.

One element of examining success during wartime conditions is the preservation of economic strength and guaranteeing psychological security in society. During the 12-day war, the Ministry of Petroleum increased its fuel supply capacity while protecting energy infrastructure by maintaining stability in the value chain, which was a clear sign of Iran’s preparedness and resilience in the energy sector.

Iran Oil Industry Unfazed by War

Nearly four decades after the end of the Iraqi-imposed war on Iran, the Zionist regime of Israel launched military strikes on Tehran and some other cities in addition to oil facilities in a flagrant violation of international law and national sovereignty of the Islamic Republic of Iran. The predawn attacks on June 13, 2025, started with blasts in Tehran, killing a number of top military commanders, nuclear scientists and civilians. The attacks came exactly in the midst of Iran-US nuclear talks which were very close to an agreement. When exactly the world was watching developments between Tehran and Washington, hosted by Muscat and Rome, with the Iranian oil market in focus, the Zionist regime did not hide its hostility to the talks. Just three days before the most sensitive round of talks, it embarked on an aggression of Iranian territory, thwarting talks.

Fruitless Attack

The power of the Iranian petroleum industry and its unstoppable movement are well known not only by the Zionist regime, but also by the world. The very news that even sanctions could not stop the Iranian oil industry prompted this regime to damage two refineries in Bushehr with the aim of disrupting Iran's energy supply, but of course it could never stop the production process. Because without a moment's hesitation, with the timely presence of the oil industry's operational forces, these two facilities were brought under control, the fire was contained, and the necessary measures were taken to maintain safety and continue activities.

Drones in Sky

It was June 14. Several hours had passed since blasts rocked Tehran. The sky was shining in Bushehr. Service workers at the South Pars gas field were returning home or their residence to change shift. Suddenly, explosions were heard in Kangan, sending black smoke billowing into sky. Small drones had struck a train of the refinery of Phase 14 of South Pars, causing fire. The same spot known as the most Iranian refinery was targeted at South Pars. It is a symbol of Iranian strength. When sanctions had blocked all paths toward progress, SP14 was inaugurated. The refinery was fully built by Iranian service workers under the searing sun of Kangan under climate conditions making respiration difficult. Due to the blast, the Fajr Jam refinery where gas from the South Pars, Naar and Kangan gas fields are sweetened suffered an accident.

Fire Contained

Barely had two hours passed than fire was extinguished at the facilities targeted by strikes. In the preliminary hours it was announced that one of the four units of SP14 had caught fire while the remaining 3 were still functioning. However, before nightfall, the Ministry of Petroleum released a statement allying concerns among Iranians. The statement read as follows: “In the wake of Saturday’s attack by the fabricated Zionist regime, Phase 14 of South Pars and the Fajr Jam gas refinery were targeted. In the wake of this accident, petroleum industry service workers moved quickly to contain the fire in the shortest possible time and they did so.”

Oil Depot Blast

On June 14 in the night a fire broke out in western Tehran while black smoke rose south of the capital. The Shahran oil depot as well as an oil storage tank in Rey were targeted. No only residents of western districts of Tehran, but also the entire capital started to worry. They feared that the fire could not be contained to be spread and cause other blasts. Rumors were swirling about fuel supply disruption and the spread of fire to nearly cities. But the following morning, the Ministry of Petroleum announced that everything was under control. The statement said: “In continuation of recent aggressions, the Shahran oil depot and a fuel storage tank south of Tehran were targeted by the ominous Zionist regime. Immediately after the accident occurred, rescue teams were dispatched to the place.”

The day following the attacks, Minister of Petroleum Mohsen Paknejad visited the Rey oil depot installations in order to see the latest developments. It was announced that the Rey oil storage facility was active without anything to worry about fuel distribution. Paknejad, who allayed public concerns, said sustainable fuel supply was under way and everything was in control.

Giving assurances about necessary arrangements for fuel supply, the minister said: “Naturally, in a bid to ensure long-term management of fuel supply, some areas may face some restrictions, which would not have any significant impact on the entire process of fuel distribution.”

No Queuing

Ali Akbar Ameri, director of supply and distribution at National Iranian Oil Products Distribution Co. (NIOPDC), said the fire at the Shahran and Rey oil depots had been contained, noting that Tehran Province had faced no problem with fuel supply.

“As soon as the accident happened, extinguishing the fire and preventing its spread to other storage facilities was considered. That was managed in the first minutes. Furthermore, activating other storage tanks and dispatching petroleum products to depots is under way. There is no problem with fuel supply now,” he explained.

Field observations vindicated such statements. Except for the first and second days of the strikes that caused anxiety among citizens, no queuing was seen at fuel stations. The fuel supply chain was functional just like ordinary days without any tensions.

Fuel Suppliers

Mohammad Sadeq Azimifar, CEO of National Iranian Oil Refining and Distribution Co. (NIORDC), said gasoline distribution saw a record 50% growth during the days of conflict. “The refining and distribution industry successfully passed a 12-day crisis test,” he said.

Heaping praise on NIORDC’s endeavor for sustainable fuel supply following the Israeli invasion of Iran, he released a statement to hail the Minister of Petroleum, Armed Forces (Islamic Revolution Guards Corps (IRGC), Basij, Army) and security organs. “I give assurances that NIORDC’s staff would be remain ready to provide services to our esteemed people under any circumstances without hesitating any moment in fulfilling their obligations.”

Columnist Mohammad Mohajeri wrote:

“Today we see no blackout. If we saw no queuing at gas stations, if we saw minimum tension in everyday life, it is thanks to round-the-clock efforts by those who have been working hard in full silence in fulfilment of their national obligations.”

Crisis Management

Such steadfastness is not new for the petroleum industry. It has already experienced much more critical conditions under the shadow of international sanctions. During eight years of Iraqi war on Iran, the petroleum industry was one of the main targets of enemy strikes due to being the main artery of energy supply and the main source of economics. During the Iraqi war, oil installations, particularly refineries and terminals, were frequently attacked. The war began in 1980 with attacks on the Abadan oil refinery and ended in 1988 with strikes on the refining facilities. Oil refineries across the country were constantly bombed and the Abadan refinery, due to its proximity to the border with Iraq, saw 23 of its processing units destroyed. The enemy was seeking to bring down Iran’s oil production and exports to zero. That inflicted heavy damage on Iranian oil installations, but the enemy never achieved its goals.

Sustainable Supply

During the eight-year war, Iran’s oil exports did not stop at all. Iranian technicians relied on their own expertise to repair damaged facilities and bring them back online. According to oil export documents from the Kharg terminal, oil exports were never stopped during the eight-year war. Iran kept oil exports at an average 1.5 mb/d. In addition to its achievements, the petroleum industry experienced crisis management in practice and not just on paper those days. That might sound easy under normal conditions, but when there is war, it would require much more expertise. Another point with crisis management was to gather knowledge in countering threats and more importantly turning threats into opportunities. The valuable experiences achieved during the Iraqi war on Iran about crisis management were used during the 12-day war of aggression by the Zionist regime on Iran without causing any disruption in Iranian oil production and exports.

Besides sustainable production, the Ministry of Petroleum set up 17 mobile stations in Tehran and 3 others across Mazandaran Province roads in a bid to ensure fuel distribution. In the cities of Kashan, Golpayegan, Zanjan, Isfahan and Qazvin, more than 500 CNG stations distributed fuel freely. Add to all of that crisis management and fire containment at SP14 and the Fajr Jam refinery without losses, immediate control of conditions following strikes on the Shahran and Rey oil depots.

Dynamism in Crisis

Finally, ceasefire was declared between the Islamic Republic and the Zionist regime on June 24, ending 12 days of war.

One day after the war ended, First Vice President Mohammad Reza Aref visited the Ministry of Petroleum to meet with Minister Paknejad and a group of his deputies and senior managers.

Noting that despite 200 ml/d of per capita gasoline consumption during the first days following the aggression, there was no discontentment, Aref said tension-free queues at fuel stations were exemplary. He gave a positive assessment of the Ministry of Petroleum’s role in the sustainable management of fuel and energy in the country during the 12-day conflict.

“This ministry showed once more its dynamism and capacity under tough and critical conditions,” he said.

Aref said the 14^th administration regards the Ministry of Petroleum as a main source of financing development, adding: “This ministry can serve as a model for other sectors.”

He said the 14^th administration was seeking immunity for production in a bid to make decisions independently about oil production and exports without having to come under any imposition.

Strong Value Chain

In the meeting, Minister Paknejad paid homage to military and scientific persons who were killed throughout the aggression.

“The petroleum industry value chain strongly protected national energy security. The petroleum industry staff tried their best until the last moment so as to prevent any disruption in the energy distribution sector,” he said.

He added that the petroleum industry was focused upon several points, including concentration on production throughout the value chain, from upstream to downstream sector.

The second step was to focus on reducing risks and removing possible hazards in the facilities.

The third point was to develop scenarios for countering possible disruption in the crude oil and petroleum products exports for times of crisis.

And the fourth point was to guarantee sustainable fuel supply across the country.

Paknejad said some restrictions were imposed at the beginning, adding that people were cooperative in this regard.

Gas Network

During the 12-day war, the gas distribution network was struck in some areas. Minister Paknejad said National Iranian Gas Co. (NIGC) staff managed to repair the damaged network in the shortest possible time.

“At the beginning, it was totally unbelievable to me when they said repair was over, but when I saw the gas flow at the dispatching center of NIGC, I was assured that the mission had been accomplished. That was indicative of synergy and coordination in the value chain of the petroleum industry, from production, transmission, refining and supply to exports. This chain guaranteed the energy security of the country during tough days.”

During the first days of the strikes, Paknejad had reiterated that people had nothing to worry about fuel distribution, particularly gasoline. Fuel distribution went on without disruption during the war.

Regarding the 12-day performance of NIORDC, he said: “Necessary arrangements had been considered and effective measures were undertaken. Throughout the crisis, we conducted some measures and we managed the fuel supply successfully. This achievement does not belong to a single company; rather it is the result of synergy within the petroleum industry value chain that accomplished a big task.”

Energy Frontline

In short intervals, two gas refineries managed to bring production facilities back to line. All these achievements were the result of service workers in the oil and gas industry. Minister Paknejad heaped praise on them. Effective cooperation between NIOC and NIGC yielded such effective results.

“Our colleagues stayed at work in operation zones which are exposed to risk. Our colleagues continued their work on Persian Gulf platforms and in Assaluyeh despite all threats,” he said.

Enemy Failure

Hamid Bovard, CEO of NIOC, gave a valuable assessment of cooperation within state organs, saying in a message: “This big achievement could not be achieved without empathy and steadfastness. Thanks to your efforts, no disruption was seen in supplying vital needs of the country and the enemy failed once more in realizing its ominous objectives.”

He said that regular meetings at Crisis Committees of NIOC and its subsidiaries as well as effective decision-making in logistics and operations played the key role in achieving this success.

Ministry Standing Tall

During the 12-day war, the Iranian petroleum industry once more proved its strength and perseverance to the world. It managed to prevent a fuel and energy crisis by professional management and organizational coherence. That turned it into a successful model in resilient governance in the energy sector.

Today is the

end of June 2025. One week has passed since a ceasefire was declared between Iranan the Zionist regime. This is postwar Tehran. The Ministry of Petroleum continues to work nonstop and bravely protects territorial resources and wealth.

Aborted Drone Attack on South Pars

On 14 June 2025, a micro-drone flown by the Zionist regime struck the onshore refinery of Phase 14 of the massive South Pars gas field, causing big blasts at the facility and fire in one of the four units. The fire was followed by a temporary suspension of gas supply from SP14. However, within 10 days, gas production resumed.

Touraj Dehqani, CEO of Pars Oil and Gas Co. (POGC), said the fire was immediately contained by firefighting team there. Thanks to relentless efforts made by service workers there, the damaged unit of the refinery was back online on June 26.

70% Supply Share

Iran enjoys a privileged position in the gas sector. One of the main gas resources in the world, i.e. South Pars gas field, lies in Iran. South Pars Gas Complex (SPGC) is a big company supplying refined gas and other products in Iran. It accounts for 70% of national gas supply. It took about 14 years to build the SP14 refinery that came on-stream in March 2023. At the peak of work on this megaproject, about 9,000 persons were involved, who were forecast to reach 100,000. That is why Dehqani explains South Pars as the integrated asset of Iranians. He said that South Pars gas is instrumental in supplying energy needs of industries, power plants and households. It makes the biggest contribution to Gross Domestic Product (GDP).

SPGC produces 56.6 mcm/d of rich gas, 75,000 b/d, 1.05 mt/y of LPG (propane and butane), 1 mt/y of ethane to feed petrochemical plants and 400 tonnes a day of sulfur.

Located 105 km of Kangan, the refinery has 4 offshore platforms, 44 wells, two offshore gas pipelines 105 km each and two offshore glycol pipes 105 km each.

Overhaul Meetings

The strike on the South Pars refinery came about one month after Ali Reza Sarmadi, POGC director of production and operations, had announced the end of overhaul of platforms of SP14.

Dehqani said meetings by the Directorate of Crisis Management and Civil Defense of POGC were held regularly in Bushehr Province in coordination with the POGC head office in Tehran since the very beginning of the 12-day war.

“In the meetings held aimed at reaching maximum readiness to encounter possible threats and emergency conditions, all necessary arrangements were made to protect the health of staff, ensure safety of installations, guarantee maximum gas recovery from South Pars and carry out the annual overhaul of offshore platforms,” he said.

Rapid Recovery

The accident caused by the Zionist regime’s strike on the SP14 refinery was contained and repaired rapidly to allow for sustainable gas supply by South Pars under critical conditions.

During the tumultuous days when one might think that the South Pars refinery would suffer serious damage, the head of POGC announced that the damaged unit was resumed production.

Since the very first hours of attacks, Dehqani was present in Kangan and Assaluyeh to issue necessary instructions to accelerate decision-makings and conducting technical and safety measures.

“The accident was controlled immediately thanks to efforts made by safety and firefighting teams and service workers. Necessary arrangements were made and SP14’s gas feeding into national trunkline resumed,” he said.

Most Iranian Refinery

One of the outstanding features of the SP14 refinery is its local nature. It has been entirely constructed by Iranian work force and even 70% of equipment used at this facility is domestically manufactured. That is why it is known as the most Iranian refinery. It might have given impetus to enemies to strike the main artery of the petroleum industry to bring a halt to national energy supply. However, the conspiracy failed.

Such empathy and cooperation drew praise from Dehqani. Referring to the steadfastness of Iranian nation against enemy invasion and the Armed Forces’ bravery, he said: “I feel compelled to extend my gratitude to POGC staff, particularly service workers on South Pars platforms that did their best in guaranteeing the flow of gas. Maximum endeavor by POGC staff during war conditions continued, presenting a brilliant image of national solidarity.”

Young Civilization

South Pars is not merely a structure or a name to vanish easily. It is a three-decade-old civilization rooted in the Iranian history. It owes its life to Iranian experts. South Pars will be recognized as a turning point in Iran’s petroleum industry. As historical evidence shows oil extraction dates from the Achaemenid period, specifically around Susa, we may consider the South Pars gas field as a young offspring of Iran.

Analysis of the War on Iran

Shuaib Bahman

Intl. Affairs Analyst

The 12-day war imposed by the Tel Aviv regime against Iran on 13 June 2025, targeting mainly nuclear and military installations in addition to infrastructure, constitutes one of the most complicated geopolitical crises of recent decades. Iran responded forcefully to the strikes. Although the United States initially refused to engage in the war, there was no doubt from the very beginning that it was the main ally of the Zionist regime in this crisis. That is why, when it was convinced that Iran had the upper hand on the battlefield, the US intervened and bombed Iranian nuclear facilities. It is highly significant to review the Zionist regime and the US objectives and scenarios in the war on Iran.

Strategic Objectives

Assessing the processes and positions of the Zionist regime and the US in their war on Iran indicates their strategic objectives in attacking Iran.

Tel Aviv Objectives

• Obliterating or weakening Iran’s nuclear program as an existential threat;
• Weakening Iran’s military strength, particularly its ballistic missiles (estimated to have 3,000 missiles) ;
• Destabilizing or changing the Islamic Republic establishment to remove long-term threats;
• Bolstering regional deterrence against Iran-allied resistance groups; and
• Maintaining the US military and diplomatic support.

US objectives

• Preventing Iran from acquiring nuclear weapons without widespread military conflict;
• Undermining the regional influence of Iran and its proxy groups;
• Preserving ties with Persian Gulf allies and Tel Aviv without provoking any extended conflict;
• Maintaining the stability of oil markets and global supply chains, particularly the Strait of Hormuz; and
• Preventing endless wars in the Middle East, as promised by President Donald Trump.

Iran War Scenarios

Based on the above-mentioned objectives, at least three scenarios may be envisaged for Tel Aviv and Washington in the war on Iran:

1. Downfall of the Islamic Republic

In this scenario, the Zionist regime was expecting to undermine the Islamic Republic by targeting the assassination of top military commanders and political leaders, and touch off protests across the country due to the economic pressure from sanctions to facilitate the overthrow of the Islamic establishment in Iran. In the eyes of the Tel Aviv regime, unrest similar to the 2022 protests would bring the Islamic Republic closer to downfall, this time aided by military and economic damage, in which case a new government with no hostility to Tel Aviv and Washington would take power or a destabilizing power void would occur to blunt Iran’s regional influence.

2. Irreparable Damage to Infrastructure

In this scenario, the Zionist regime expected to benefit from US logistics or arms support in launching widespread strikes on Iran’s vital infrastructure, including Natanz and Fordow nuclear facilities, missile bases, oil refineries, the South Pars gas field, and the power network. Tel Aviv hoped to undermine Iran’s economy and military strength by assassinating military commanders so that post-war Iran would be forced to focus on reconstruction without having any military or economic power to counter the US and the Zionist regime for years. That would have set back Iran’s nuclear program while reducing Iran’s regional influence. Under this scenario, the Islamic Republic would be left as a bankrupt and ineffective government. This scenario failed due to Iran’s precision strikes as the Tel Aviv regime realized that should Iran’s economic infrastructure come under attack, it would face tougher reciprocal strikes.

3. Diplomatic Ceasefire

In this scenario, the Zionist regime expected to inflict heavy damage on Iran’s nuclear and missile installations before stopping its strikes under diplomatic pressure from other governments and due to damage caused by Iran’s reciprocal strikes. The Zionist regime and the US hope that Iran would return to the negotiating table, but this time with a weakened nuclear program and military strength. Such a ceasefire would allow Tel Aviv to preserve its military achievements, like setting back Iran’s nuclear program for several years without any engagement in a regional war. Through Qatari mediation, the US managed to facilitate a ceasefire to preserve international support for the Zionist regime.

Outlook

An assessment of the preferred scenarios for the Zionist regime and the US against Iran shows that at least the first two scenarios faced fundamental challenges due to military limitations, diplomatic complexities, and unpredictable consequences. A decisive victory for the Zionist regime was unrealistic due to the inability to destroy Iran’s nuclear program and Iran’s considerable capabilities. Dealing irreparable blows would have been as damaging to the Zionist regime as it could have been for Iran, which showed that it was fully prepared to retaliate. In the meantime, a diplomatic ceasefire was the only scenario that was more likely to be realized, and it eventually happened.

The end of the Zionist regime’s war on Iran depended on a variety of factors:

1. Military Strength of Both Sides: Despite a blitzkrieg, Iran was swift in rebuilding its military command to carry out operations. Shortly, Iran managed to reciprocate and change the balance on the battlefield. The US intervened, but it just favored a very limited conflict to spare further damage.
2. Diplomatic Pressure: Reducing tensions and ending regional and international conflicts depends on strong mediation and the willingness of both parties. Mediators, varying from Russia and Turkey to some Arab governments, had volunteered to step in, but neither party was in a position to accept the mediation offers. In the end, Qatar managed to broker a ceasefire.
3. Domestic Political and Economic Calculations: The domestic political situation, as well as economic indicators on both sides, played an important role in determining future strategies. In the Zionist regime, despite the initial comprehensive support for the military invasion of the Islamic Republic, criticism of Benjamin Netanyahu increased after the intensification of Iranian attacks. The regime also suffered significant blows in the economic sphere, particularly in energy. This was while in Iran, an unparalleled national solidarity was formed among the people.
4. Public Opinion Pressure: It was important for Netanyahu to achieve an achievement that would justify this war, because he had suffered a lot of damage by entering the war with Iran. For Iran, dealing painful blows to the Zionist regime was important both from a military perspective and necessary for managing public opinion so that the Islamic Republic would not emerge from this war as a loser.

In light of what has been said, it is noteworthy that the cessation of hostilities between Iran and the Zionist regime is by no means considered a permanent ceasefire. Rather, given the Zionist regime’s record of violating ceasefires, there is a possibility of a war breaking out at any moment. Especially since, apart from assassinating Iranian military commanders, this regime has not achieved any of its expected achievements, such as destroying Iran’s nuclear program and its military capability.

War of Aggression on Iran and Global Energy Security

Shuaib Bahman

Intl. Affairs Analyst

Ever since the Zionist regime launched its invasion of Iran, energy has become a pivotal issue in international fora. Two key issues, energy price and energy security, were focused upon by the media, political elite, and economists due to Iran’s prominent role in energy production and exports and its strategic position in the Strait of Hormuz. Iran is not just a big supplier of oil and gas in the world; rather, due to its dominance on the Strait of Hormuz, where a large portion of global oil passes, it is instrumental in global energy security. Below, while reviewing the impacts of the ongoing crisis on energy prices and security, various aspects of this issue are analyzed. Citing historical evidence, we will assess the role of Iran and international actors, particularly the United States.

Background

Military and security crises in sensitive regions of the world, especially the Middle East, have always had a profound impact on energy markets. The Middle East plays a key role in the world’s energy supply due to its massive oil and gas resources as well as strategic passages such as the Strait of Hormuz. Iran, as an OPEC founding member and a country with a unique geopolitical standing, affects the energy market from two perspectives: energy production and supply, and control of one of the most important routes for its transmission. In the meantime, the Zionist regime’s invasion of Iran, as a regional crisis with the potential to spread to the international level, could have severely affected these two dimensions.

Impact on Energy Prices

Growing energy prices in world markets are a direct result of military crises in energy-producing regions. Military conflicts and insecurity usually lead to supply cuts or concerns about supply cuts, which in turn drive up prices. In the case of Iran, given its role as a major oil producer, any disruption to Iranian production or exports could cause significant shocks to global markets. Meanwhile, the Zionist regime-imposed war against Iran could lead to an escalation of tensions and even the spread of the conflict to other countries in the region. As was predicted from the beginning, if this crisis leads to direct intervention by the US or a wider regional conflict, there is a possibility of a sharp increase in oil prices. For example, in the past, crises such as the Persian Gulf War in 1991 or the Iranian oil sanctions in effect through 2012-2015 caused significant fluctuations in oil prices. Historically, Brent crude oil prices have increased by up to 30% during similar periods of crisis. In the current situation, given the dependence of Europe and Asia on Middle East oil, any escalation of the conflict could push oil prices above $100 per barrel.

Energy Security

The Strait of Hormuz is one of the most important energy transport chokepoints in the world, with about 20% of the world’s oil consumption (about 20 million barrels) and 25% of liquefied natural gas (LNG) passing through it daily. Iran can influence this passage due to its geographical location. However, history has shown that Iran has not used this advantage to disrupt global energy security, even in critical situations such as the imposed war (1980-1988). This behavior demonstrates Iran’s commitment to maintaining a secure flow of energy to global markets. However, during the Tel Aviv-imposed war against Iran, there were threats and speculations about the possibility of blocking the Strait of Hormuz. This speculation was mainly raised by the Western media in response to the possibility of US intervention in the conflict. However, historical evidence and official statements by Iranian officials showed that Iran did not want to disrupt the Strait of Hormuz. In such a scenario, any disruption to energy exports from the Persian Gulf could have been the result of actions by the US or its allies, not Iran. For instance, tightening sanctions or military attacks on Iranian energy infrastructure could have reduced supply and increased insecurity in the region.

The US Role

As a major player on the international stage, the US plays an important role in shaping energy developments. Its policies, including sanctions or military interventions, may have direct effects on energy security. It was therefore estimated that in the event of direct American intervention in the Zionist regime-imposed war against Iran, the possibility of disruption in energy exports from the Persian Gulf would increase. This would not only lead to an increase in prices but also could fuel further instability in global markets. This was while, on the other hand, Iran had repeatedly emphasized its commitment to maintaining energy security and attributed any possible disruption to provocative actions by the other party.

Conclusion

The Zionist regime’s invasion of Iran, due to the country’s strategic location and its role in the energy market, had significant consequences for global energy prices and security. An increase in oil prices as a result of regional insecurity and concerns about supply cuts was the most likely outcome of this crisis. However, Iran, as a country that has historically supported and contributed to energy security, never actively attempted to block the Strait of Hormuz. Interestingly, Iran’s calculated response and management of tensions with the US once again demonstrated Iran’s maturity and situational awareness to the world.

However, it is noteworthy that despite Iran’s avoidance of blocking the Strait of Hormuz, the dependence of the global economy on Middle Eastern energy means that any escalation of the crisis in the future will lead to global inflation and pressure on oil-dependent economies. Therefore, given the key role of the Strait of Hormuz, the US and the Zionist regime should avoid escalating tensions in this region in the future because they will be responsible for the dangerous consequences of blocking the Strait of Hormuz and increasing oil prices. In the meantime, other countries in the region may also prove instrumental in containing and controlling the hostile policies of Washington and Tel Aviv.

War on Iran Ignites Long-Term Global Oil Instability

Fereydoun Barkeshli

Senior Energy Expert

The recent air strikes by the Zionist regime on Iran’s industrial centers, oil and gas facilities, and civilians have sent shockwaves through the global oil markets. The attacks led to a significant but short-lived increase in prices. This unprecedented, unlawful attack on Iran will have an accumulated pile of fractured geopolitical factors that will have a long-lasting impact on the world oil market and global economy. Geopolitical uncertainty and price volatility will have a profound and devastating impact that will hamper the markets in the medium to long term. The Zionist regime has attacked five countries during the past six months. Palestine, Lebanon, Syria, Yemen, and now the Islamic Republic of Iran have been attacked by this regime, and all with the support of the United States of America and the European Union. This region produces and supplies two-thirds of the world’s oil needs. Such ferocious and violent actions will have long-term ramifications for the consuming nations. Most of the Middle Eastern oil goes to Asian countries. China, India, Pakistan, countries of the ASEAN consume the bulk of this oil. The Zionist regime and the Western countries do not use this oil. As such, they are not the countries that suffer from long-term disinvestment and insecurity in this critical region.

Asia imported 86 % of the Middle Eastern oil in 1Q 2025. Asian countries also bought 82 % of the region’s gas.

Most international media outlets are interested in the global oil prices. They are traditionally attracted to oil prices and oil shocks. There’s much less attraction for gas prices. Europe imports LNG from Qatar and the United Arab Emirates. LNG prices are soaring, but headlines aren’t interested in reporting, and Europeans prefer to attribute gas price hikes to the Ukraine war.

Strait of Hormuz

Iran has proven time and again that the oil, gas, and energy doctrine of the Islamic Republic is based on demilitarization and depoliticization of the energy sector. For Iran, energy is not a weapon or warfare of choice. As one of the founding members of the Organization of Petroleum Exporting Countries (OPEC), Iran has repeatedly proven and confirmed that accessibility and affordability are the country’s most revered policies towards the global flow of oil.

Iran has repeatedly expressed its concerns over the unjust use of sanctions and price cap mechanisms used by the United States of America and other countries as a political and weaponry tool to intimidate other countries. Such practices have long-term adverse consequences on the principles of international energy justice advocated by OPEC (Charter of Cooperation).

Iran’s government was under pressure from several sources to apply some sort of blockade on the Strait of Hormuz. The Zionist regime tried to push Iran towards that objective to internationalize and further militarize the war in the Persian Gulf region. Tel Aviv misread Iran’s determination towards global oil supply security. However, as I will explain shortly, the international Security Assessment Firms have already raised their risk assessment scenarios that raise concerns over the long-term investments and involvement of companies in the whole region. Any non-market-oriented policy in the global oil market will have long-term ramifications for the geoeconomics of oil and energy, leading to insecurity of energy production and supply.

Short-Term Price Projection

International Netherlands Group, ING, which is the largest oil and derivatives trading house in Europe, has raised its May 2025 price projection from $65-70 range in the short term to $80-84 per barrel by the 4Q 2025. Nevertheless, credible sources estimate a sharp rise in crude oil prices in the three-digit vicinity of $110 to $120 per barrel if the Zionist regime continues its air strikes.

According to the World Bank Report, published on 18 June, the world oil demand is expected to grow to 105.6 million barrels per day during the second half of 2025. The World Bank report concludes that once global oil demand exceeds the 109 to 110 million barrels per day threshold, the current capacity expansion projections will not cover the demand. The global supply security and affordability will be critically undermined.  I will deal with this shortly.

The Zionist regime has shown that it can go to any extent and hurt everyone to achieve its goals. On Monday, 30 June, the Zionist regime’s air forces struck the Phase 14 South Pars gas field in Iran. A joint gas field shared between Iran and Qatar. There was a short disruption in the operation in phase 14 of the South Pars gas field that was reversed and returned to normal, even though the Zionist regime forces were still in the sky. Nevertheless, Chevron instantly lost 1.2 % and Exxon lost 1.7 % of their share values in the Global S&P when the markets opened on Monday, June 16. This was underreported and ignored by most mainstream news outlets. However, it clearly shows that the international energy markets are on the brink. Extremely sensitive and suspiciously silent on the share values of major oil and gas companies and investment partners, and prospects in the Middle East. Many major energy companies contemplate moving to South America and Africa to substitute the Middle East due to bleak prospects created by the Zionist regime’s policy of aggression against other nations. Having said that, the insurance rates for tanker crude carriers are high. The mild impact of the crisis is not exactly from price shocks, but from insurance and freight. Nevertheless, dark fleets that are engaged in US-led sanctions on oil add more to the costs due to ship-to-ship operations that engage the capacity of tankers.

By attacking Iran’s energy facilities, the Zionist regime spread the aggression from the military to the energy zone. This indicates that Tel Aviv has no respect for the energy security of nations. However, Iran had to retaliate by striking refineries in the occupied Palestine.

In the meantime, as currently marked fundamentals suggest, global oil markets are sufficiently supplied. Iran is loading over 1.7 million barrels per day to international destinations. OPEC+ is doing its job in maintaining the security of supply to the world markets. Storage tanks are full in major consumption centers. China’s strategic petroleum reserves (SPR) are at a year’s high, exceeding 1.2 billion barrels, which is sufficient to compensate for nearly three months, even if there are no oil imports. This level of SPR and commercial inventories is more than double that of America. As for Europe, they are the traditional loser of any energy disruption.

Long-Term Ramifications

The Zionist regime’s hostilities with Iran have been ongoing since the inception of the Islamic Republic in Iran. The Zionist regime seems to have US foreign policy as a hostage. On 17 June, a loaded US plane with missiles and ammunition that had landed in Kiev military airport and had unloaded parts of its cargo was instructed to load back, pack, and fly to Tel Aviv. The Zionist regime had already run out of enough military hardware, and the United States had to immediately supply the required equipment to the Zionist regime.

The war against Iran will lead to a permanent volatility in the global oil markets, where both producers and consumers suffer. Volatility will be the new normal. When we talk of volatility, we don’t mean very high oil prices or very low. International oil markets have already experienced very high and very low oil prices and survived. Volatility and uncertainty a situations where major stakeholders remain undecided for some time. Even the period of indecision is not known to major participants.

Such a stage basically disillusions investors. They miss the track. Such a situation is valid for conventional oil as well as shale oil.

Beyond the Barrels

On the diplomatic front, Beijing was the first capital that wasted no time to come up and condemn the airstrikes on Iran. The Chinese president was in the Central Asian Republic of Kazakhstan for the annual Shanghai Cooperation Organization ( SCO). The Organization traditionally works with consensus, that is to say, that for every decision, all members should agree. In this summit, all SCO members condemned Tel Aviv in a strongly worded statement. Pakistan went as far as threatening the use of atomic weapons if Iran were attacked by Tel Aviv with a nuclear weapon. However, distanced itself from the SCO Summit and made it clear that they weren’t part of the statement.

A similar configuration was noticed within BRICS, which is now a formidable force on the world stage today. They came up with full support of Iran without India. China is engaged in a quiet but serious energy diplomacy in the South. China relies on the Middle East for as much as 45 % of its oil imports.

As mentioned earlier, the escalating tensions between the Zionist regime and Iran will hit business confidence in the Persian Gulf Cooperation Council, the GCC, with the rest of the region and the world. The latest geopolitical risk report by S&P Global Ratings and its the warning that goes as long as a warning of a trickledown effect that could impact the region’s IPO pipeline and put valuations at risk.

As of the time of writing this article, no Initial Public Offering (IPO) has yet been delayed since the air campaign against Iran began. However, all analysts share the vision that the risk premium has been upgraded permanently.IPO for National Oil Companies, like Aramco, ADNOC, and Kuwait Petroleum Company, are expected to be less attractive for international investors. Investors will think twice before making any decisions to buy shares from IPO ventures.

Energy Diplomacy

Most analysts and market observers are puzzled and trying to figure out how and why conflicts and crises as huge and unprecedented as attacks on Iran do not reflect themselves in oil price hikes dramatically. Heightened geopolitical risks have mostly been viewed in terms of high oil prices. Long-term factors are often neglected. The structure of global oil markets has changed, undergone a significant transformation. The United States is self-sufficient in oil production and has even posed as a major oil exporter. America needs the Middle East, not for its own energy needs and safety, but in order to make sure that China and other major economies’ consumption is rationed and controlled by the United States.

Prices do rise instantly, but over time, and are related to insurance costs and freight. There are currently some 6500 oil tankers floating the international waters daily. No new ULTRA Large Crude Carrier (VLCC) has been built since 2005, and five new VLCC tankers have been built since then. Tanker fleets are aging fast, and no replacement anytime soon. This is happening under the pretext that the oil age would be coming to an end by 2035. A lie that has engulfed the energy industry since the Paris Climate Accord and the emergence of environmentalists in Europe in the early 2000s.

In the meantime, the Middle Eastern governments also rely on America for their safety and survival. The US is in the business of weaponizing the economy and energy at will. When investors flee the Persian Gulf region, they end up in America, where capital and investments are in dire need.

I should reiterate that the fundamental factor in physical crude oil is outdated, but the future markets work on capacity factors. The market hedging relies on what volume of physical oil that will be made available a decade from today.

Middle East and Beyond

The world economy is teetering. Manufacturing data and traveling patterns that demonstrate the performance of economic growth remain sluggish. On top of the US economy is in a disastrous shape.

As of the Federal Reserve Bank Board report of May 2025, the country’s debt stood at $38.6 trillion. To put this number into perspective, the US national debt has risen steadily over the years. The debt-to-GDP ratio, which measures the country’s ability to pay down its debt, has been rising, reaching nearly 100 percent. On a per capita basis, every American citizen is under $106,117 in debt. The annualized cost of servicing the debt is over $1.5 trillion, i.e., 16 % of total federal spending.

Those kinds of statistics mean that the US economy is shattered. The sole source of the strength of the American economy is the dollar as the universal currency. No country can afford such a large accumulation of debt externally and domestically. For now, all eyes are on the upcoming tariff negotiations between China and the United States. If the two agree on a mutually acceptable tariff regime, there could be a relative, temporary equilibrium in the market, and the US economy would be safe until the November 2026 midterms congressional elections in the US. However, the US economic performance is in a bad shape. The debt trap for the American economy is alarming. Its collapse is damaging, and survival will threaten world peace and stability.

Attack on the Heart of Energy Security

Afshin Javan
Energy Economist

Introduction

Energy security scholarship has long recognized the interconnected nature of global energy systems (Yergin, 2006; Winzer, 2012). The concept encompasses not merely the availability of energy resources but also the stability of supply chains, market predictability, and the resilience of energy infrastructure. Climate policy literature similarly emphasizes the need for coordinated international action and stable investment environments to achieve decarbonization goals (IPCC, 2022).

The intersection of these two domains creates what scholars term the "energy security-climate nexus," wherein actions affecting one domain inevitably influence the other. This framework provides the analytical foundation for examining contemporary policy contradictions. Over recent years, Western nations have increasingly emphasized the importance of energy security, sustainable energy development, and global cooperation on climate change. Paradoxically, these same actors have engaged in actions that undermine the stability of some of the world’s most strategically significant energy regions. Such interventions often occur with limited regard for established legal frameworks, ethical considerations, or the broader consequences for global energy markets. This contradiction is evident: countries advocating for environmental stewardship and a stable, interconnected energy future are, at times, destabilizing the very foundations of the global energy system.

Strategic Importance

The targeted region, which possesses some of the largest reserves of oil and natural gas, is integral to the global energy supply chain. Its geopolitical significance extends beyond resource provision; it plays a crucial role in maintaining the stability of international energy markets. Nevertheless, recent actions by Western powers—including military interventions, economic sanctions, and diplomatic pressures—have disrupted the delicate balance necessary for global energy security.

Contradictions in Rhetoric

While Western leaders publicly support unified approaches to energy security and environmental responsibility, their actions or tacit support for interventions in energy-rich regions often contradict these stated principles. The lack of legal justification for such actions further undermines the credibility of international institutions tasked with maintaining global order and cooperation. These interventions not only damage physical infrastructure but also erode the trust and collaboration essential for addressing shared global challenges.

For instance, sanctions and wars imposed on key energy-producing countries have caused significant disruptions to oil and gas exports, leading to price volatility and supply shortages worldwide. These measures not only weaken the economies of targeted nations but also jeopardize the energy security of other countries reliant on these resources. The resulting ripple effects extend beyond the immediate region, impacting industries, households, and efforts to address climate change. This raises a critical question: “How can the global community advocate for energy security and a green transition while simultaneously undermining the infrastructure essential for supporting these initiatives?”

Consequences

The ramifications of these actions are far-reaching, particularly for developing countries already facing challenges related to energy access and economic development. Disruptions in supply may exacerbate existing hardships and hinder progress toward global climate goals as nations prioritize immediate energy needs over long-term sustainability.

Key consequences include:

1. Market Instability: Attacks on energy infrastructure, whether physical or economic, introduce significant uncertainty into global markets, resulting in increased price volatility and reduced confidence of investors.
2. Humanitarian Impact: Economic sanctions and related measures disproportionately affect ordinary citizens in energy-exporting countries, leading to increased poverty, unemployment, and social unrest.
3. Threats to Climate Objectives: Destabilizing major energy producers can impede investments in renewable energy technologies within those regions. Many oil-exporting countries are actively investing in solar and wind projects, leveraging their expertise in large-scale energy development. Disruptions to their economies may therefore slow down global progress toward a sustainable energy transition.

Responsible Leadership

It is imperative for the international community to acknowledge the interconnectedness of energy security and global prosperity. Actions targeting energy-rich regions must be evaluated in terms of their broader consequences, rather than being driven solely by narrow geopolitical interests. Effective leadership requires balancing ethical considerations with pragmatic realities.

Constructive diplomacy should replace coercive measures, with a focus on fostering mutual understanding and shared objectives. This approach includes supporting technological cooperation, facilitating investments in clean energy, and ensuring equitable access to global energy markets. It is noteworthy that the dual goals of energy security and climate action could be merely achieved through collaboration.

Conclusion

The stability of global energy systems depends on the security of regions that supply critical resources. Reckless interventions risk undermining both economic stability and efforts to address climate change. As the world seeks to balance the transition to sustainable energy with the need for reliable energy supplies, it is essential to approach these challenges with foresight, empathy, and a commitment to collective well-being. Failure to do so may result in deepening crises, including energy shortages and escalating conflicts, ultimately undermining the principles of sustainability and international cooperation.

In summary, a nation’s genuine commitment to energy security and climate action is demonstrated not by rhetoric, but by respect for the complex interdependencies that characterize the global energy landscape.

Energy Diplomacy in Persian Gulf

Seyed Ameneh Mousavi

On June 13, the Zionist regime launched a flagrant aggression against the Iranian territory, triggering a 12-day war between Iran and the Zionist regime. Despite all sanctions-induced restrictions, Iran managed to defend itself against the Zionist regime and its Western allies. Iran was defending its territory while it has never initiated any war during the past two centuries. Just like in the case of the 1980 imposed war that triggered an eight-year war, Iran this time also acted in self-defense. Iran and the Zionist regime finally agreed to truce brokered by Qatar and the United States. The administration of President Masoud Pezeshkian, while defending the Iranian territory and responding to the Zionist regime’s blatant aggression of the Iranian territory, has considered peace talks. Iran’s energy diplomacy with neighboring countries has been active because Iran continues to play a decisive role in the energy market.

The following is the full text of the interview Mr. Irani, a former ambassador to Lebanon, Jordan and Kuwait, gave to “Iran Petroleum”. Iran holds the world’s largest oil and gas reserves combined. Therefore, given Iran’s strategic position and massive energy reserves, any tensions in Iran would threaten the global energy market stability. Veteran diplomat Mohammad Irani says redefining relations with neighboring nations, particularly in the field of joint fields, may help boost technical cooperation while facilitating joint investment in the oil and gas industry. In an interview, he describes the current period as a “potential turning point” in Iran’s energy interactions with regional countries, which could change the game in Iran’s favor if it is managed smartly.

Below is the full text of the interview Irani, a former ambassador to Kuwait, gave to “Iran Petroleum”.

You always insist that economic development should be balanced. What sectors should Iran’s economic cooperation with Arab nations currently focus upon?

Currently, due to US sanctions, we face restrictions regarding access to sophisticated technology and petroleum industry equipment. But Persian Gulf littoral states face no such restrictions and they can easily benefit from cutting edge technologies. If we reach détente with the US to ease sanctions, we may return to pre-sanctions era, i.e. before Trump pulled out of the JCPOA and experience even better conditions. Under such circumstances, we need to benefit from all political, diplomatic and cultural capacities to broaden our energy cooperation with our neighbors. Cooperation in joint oil and gas fields may serve both sides.

You served as ambassador to several Arab nations during the first term in office of Mr. Hassan Rouhani. What solutions do you propose for Iran to improve its interactions with regional Arab nations?

During that period, tensions were running high between Iran and Arab countries. However, efforts have been made to reduce tensions significantly. Now we should move towards eliminating these tensions. That is the most fundamental step for any cooperation with regional countries. Meanwhile, we have disputes with some countries like Kuwait and Saudi Arabia on some oil and gas fields like the Arash field. Settlement of such disputes would require dialogue and active diplomacy. In the next phase, we have to upgrade Iran’s role in such organizations as OPEC and the GECF. That would be possible only by expanding ties with our neighbors. Regarding oil and gas production capacity hike, as long as sanctions are in effect, investment in the Iranian petroleum industry would face restrictions. Should such restrictions be lifted, rivalry will increase in the regional energy sector, in which case we should be ready for active presence in this rivalry.

Can we benefit from the post-JCPOA experience?

After the JCPOA was signed, we had reached good memorandums with some countries like Qatar. Talks were even held about development of joint fields, but everything came to a halt as soon as Trump quit the JCPOA. The JCPOA experience showed that political and economic convergence with neighbors would be helpful and profitable. Therefore, I insist that we should not separate political and economic cooperation from each other. They complement one another.

Under the Pezeshkian Administration, we’re witnessing attempts for improving regional relations. What do you think of that?

The fact is that oil-rich nations in the Persian Gulf should be analyzed collectively. They are members of OPEC and the GECF. Therefore, Iran can be influential through bilateral and multilateral cooperation. A comprehensive plan should be adopted for oil cooperation with neighboring nations. Such plan may be formulated in collaboration with the Ministry of Foreign Affairs and other concerned authorities so that we can benefit from regional potential. Regional economy would blossom when the interests of all countries are taken into consideration. Regional convergence is key to success in this regard.

How do you see the prospect of Iran’s energy cooperation in the region?

Undoubtedly, our current conditions are very different from the time sanctions are lifted. Once Iran’s financial, banking and technological conditions become normal, Iran would be able to rebuild its ties and win a high standing. Some Arab countries are currently trying to seize Iran’s energy market share, but our country’s geopolitical potential, and its unique situation as being crisscrossed by corridors are advantages most rivals are deprived of. For instance, China does not look at oil; rather it considers the entire economy of nations. Iran is a big and diverse market with great potential for Asian and Southeast Asian economic powers. In case sanctions are lifted, Iran’s return to its previous position in energy markets in the region would be profitable for many countries, including Arabs.

Persian Gulf Subsea Pipeline Laid

The head of Iranian Gas Engineering and Development Co. (IGEDC), Behnam Mirzaei, has said that a subsea pipe-laying operation has been carried out successfully in the Persian Gulf.

“Operations for laying the 3-km-long offshore section of the Bandar Abbas-Laft-Gourzin gas pipeline have been carried out successfully beneath the Persian Gulf,” he said, adding it was a key project in gas supply to Qeshm Island.

He said that for the first time in the history of Iran’s gas industry, horizontal-directional drilling (HDD) was used. “The HDD method is among the sophisticated ones for subsea crossing. In this project, it was all the more sophisticated because of the frequent passage of vessels, high depth, environmental considerations, and civil defense obligations,” he added.

Noting that the offshore route between Pol Port and Laft Port in Qeshm Island was the shortest and most suitable route for the Bandar Abbas-Laft-Gourzin gas pipeline, he said: “This pipeline has been laid at a depth of 70 meters, the first of its kind in Iran.”

Mirzaei said that despite technical complications and sanctions-induced restrictions, the operation was carried out by relying on the engineering expertise of Iranians. He added: “Relying on local technical know-how, precise planning and effective management, the construction team overcame restrictions and possible risks to bring the project to fruition.”

The successful implementation of this project marked a key step in gas supply to Qeshm Island, he said, adding: “Currently, necessary infrastructure has been provided for the sustainable supply of gas needed by industries, power plants, and residents of the island.”

The Bandar Abbas-Laft-Gourzin pipeline, 59 km long, is a strategic project in the development of the national gas transmission network. It marks a turning point in the realization of development objectives set by the National Iranian Gas Co. (NIGC) in southern Iran.

Free Fuel at 500 CNG Stations

The chair of the Board of Directors of CNG Union, Mohsen Johari, said 500 CNG stations started distributing free fuel.

“The number of contributing CNG stations is expected to rise,” he said, adding that there was a total of 2,500 CNG stations across the country.

“This project has started in collaboration with National Iranian Oil Products Distribution Co. (NIODPC) in the provinces of Isfahan, Zanjan, and Qazvin. The number is expected to rise in the coming days,” he added.

Johari said this campaign was aimed at reducing queues at fuel stations and promoting CNG use.

“The number of dual-fuel vehicles referring to CNG stations has increased. The more CNG consumption increases, the less demand there will be for gasoline,” he said.

Sustainable Output at SP Refinery 1

The director of the first refinery of South Pars Gas Complex (SPGC) has said that technical and development measures have helped preserve quality and boosted the sustainability of production at refineries.

Ali Ahmadi highlighted the significance of preserving quality and guaranteeing maximum production, saying: “Replacing the molecular sieve, boosting instruments, and considering projects for redesign and repair in various sectors of the refinery are among the most important achievements this year.”

Noting the high significance of resolving problems associated with the power transmission system, he said: “The PD test has been carried out on the high-voltage power network of the refinery, and subsequent measures are underway for resolving problems with precise planning.”

He said that such measures would help identify possible problems with cables that may threaten gas production stability, adding: “In the odorant unit, various projects on designing and redesigning equipment are underway, which would result in enhanced capacity and sustainable production. The production of this unit is currently stable.”

Referring to the high significance of the telecommunications building in radio communications between sites 1 and 2 of South Pars, he said: “The project for supporting power supply for the telecom building and the ICT equipment has been finished to prevent disruption in the work when power is cut to the refinery.”

Regarding infrastructure repair, he said: “The overhaul of the gas condensate storage tank B has been carried out in the shortest possible time.” He said GTG compressors had also been repaired.

Ministry of Petroleum Endeavor During 12-Day War

A member of the Majlis Energy Committee has praised the Ministry of Petroleum for its performance during the 12-day war imposed on Iran by the Zionist regime.

“During those days, the entire Ministry of Petroleum, from the minister in person to directors, deputies, and service workers, did sacrifice,” Mousa Mousavi said.

“In this unequal war imposed by the Zionist regime on the country, the most important concern for people was fuel supply, in which case the Ministry of Petroleum did a praiseworthy job,” he added.

“During the early days of the outbreak of the Zionist regime-imposed war, we saw long queues at fuel stations as people were worried about a possible fuel shortage, but as time passed, the queues were shortened and everyone realized that there was nothing to worry about during this time,” said Mousavi.

He appreciated the petroleum industry staff, saying: “The Ministry of Petroleum did its best to spare oil and gas installations from enemy attacks while ensuring a sustainable fuel supply.”

In a blatant violation of international law and national sovereignty of the Islamic Republic, the Zionist regime on June 13^th struck Tehran and some other cities, including nuclear installations. Several military commanders, nuclear scientists, and civilians were killed.

The war ended after 12 days under a ceasefire announced by US President Donald Trump.

Iran’s Key Role in Energy Markets

The US military strikes on Iran’s nuclear facilities on June 22, which President Donald Trump heaped praise upon, significantly impacted world energy markets.

That revived concerns about a spike in oil prices, but apart from that, it showed Iran’s determining role in the oil and gas market.

Iran is a founding member of the Organization of the Petroleum Exporting Countries (OPEC) and a key member of the Gas Exporting Countries Forum (GECF). Besides playing a fundamental role in global energy supply, it wields clout with global markets due to the world’s dependence on oil and gas resources.

Iran sits atop the world’s second-largest oil and gas reserves, and its geopolitical position, particularly its control of the vital Strait of Hormuz, makes it a key player in securing global energy flows. The Strait of Hormuz is the route through which about 20% of the world's oil exports pass, and any disruption in the region could cause prices to skyrocket and destabilize global markets.

Following the US military strikes, economic analysts drew up several scenarios for the future of the oil market. Oxford Economics warned that if Iran’s oil exports were to halt or the Strait of Hormuz were to be closed, the price of Brent oil could rise to $130 per barrel, which could trigger a new wave of inflation in the global economy and negatively impact economic growth.

Despite economic pressures and widespread sanctions, Iran has always emphasized balance in the oil market and has played an active role in OPEC negotiations to maintain price stability. Iran’s approach is that a fair price for oil and ensuring a stable supply are in the interests of all parties in the market.

In addition to oil, Iran, as one of the world’s largest holders of natural gas reserves, plays a vital role in addressing energy security. Iranian gas, if sanctions barriers are removed and investment is attracted, could help diversify gas sources and increase regional and global energy security.

It is wrong to think that sanctions or military action can eliminate Iran’s role in the energy market. Geopolitical tensions only highlight Iran’s importance and position. Long-term stability of the energy market and reduction of economic risks from price fluctuations are only possible with Iran’s active participation in global negotiations and decision-making.

Experience has shown that after every major crisis in the Middle East, the oil market eventually reaches equilibrium with the return of Iran and other key producers to the supply cycle, so sanctions and maximum pressure policies not only do not benefit either party, but can also have widespread negative consequences for the global economy.

Given the increasing demand for energy in the world, especially in Asian countries, the international community must pay attention to the fact that stability and security of the oil and gas market are not possible without cooperation with Iran. Ensuring security, lifting sanctions, facilitating investment in Iran’s energy sector, and strengthening multilateral diplomacy within the framework of OPEC and GECF are essential steps to maintain global energy security.

In a world where dependence on oil and gas resources remains intact, Iran is not a threat, but a vital and irreplaceable partner that may play a decisive role in ensuring global energy security. In other words, it is in everyone’s interest for Iran to be at peace.

Heavy Crude Transfer Capacity Rises

A top official with the Directorate of Production of National Iranian South Oil Company (NISOC) said that with the commissioning of a new 30-inch pipeline for transmitting light oil from West Karun fields, the 36-inch Ahvaz-Omidiyeh export pipeline has been reassigned to transmit heavy oil.

Mohsen Valavi said the operation of the new 30-inch pipeline allowed reassessment of oil transfer arrangements. The 36-inch Ahvaz-Omidiyeh pipeline, which had been used for light oil transfer from West Karun fields since 2020, has now returned to its previous function.

He added that this change has significantly improved heavy oil transmission operations, increasing capacity and playing a crucial role in managing critical conditions and force majeure cases.

The deputy of operations at NISOC’s production management further stated that this move has also enhanced the reliability of the transfer system and improved emergency response capabilities.

Valavi noted that the successful implementation of this project followed multiple field inspections and technical meetings led by the operations division, with efforts from technical, engineering, and support teams at the Karun, Maroun, and Aghajari oil and gas production companies.

Petchem Sustainable Development with Environmental Obligations

The CEO of National Petrochemical Co. (NPC), Hassan Abbaszadeh, said respecting environmental obligations would be key to sustainable development.

“Expansion of cooperation and consultation between the petrochemical industry and the Department of Environment is on the agenda, and joint programs have been formulated and submitted for upgrading such interaction,” he said.   

He stressed the need for environmental governance, the responsibility of petrochemical companies, and reinforced cooperation with DOE.

Noting that industrial development is picking up speed in various nations, he said that neglecting the environment would make development unsustainable.

“Since starting its development, the petrochemical industry has held a specific view of the environment and sought to show effective convergence with environmental principles,” he said.

Abbazadeh said in his meeting with Shina Ansar, head of DOE, that joint plans had been decided upon.

Referring to NPC’s environmental plans, he said reducing flaring and using flare gas as petrochemical feedstock would be prioritized.

The bulk of gas flares are located in areas run by the National Iranian South Oil Co. (NISOC), in the proximity of the Special Economic Petrochemical Zone.

“Such giant projects as the Persian Gulf Bidboland refinery and NGL 3100 have been implemented by the Persian Gulf Holding for flare gas capture and pollutant reduction,” he said. “The Persian Gulf Bidboland refinery flare gas capture has been carried out in several provinces with $1.1 billion in investment. The second phase of NGL 3200 is set to come online in February,” he added.

Abbaszadeh said significant measures had been carried out for expanding green space, adding that 4,000 ha of new green space had been created, mainly in Khuzestan Province. “Furthermore, about 1,470 ha of mangrove has been planted by the petrochemical industry.”

Underscoring the necessity of a new water desalination project in the Petchem Zone, he said: “Under the 7^th National Economic Development Plan, industries should avoid using conventional water. Persian Gulf Fajr Energy Co. should be weaned off the Karun River water. This project would help preserve water resources.” 

He also said that NPC was determined to help combat desertification.

And regarding the necessity of energy efficiency, he said: “Such companies as Fanavaran Petchem Co. have taken effective steps in this regard by using surplus hydrogen instead of fuel. Amir Kabir Petchem Co. is also using surplus vapor.”

No Disruption in South Pars Gas Supply During War

CEO of Pars Oil and Gas Co. (POGC), Touraj Dehqani, said the giant gas reservoir continued production even during the 12-day imposed war on Iran by the Zionist regime.

He said a unit of the SP14 refinery had been damaged during the military strikes, which was repaired immediately.

“I feel compelled to offer my gratitude to my colleagues in various divisions of POGC, particularly service workers stationed on South Pars platforms, for their endeavor in fulfilling their responsibilities and ensuring maximum gas recovery,” he added.

“Maximum effort made by POGC staff continued despite wartime conditions dominating the capital. Alongside the unrivaled resistance and empathy of people in recent years, it presented a brilliant manifestation of national solidarity in Iran,” said Dehqani.

Since the very first hours of attacks, Dehqani was present in Kangan and Assaluyeh to issue necessary instructions to accelerate decision-making and conduct technical and safety measures.

“The accident was controlled immediately thanks to the efforts made by safety and firefighting teams and service workers. Necessary arrangements were made and SP14’s gas feeding into the national trunkline resumed,” he said.

Dehqani said meetings by the Directorate of Crisis Management and Civil Defense of POGC were held regularly in Bushehr Province in coordination with the POGC head office in Tehran since the very beginning of the 12-day war.

“In the meetings held for maximum readiness for countering possible threats and emergency conditions, all necessary arrangements were made to protect the health of staff, ensure safety of installations, guarantee maximum gas recovery from South Pars and carry out the annual overhaul of offshore platforms,” he said.

Boilers’ Repair Help Sustain Production

The head of mechanical reparation at the second refinery of the South Pars gas field, Hamid Bahoush, said application of innovative measures to boiler units helped sustain production at the facility.

Following the steam production decline last fall and winter, the second refinery of South Pars Gas Complex (SPGC), the boilers were overhauled in order to prevent production loss.

“Relentless efforts by staff and using local and innovative know-how spared SPGC the steam supply crisis,” he said.

Bahoush said the air inflow to boilers of the second refinery was identified as the main factor behind the loss of steam production, he said, adding: “Boiler 1 of this refinery was entirely decommissioned to be overhauled. The three other boilers suffered serious damage due to structural decrepitude.”

“Technical inspections and thickness test results showed that over two decades of continuous operation had resulted in a significant reduction in tube thickness. Therefore, an overhaul of all four boilers became an unavoidable necessity,” said Bahoush.

“This extensive operation relying on local know-how helped sustain steam production during a tough winter while showing the high commitment of staff in dealing with operational crises,” he added.

Ilam Gas Refinery Capacity to Jump 1.5-Fold

The CEO of Iranian Gas Engineering and Development Co. (IGEDC), Behnam Mirzaei, has said the Ilam gas refinery would see its production capacity increase 1.5-fold.

He said the second phase development of the Ilam refinery was a strategic project in the gas industry, adding: “This project is aimed at increasing the refining capacity, upgrading domestic manufacturing and creating jobs.”

The project is for the purpose of expanding the gas supply chain in western Iran, he said. Operating the second phase would increase gas refining at this plant 1.5 times. The key point is that by receiving sour gas as feedstock, this refinery is among the high-risk refining projects. Sour gas has a high concentration of H₂S.

He said 76% of the equipment and commodities used in the project was domestically manufactured. “Reaching this level of domestic manufacturing in light of specific feedstock conditions and the need for corrosion-resistant equipment and technical complexities indicates the high capacity of domestic industries in designing, manufacturing, and supplying refining equipment.”

Mirzaei underscored the significance of this project from social and economic aspects, saying all mechanical, welding, construction, and pipe-laying operations had been assigned to provincial contractors.

“The second phase of the Ilam gas refinery guarantees sustainable job creation in the coming years. Once fully online, hundreds of direct and indirect jobs would be created in production, reparation, logistics, and downstream industries,” he said.

He said that a strategy pursued by IGEC was to support local capacities, adding: “This approach would reduce costs and accelerate the pace of the project while developing local technical know-how, empowering manpower and stabilizing Ilam Province as a gas industry hub.”

Referring to the multifaceted role of the second phase of the Ilam gas refinery, he said: “In addition to supplying gas needs, this refinery would be instrumental in supplying such products as sulfur and condensate.”

Petchem Sector Supplies 600MWh Electricity

The director of energy efficiency at National Petrochemical Co. (NPC), Ali Rabbani, said petrochemical plants fed 600 MW hours of surplus electricity into the national grid.

He said the development came in response to a request from power utilities Tavanir and in light of the high yield of electricity generation in power plants. He added that 400MW of electricity is expected to be generated from renewables, 70MW of which could be fed into the national grid.

Rabbani said a series of approaches have been considered to boost industrial resilience, adding: “Using modern technologies and AI in energy consumption detection, particularly in 20% of the equipment consuming 80% of industrial energy, would yield favorable results.”

Highlighting implementation of energy efficiency projects, he said: “Some approaches like flare gas capture, investment in the upstream sector, and expansion of the energy mix for more resilience are among the priorities of industrial managers.”

He said that, owing to efforts made by managers and experts, 76% of companies have no standard deviation in terms of energy consumption. “The country’s energy mix and the petrochemical industry are entirely gas-based. Given the dependence of this industry on gas for power generation, utilities, processing fuel and feedstock, efforts would be made to use renewable energies in the petrochemical industry in parallel with launching efficiency projects and investing in production.”

Referring to the necessity of using renewables in the petrochemical industry, he said that NPC is required to use 10MW of renewable electricity.

He said that some projects had been considered by the NPC to generate more than 2,000MW of renewable electricity. He added that 400MW is expected to come online by next March.

Rabbani said the petrochemical industry has taken measures to use wind energy in addition to solar energy.

“Using renewable energies in the petrochemical industry requires transmission of generated power to the national grid so that, if need be, the necessary electricity would be supplied from the network,” he said.

Bright Future for Iran’s Petchem Sector

With over four decades of a brilliant record, Iran’s petrochemical industry has gone beyond supplying domestic needs despite international restrictions and sanctions, even winning a strategic standing in the global markets. Iran is one of the largest petrochemical producers in the Middle East, supplying petrochemicals to more than 30 nations, including China, India, and Turkey. Iran’s share of Middle East and global petrochemical trading is 30% and 2.7%, respectively.

Iran’s petrochemical industry recorded a nominal capacity of 96 million tonnes last Iranian calendar year to 20 March 2025. Iran is set to reach 100 mt production capacity by 21 June 2025. Under the 7^th National Development Plan, the petrochemical industry would experience an annual 8% growth on average to reach 132 mt. Value chain completion in the petrochemical industry and achieving economic diversity are among Iran’s general policies.

Figures Speak Louder

Iran’s petrochemical industry is the second source of foreign currency income, just behind crude oil, playing a key role in economic development. Given the petrochemical sector’s influential role in the economy and industry, Iran has adopted the strategy of value chain completion and reducing dependence on raw materials sales by developing the petrochemical industry.

Based on this policy, Iranian petrochemicals are diverse, producing various products from methanol to polyethylene, polypropylene, urea, and chemical fertilizers. Diversifying its exportable products and improving their quality, Iran has boosted its share of global markets. Iran enjoys a certain status in supplying some products, like methanol. According to international reports, Iran is the world’s second-largest supplier of methanol, accounting for over 16% of global methanol output.

Based on customs data, Iran’s petrochemical exports are growing. Iran exported $19.7 billion worth of petrochemicals during the first three months of last calendar year, up 32% year-on-year. This growth mainly results from increased output, as well as the completion of petrochemical development projects. However, the key role of knowledge-based companies should never be ignored because by offering modern technologies and optimizing processes of production processes, these companies help upgrade quality and reduce production costs. That would make Iranian petrochemical products competitive in global markets.

Last Iranian calendar year to 20 March 2025, Iran’s petrochemical industry saw the operation of new projects that boosted the production capacity and contributed to further diversity in products. Phase 1 of the Hengam petrochemical plant and the Aryan methanol plant are cases in point. Iran exported roughly 80 mt of petrochemicals in the last Iranian calendar year to 20 March 2025, earning the country $13.5 billion.

Petchem Strengths

Among nations rich in hydrocarbon reserves, Iran is a key player in the petrochemical market as it holds the world’s second-largest gas and the fourth-largest oil reserves.

The abundance of low-cost feedstock is a strategic advantage, enabling Iran to supply basic petrochemicals at much lower costs than rivals. Wood Mackenzie, a research institute, has predicted that Iran would remain a profitable petrochemical supplier despite uncertainties about global growth, thanks to low-cost feedstock available in the country.

A variety of reasons may be offered to explain the progress of the petrochemical industry in Iran and the standing the country has achieved in the global petrochemical market. Some of them are Iran’s relative advantage in feedstock supply, low-cost energy and manpower, massive local consumer market, proper infrastructure mainly in southern Iran, like in Mahshahr and Assaluyeh, presence of the private sector, lack of price suppression, possibility of free exports, and geographical position.

The regional and global standing of the petrochemical industry, high attractiveness for foreign investment compared with other industries, access to big regional and global markets, proximity to the international watercourses of the Persian Gulf and the Gulf of Oman, increased global demand for petrochemical products and major consumer markets like India and China constitute the most important opportunities for Iran’s petrochemical industry.

A competitive advantage of Iran’s petrochemical industry is the low cost of oil and gas production. Compared with other nations, each barrel of oil costs much less in Iran, thereby making the petroleum industry more lucrative. Meantime, Iran’s petrochemical industry supplies a wide spectrum of products, including ethylene, propylene, methanol, ammonia, polymer, and chemicals, used in car manufacturing, packaging, medical, and agriculture sectors.

Geopolitics Impact

One reason for Iran’s remarkable standing in the global petrochemical market is its privileged geographical status that has created unrivalled conditions for producing, exporting, and transiting petrochemicals. Owing to its access to the Persian Gulf, the Gulf of Oman, and the Caspian Sea, Iran enjoys a unique geographical position, facilitating petroleum and petrochemical products exports.

Iran’s geographical position and its proximity to big consumer markets like China, India, Southeast Asia, Eastern Europe, and Arab nations facilitate exports. Access to the high seas also removes any need for a third party to be involved in exports.

Iran also lies at the intersection of regional commercial

corridors. Railway and road transit potential can, in the near future, turn Iran into a regional hub for petrochemical trading, provided that necessary investment is made in logistics and transport infrastructure.

Investment in Value Chain

The petrochemical industry has the largest production value chain among various industries. Petrochemicals are used as raw materials in car manufacturing, textiles, household appliances, and packaging, among other sectors. Completing the value chain of this industry and the development of downstream industries would generate higher value-added and more jobs, let alone increase economic resilience against external threats. Therefore, the petrochemical industry’s investment in lower-value products would reduce the price of Iranian petrochemical exports to one-tenth of the prices in Germany and one-third of the prices in South Korea.

Although Iran’s petrochemical industry is endowed with such unique advantages as low oil and gas production costs, diversity of petrochemical markets and a stable market, access to high seas and strategic commercial routes, a requirement for attracting foreign investment would be a complete value chain, a concept not limited to basic production; rather than involving value-added generation from raw materials, supply of final products and global competitivity.

Generally speaking, value chain completion in the petrochemical industry is especially important as foreign investors are interested in projects with a sustainable sales outlook and diverse markets. By supplying such final products as resins, compounds, and raw materials for packaging, car manufacturing, and household appliances, the downstream sector of the petrochemical industry offers such advantages. Meanwhile, with the completion of the value chain, the value of raw materials would rise significantly. The existence of a full value chain would also create a more competitive infrastructure for international companies. Such companies often seek to enter markets whose various production and distribution links would be integrated and manageable.

With foreign investors present in the downstream industry, not only will capital enter the country, but also technical savvy, modern technologies, global standards, and management models will be injected into the local industry.

In the coming years, Iran’s petrochemical industry intends to strengthen competitiveness and sustainable development to implement large-scale development plans. One top priority would be to enhance the manufacturing capacity of higher-value products. Based on National Petrochemical Co. (NPC) forecasts, Iran’s petrochemical production capacity would exceed 130 mt by the next Iranian calendar year. Such capacity growth would materialize by focusing on the supply of new products like advanced polymers and specific chemicals.

Meanwhile, international cooperation and absorbing foreign investment would be the key solution to developing the petrochemical industry. For instance, projects such as the development of new phases in Assaluyeh and joint investment with international partners are seen as strategic projects for the future.

Focus on Value Chain

The petrochemical industry is a significant and key constituent of the 7^th National Development Plan, which emphasizes the completion of the value chain of the petrochemical industry. Previous plans targeted 100 mt production capacity, but under the 7^th Plan, the target is 131.5 mt to complete the propylene, methanol, ethylene, ammonia, and aromatics value chain. Generally speaking, the 7^th Plan offers opportunities to the petrochemical industry. For instance, there is an incremental feedstock discount in favor of investors in the petrochemical sector. It also considers allocation of at least 40% of the margins of petrochemical companies or holdings to investment in value chain development, so that portions of the benefits of companies would finance the consumption chain development. 

Meanwhile, about 50 projects are underway under the 7^th Plan, requiring about $24 billion in investment. Half of this amount has already been provided, and the remaining half would come from equities, local resources, and foreign financing.

Petchem Hub

Given the daily growing industrial needs in the world, Iran’s future petrochemical market is highly significant. Thanks to its rich natural resources, strategic position, and specialized manpower, Iran is set to become a major hub of petrochemical production and export in the coming years.

Further investment in petrochemical infrastructure and the development of modern technologies would enable Iran to get a significant share of global markets, particularly with regard to polymers, chemicals, and modern products. Increased focus on East Asian, European, and Latin American markets in the coming years would give rise to new opportunities for developing Iranian petrochemical exports.

Furthermore, international cooperation and partnership with leading companies are among the key steps for upgrading Iran’s position in these markets. Iran is expected to become a competitive hub at the global level in terms of the production and export of petrochemicals.

Early Overhaul, Key to Sustainable Gas Supply

Gas makes up 70% of Iran’s energy basket. In parallel with the gas production network, the gas transmission logistics network should function continuously to guarantee gas supply, which requires active gas production and transmission facilities. During seasons with low gas production and transmission load, planning starts for the overhaul of the transmission network in the run-up to the cold season. National Iranian Gas Co. (NIGC) in November started planning for overhaul in the current calendar year. Mohammad Reza Jolaei, head of NIGC production supervision and coordination, said: “Gas consumption in the household sector in cold months averages 500 mcm/d higher than the first half of the year. Therefore, in a bid to leave behind the winter safely, we embarked on overhaul in April.”

“Unlike previous years where the overhaul of refineries got the go-ahead in May, we began work in April and based on our planning we would not experience any overload of national gas grid in winter,” he added.

Refinery overhaul is a necessary and key operation that is carried out for increasing the efficiency of equipment and parts. Given the specific age of equipment and parts, after which they need reparation or change, overhaul of refineries is carried out during regular periods based on technical inspection planning. One key challenge in overhaul pertains to the halt in the function of equipment. In case the overhaul work occurs in the second half of the year, challenges would emerge due to growing gas demand in winter.

Grid Overload

Jolaei said the first measure in the current calendar year pertained to the overhaul of the south Pars, Hasheminejad and Parsian gas refineries.

Referring to the start of overhaul in the current calendar year and forecasts for results, he said the number of facilities and limited timing were also among factors leading to early overhaul.

“NIGC owns 20 refineries. Currently four refineries are being repaired and the work would be done on all refineries by October. In fact our overhaul planning should be based on a process to prevent production from a falling below a specific limit,” said Jolaei.

SP Leading Overhaul

Overhaul operations at the 13 refineries of South Pars Gas Complex (SPGC) are done every year with a view to reducing operational risks, increasing the useful life of equipment, upgrade performance and guarantee sustainable production in cold seasons. In the current calendar year, operations for this purpose began in Refinery 9 (SP12) and ended after 13 days. Then came the second phase. Meantime, overhaul of Refinery 13 (SP14) came to an end.  Meantime, on June 10, Israel struck the SP14 refinery, which disrupted the operation of one

of four units. But on June 26, the damaged unit was reconstructed and backonline. That was followed by the overhaul of Refinery 7. Through overhaul of Refinery 7, more than 180 items including exchangers and tanks were inspected precisely. Moreover, in light of the significance of maintenance of vital infrastructure, more than 180 electric items at the substation and more than 20 instruments were inspected. Key equipment was replaced and sustainable development projects were carried out.

From June10, the third refinery of SPGC, which is instrumental in gas supply to national grid, underwent overhaul based on 726 reforming and 577 preventive measures.

Safe Production

An advantage with overhaul is that is lays bare possible problems like corrosion before they can grow into serious risk. Therefore, overhaul spares industries significant costs that they may suffer, which would add to the useful age of equipment. In the end, overhaul results in safe and sustainable production. It also prevents minor and numerous harms that may occur between overhaul periods, specifically because most refineries are fed with sour gas.

Noting that sour gas gives rise to corrosion, Jolaei said: “For the purpose of examining and controlling these consequences of use of sour gas, periods are defined for inspecting installations and possible repair work. Each visit has its own frequency. Sometimes it may be done on a yearly basis or every two to three years. But on usual, every year, one equipment is inspected. The equipment is technically examined based on rules and regulations.”

Positive Balance

Jolaei said in some cases developers and the engineering unit carry out modifications at refineries. In general, periodical overhaul would prevent unwanted reparation through year, particularly during cold months.

Touching on the significance of timing of overhaul, he said: “In a bid to prevent any halt or reduction in production, the timing of overhaul is highly significant. Consumption is lower in the first half of year than in the second half. In households, the average consumption is about 160 mcm/d now, which reaches 700 mcm/d in winter. Therefore, the output balance would become positive in the first half. We benefit from this positive balance to start our repair activities. About 40-50 mcm/d would be cut from the 800 mcm/d output during overhaul.”

Risk-Based Inspection

Jolaei also referred to overhaul spendings, saying: “We’ve a number of overhaul contracts that are drafted on an annual basis and we estimate the overhaul costs in the contracts because by the end of each year we know which refineries would need overhaul the following year or how chemicals should be replaced. We have a general understanding of the overhaul plans of refineries. Each refinery has its own separate overhaul contracts and their financing is done domestically.”

One key strategy in most developed nations is to reduce the duration of overhaul intervals. One method of overhaul is risk-based inspection (RBI). RBI is an optimal maintenance business process used to prioritize inspection equipment such as pressure vessels, heat exchangers, and piping in industrial plants. The RBI concept lies in that the risk of failure can be assessed in relation to a level that is acceptable, and inspection and repair used to ensure that the level of risk is below that acceptance limit. It examines the health, safety and environment and business risk of ‘active’ and ‘potential’ damage mechanisms to assess and rank failure probability and consequence. Jolaei said NIGC has applied RBI in order to identify errors and challenges.

Regarding application of other modern methods, particularly new technologies, he said: “These companies that have entered into overhaul contracts with NIGC may be required in some cases to use new cutting-edge technologies, like 3D prints, test and manufacturing processes of alloys and high-tech industries. NIGC has taken steps with regard to modern technologies that are widely used in construction. We have formulated a digital transformation roadshow based on which we are moving ahead and overhaul is predicted in the roadshow.”

Winter Stability

It is the first time in recent years that overhaul began in April with operations going on fully. Gas refineries are expected to prepare for sustainable production in winter at higher quality.

“Sour gas causes corrosion in most refinery equipment and it is necessary to examine anti-corrosion substances. If need be, corrosion-hit parts should be replaced,” said Jolaei. “We have to carefully make plans so that the end of chemicals’ life and equipment corrosion would not coincide with winter. Such reparation is time-consuming and may last up to one month. If they occur in cold seasons they will incur heavy damage because we would have to cut gas production significantly. Therefore, all necessary actions associated with overhaul in the first half of year would help us experience sustainable production in winter.”

Czechs Sign Nuclear Reactor Deal with South Korea

The Czech Republic’s government signed a deal with the state-run South Korean KHNP power utility to build two nuclear reactors in the country.

The contract between the dominant power company CEZ, where the Czech state has a majority stake, and KHNP was signed just a few hours after an appeals court dismissed a lower court ruling that blocked the government from signing the contract.

Prime Minister Petr Fiala called it “a crucial step” for the country to become more energy self-sufficient and secure.

“Nuclear energy is important for the Czech Republic,” Fiala said.

Earlier, the Supreme Administrative Court said that the ruling was not in line with law, meaning the signing of the deal could go ahead.

KHNP won a lucrative public tender last year, beating a competing bid by France’s EDF.

The two new reactors will be built at the existing Dukovany power plant in an effort for the country to wean itself off fossil fuels.

The contract between CEZ and KHNP was due to be signed on May 7, but EDF lodged a legal challenge at the regional court in the second-largest Czech city of Brno after the Czech anti-monopoly office dismissed its complaint about the tender.

The two new reactors will complement Dukovany’s four 510-megawatt units that were completed in the 1980s. The total cost is 407 billion koruna ($18.7 billion), CEZ chief executive Daniel Beneš said.

The first new reactor is expected to become operational for a trial by 2036, the second about two years later.

Unlike its western neighbors Austria and Germany, the Czech Republic is doubling down on nuclear power and renewable energy sources after deciding to phase out coal for energy generation by 2033 to reduce carbon emissions.

The Czech Republic already relies on six nuclear reactors to generate more than a third of its electricity. Besides four in Dukovany, state-controlled power company CEZ operates two 1,000-megawatt reactors at the Temelin plant.

US LNG Output Drops in May from April Record

U.S. liquefied natural gas (LNG) output fell in May due to plant outages and maintenance at the country's largest export facility, preliminary LSEG ship tracking data show.

The U.S. is the world's largest LNG exporter and monthly changes in production can impact global LNG prices.

Of the 8.9 MT of LNG exported from the U.S., 6.05 MT or 68% went to Europe, the same percentage as in April, LSEG data showed.

Exports to Asia remained relatively low with 1.88 MT or 21% of total exports, compared to 2.05 MT or 22% of total exports in April, LSEG data showed.

Stronger domestic production, pipeline imports, renewable generation and weak industrial demand have kept Chinese demand muted and China, the world's largest LNG user, continues to resell U.S. LNG to avoid paying retaliatory tariffs as the trade dispute continues between the world's two largest economies.

Prices at the Asian benchmark Japan Korea Marker (JKM) slid to $11.83 per MMBtu in May, down from $12.23 in April but up from an average of $11.10 in May 2024.

Exports to Latin America also fell with .66 MT sold in May compared to .68 MT in April.

Egypt bought 3 cargoes for a total of .22 MT, while Bahrain bought one cargo for .07 MT. One cargo also left Cheniere's Sabine Pass plant on May 23, but was in the Caribbean Sea with no clear destination, LSEG ship tracking data showed.

Stronger domestic production, pipeline imports, renewable generation and weak industrial demand have kept Chinese demand muted and China, the world’s largest LNG user, continues to resell U.S. LNG to avoid paying retaliatory tariffs as the trade dispute continues between the world’s two largest economies.

Prices at the Asian benchmark Japan Korea Marker (JKM) slid to $11.83 per MMBtu in May, down from $12.23 in April but up from an average of $11.10 in May 2024.

The United States is poised to increase LNG production later this year as Cheniere starts up four of its seven midscale trains at Corpus Christi, Golden Pass LNG LLC’s project produces its first LNG, and Venture Global Plaquemines facility completes construction.

India Russian Oil Imports Hit 10-Month High

India’s imports of Russian crude oil surged to a 10-month high of 1.96 million barrels per day in May, driven by continued availability at significant discounts compared to global benchmark prices, according to ship-tracking data from Kpler.

India, the world’s third largest oil importing and consuming nation, bought from abroad around 5.1 million barrels of crude oil, which is converted into fuels like petrol and diesel in refineries.

Of this, Russia was the largest supplier, accounting for over 38 per cent of the supplies. Iraq maintained its position as the second-largest supplier, with 1.2 million bpd of sales to India.

Saudi Arabia exported 6,15,000 bpd, while the United Arab Emirates (UAE) supplied 4,90,000 bpd. The United States routed out the top five, delivering 2,80,000 bpd, underscoring India’s push to diversify import sources and balance geopolitical exposure.

“Overall, India’s crude import profile for May 2025 highlights its price-sensitive, diversified sourcing strategy. Russian volumes remain elevated despite external pressures, reinforcing the primacy of economic pragmatism in India’s energy policy,” said Sumit Ritolia, Lead Research Analyst, Refining & Modeling at Kpler.

India, which has traditionally sourced its oil from the Middle East, began importing a large volume of oil from Russia soon after the invasion of Ukraine in February 2022. This is primarily because Russian oil was available at a significant discount to other international benchmarks due to Western sanctions and some European countries shunning purchases.

This led to India’s imports of Russian oil seeing a dramatic rise, growing from less than 1 per cent of its total crude oil imports to a staggering 40-44 per cent in a short period.

Ritolia said Russia continues to offer crude at notable discounts compared to benchmarks like Brent and Dubai or compared to Middle Eastern grades on a landed cost basis.

“The strong inflow of Russian barrels into India is driven by a combination of economic, operational, and geopolitical factors,” he said.

A key advantage lies in the pricing of Urals crude from Russia, which, although not always steeply discounted, remains significantly cheaper than West African and Middle Eastern grades.

“This pricing edge has supported stronger refinery gross margins for Indian processors. For instance, in May, average FOB prices for Urals stood around USD 50 per barrel, comfortably below the USD 60 a barre; price cap set by Western allies,” he said, adding this favorable pricing attracted substantial shipping capacity – at least 20 tankers, previously dedicated to non-sanctioned trades, were repurposed to transport Urals.

As a result, export volumes rose notably.

He saw Russian crude retaining a 30–35 per cent share in India’s import mix, especially if refining margins remain strong, FOB economics continue to be favorable, and sanctions remain limited in scope.

“However, there are some small headwinds to look at on the horizon. Kpler data suggests a modest rebound in Russian refinery throughput, potentially increasing by 1,00,000-3,00,000 bpd in the coming months. This could reduce Russia’s export availability by a corresponding margin and may slightly temper flows to India post-May,” he said.

India is likely to maintain a diversified crude basket, but Russian barrels will remain central to its import strategy – provided discounts persist and payment mechanisms remain viable, he added.

With the monsoon season approaching, some Indian refiners may reduce crude runs, which could temporarily affect imports, particularly of sweeter grades, he noted.

Crude exports from the Middle East to India are expected to retain a stable to slightly lower share in the near term, influenced by seasonal refinery patterns and continued competition from Russian supplies. Nonetheless, the region’s long-term strategic reliability ensures that it remains an important component of India’s supply chain.

When Russia invaded Ukraine in February 2022, it triggered a series of sanctions from the US, the European Union, and other Western nations aimed at crippling Russia’s economy. One of the main sanctions was on Russian oil exports, which significantly impacted Russia’s ability to sell oil to European markets.

As a result, Russia began offering crude oil at heavily discounted prices in an attempt to find new buyers for its oil. India, with its large energy needs and an economy sensitive to oil price fluctuations, found this offer too attractive to ignore.

The price discount on Russian oil, sometimes as much as USD 18-20 per barrel lower than the market price of other oil, allowed India to procure oil at a much cheaper rate. The discounts have, however, shrunk in recent times to less than a fifth of the peak.

In December 2022, the G7 countries imposed a price cap of USD 60 per barrel on Russian seaborne crude oil exports. This measure restricts Western companies from offering insurance and transportation services for Russian oil sold above the capped price. The objective was to curb Russia’s oil revenues while maintaining a stable global oil supply. However, Russia has found ways to circumvent the cap, including acquiring a fleet of older tankers and finding alternative insurance.

US to Require Licenses to Export Ethane to China

Energy Transfer said it received a letter from the U.S. government requiring a license to export ethane to China, adding that the U.S. export terminal operator will file for an emergency authorization to continue exporting.

The move, which comes amid a broader trade fight between the U.S. and China including over Beijing's curbs on rare earths exports, adds pressure to U.S. ethane exports.

It forces producers of the natural gas byproduct to seek alternate buyers and raises costs for Chinese petrochemical firms, which rely almost exclusively on U.S. producers for ethane imports that are used to make plastics and chemicals and also for heating and cooking.

Another U.S. ethane exporter, Enterprise Products Partners said it received notice that the U.S. Commerce Department intends to deny its emergency requests to export three proposed cargoes of ethane totaling around 2.2 million barrels to China.

Enterprise had filed the emergency authorization requests after it received a letter requiring license authorization on May 23. Energy Transfer said it got its letter on June 3.

Enterprise shares were down 1.2% in after-market trading, while Energy Transfer's shares were down 2%.

The letters from the Bureau of Industry and Security, an agency of the Commerce Department, said exports of ethane pose an unacceptable risk of military end-use in China, according to both companies' filings. The BIS did not immediately respond to requests for comment on both companies. 

The denial of Enterprise's emergency requests calls into question whether this is just a short-term disruption, said Samantha Hartke, Vortexa’s head of Americas analysis.

"Near-term cargo reshuffles or resales could be necessary, as would a greater dependence on domestic storage," she said, adding that short positions in ethane were piling up.

The U.S. and China are locked in an ongoing trade war after U.S. President Donald Trump imposed sweeping tariffs in early April.

The Commerce Department said it was reviewing exports of strategic significance to China, while noting "in some cases, Commerce has suspended existing export licenses or imposed additional license requirements while the review is pending."

China's foreign ministry said such U.S. practices disrupted the stability of global supply chains and that Washington was weaponizing tech and trade issues to shut out and persecute China.

Adani Group Denies Sanctions Evasion

Adani Group companies are under inquiry by US prosecutors into whether they have been involved in importing Iranian petrochemical products, according to a WSJ report.

The US authorities are probing whether Adani’s firms brought Iranian liquefied petroleum gas (LPG) into India via the Mundra port, which his company operates. Certain tankers regularly traveling between Mundra and the Persian Gulf displayed behaviors typical of ships aiming to circumvent sanctions, the report stated.

Adani Group issued a clarification, saying: “The logistics of LPG trade are managed by well-established third-party international suppliers and logistics firms, which manage shipping in accordance with global compliance standards. The supplies are under valid contracts with the supplier having specific clauses that the product should be from non-sanctioned countries.”

”The shipment referred to in the WSJ’s story was handled through a routine commercial transaction via third-party logistics partners and was supported by documentation identifying Sohar, Oman, as the port of origin. We do not own, operate or track vessels (including the alleged SMS Bros/Neel) and cannot comment on the current or past activity of vessels we have not contracted and do not control.”, the group said in a statement.

Previously, US prosecutors had accused executives from the Adani Group, which has business interests ranging from ports to renewable energy, of involvement in bribery. Authorities claimed that Adani, along with seven other individuals, including his nephew Sagar Adani, agreed to pay approximately $265 million in bribes to Indian officials. This was allegedly done to secure contracts anticipated to generate $2 billion in profits over two decades and to facilitate the construction of India’s largest solar power project.

Additionally, prosecutors alleged that the Adanis, along with a former Adani Green Energy CEO, Vneet Jaain, secured over $3 billion in loans and bonds while concealing the corruption from lenders and investors.

The bribery controversy also sparked concerns over Adani Group’s market and public disclosure practices. Prosecutors accused the company of issuing misleading statements earlier this year regarding its awareness of the US investigation.

Recently, Adani Energy Solutions Ltd., has given the green light to raise ₹4,300 crore ($502 million) through a stake sale. According to an exchange filing, the company’s board approved the plan to secure the funds via Qualified Institutional Placement (QIP) in one or more tranches.

The Adani Group is gradually regaining investor trust after the founder’s US indictment dampened sentiment. In April, the group raised approximately $750 million for an acquisition, with BlackRock Inc. subscribing to nearly a third of the bond offering. Just recently, its ports arm secured $150 million in a bilateral loan from DBS Group Holdings Ltd.

TotalEnergies to Sell India More LNG

French energy major TotalEnergies plans to sell more LNG to India, in particular, from the US and continues to support the expansion of Adani Green, its CEO Patrick Pouyanné said.
“We are the largest US LNG energy exporter total energy, so we can bring more. We have also have a big venture in Mozambique with Indian companies. We will intend to restart very soon to provide energy to India. So that’s also a plan,” Pouyanné said after meeting commerce and industry minister Piyush Goyal in Paris.
Last year, the company announced suspension of additional investments in Adani Group companies amid the US’ bribery allegations against the Indian conglomerate.
“And then on the renewable side, we continue to support the expansion of Adani Green, which has already a 14 gigawatt of capacity. So we will continue to support this growth,” he said, adding that plans of the company are to continue to develop energy business.

TotalEnergies has invested almost $5 billion in India in the last five years especially in natural gas, importing energy, city gas, development of gas infrastructure in India, and renewables.
“We invest a lot in solar and wind in India, with Adani in particular,” he said.
Last year, the company inked long term contracts with GSPC and IOCL to provide LNG to India.
“In fact, India is becoming an important market for LNG, number four in the world in 2024 so developing this gas. So for us, finding customers, long term customers in India is good,” he said.

SOCAR in Oil Exploration Deals with ExxonMobil and BP

The State Oil Company of Azerbaijan Republic (SOCAR) has reportedly signed new agreements with Exxon Mobil and bp for oil and gas exploration in the country.

This collaboration aims to sustain Azerbaijan's oil output, which is projected to remain at approximately 582,000 barrels per day (bpd) or the next five years with the help of Western energy investments.

At the Baku Energy Week conference, the two companies formalized their partnership by signing a memorandum of understanding (MOU), reported Reuters, citing three sources.

ExxonMobil is expected to enhance Azerbaijan's onshore production, which currently represents just 5% of its total oil output.

ExxonMobil vice-president of global exploration John Ardill said: "In the years to come, we will be able to talk about the potential size of the resource and what the economics might look like.”

SOCAR vice-president for geology Arzu Javadova emphasized that the current stage of the agreement is to evaluate project options, with no immediate plans for drilling exploration wells.

ExxonMobil also holds stakes in the Azeri-Chirag-Gunashli oil development project and the Baku-Tbilisi-Ceyhan pipeline, which is a key route for Caspian crude to reach Turkey and European markets.

SOCAR is expected to announce the divestment of stakes in the Karabakh and Ashrafi-Dan Ulduzu-Aypara offshore oil and gas fields to bp.

BP is expected to take over as the operator of the Karabakh project. The move follows bp's expression of interest last year through an MOU with SOCAR.

The fields were previously part of a contract with Equinor, which withdrew in 2017 to concentrate on its core assets.

In addition to oil, Azerbaijan is also focusing on expanding its natural gas exports.

President Ilham Aliyev disclosed at the conference that the country aims to boost its natural gas exports by eight billion cubic meters (bcm) by 2030, building on the 25bcm exported in 2024.

BP also announced a final investment decision on the Shafag solar plant project, a 240MW venture in the Jabrayil district of Azerbaijan.

The project, estimated to cost $200m (£147.95m), is a collaboration between bp's solar unit, Lightsource BP, SOCAR, and the Azerbaijan Business Development Fund, with completion targeted for mid-2027.

"Azerbaijan’s SOCAR inks oil exploration deals with ExxonMobil and BP" was originally created and published by Offshore Technology, a GlobalData owned brand.

Energy Investment Set to Hit $3.3tn in 2025

Global energy investment is set to reach a record $3.3 trillion in 2025, two-thirds of which will be on "clean energy" technologies, double the amount going to fossil fuels, according to a report released by the IEA.

The total marks a 2pc rise "in real terms" compared to 2024, "despite headwinds from elevated geopolitical tensions and economic uncertainty", the agency said.

The IEA forecasts that around $2.2 trillion will go to renewables, nuclear, grids, storage, low-emissions fuels, energy efficiency and electrification in 2025, compared to $1.1 trillion for oil, gas and coal.

The rise in "clean energy" investment reflects "not only efforts to reduce emissions but also the growing influence of industrial policy, energy security concerns and the cost competitiveness of electricity-based solutions", the agency said.

Energy security is "a key driver" of the growth in investment globally, IEA executive director Fatih Birol said. Although the "fast-evolving economic and trade picture means that some investors are adopting a wait-and-see approach to new energy project approvals… in most areas we have yet to see significant implications for existing projects," he added.

Investment trends are being shaped by a "rapid rise in electricity demand", the IEA said. Global spend on the electricity sector is set to hit $1.5 trillion this year, driven mainly by record investment on low-emissions generation, the organization said. It expects solar power alone to attract $450bn this year.

Investment in power grids is "struggling to keep pace with the rise in power demand", although spending is still forecast to surpass a record $400bn this year, it said.

In contrast, investment in fossil fuel supply is expected to fall by around 2pc this year — the first decline since 2020 — owing to a "drop in prices and uncertain investment climate", the IEA said. Upstream oil and gas investment is forecast to fall by approximately 4pc to just under $570bn, led by a 6pc decline in upstream oil spending to roughly $420bn.

"The sharp drop in oil prices, rising operational costs, the impacts of tariffs and concerns about potential oversupply have led many companies to revise their investment plans," the IEA said.

Investment in coal supply is set to grow again in 2025, but more slowly — up by 4pc on the year, compared with an average 6pc annual increase over the past five years, the IEA said. Coal investment is largely driven by China and India.

Spending on "low-emissions fuels" is expected to hit a new record in 2025, but will remain below $30bn, the IEA said. The agency flagged that such projects "are particularly prone to policy uncertainty".

The IEA noted regional disparity across energy spending. China remains the world's largest investor "by a wide margin", it said, adding that the country's share of global clean energy investment has risen from a quarter a decade ago to almost one-third now.

In the US, investment in renewables and lower-emissions fuels is "set to level off as supportive policies are scaled back", the IEA said. It noted that US shale oil producers are particularly challenged by falling oil prices, and that upstream oil and gas spending "is gravitating towards large resource-holders in the Middle East".

Ukraine Launches Russian-Free Gas Route

In a contentiously pivotal move toward energy independence, Ukraine confirmed the launch of natural gas imports via the Trans-Balkan pipeline, bypassing Russian supply in addition, allowing Ukraine to draw gas from European sources, including liquefied natural gas (LNG) imported through Greece and Azerbaijani gas from the Trans Adriatic Pipeline.

The Trans-Balkan pipeline, which historically carried Russian gas southward, has now been reversed to bring non-Russian gas northward into Ukraine. 

A Ukrainian energy ministry source told Reuters that the corridor would enable the import of up to 1 billion cubic meters (bcm) of gas by October, with June volumes expected to reach 100 million cubic meters. 

Ukraine ceased transiting Russian gas to Europe at the end of 2024, choosing not to renew a longstanding agreement with Gazprom. Kyiv has emphasized that no Russian-origin gas will be involved in this newly activated corridor.

The European Commission has endorsed efforts like this under its broader REPowerEU strategy to end the bloc’s dependence on Russian fossil fuels.

Industry reports, including recent coverage from Argus Media and Pipeline & Gas Journal, note that monthly capacity auctions on the Trans-Balkan route have been successfully launched, off the market indications that there is, indeed, commercial interest and operational readiness.

The corridor’s activation is both a geopolitical and infrastructure achievement, reinforcing Ukraine’s energy sovereignty amid war and instability.

Following the cessation of gas transit through Ukraine, Russia has increased its gas exports to Europe via the TurkStream pipeline. In May 2025, Russian pipeline gas exports to Europe rose by 10% compared to April, averaging 46 million cubic meters per day.

The launch of the Trans-Balkan route is the result of coordinated action among five national gas transmission operators—from Greece, Bulgaria, Romania, Moldova, and Ukraine. The route enables natural gas to flow northward from Greece’s Revithoussa LNG terminal through southeastern Europe into Ukraine, completely bypassing Russian supply channels. With an annual capacity of up to 1 billion cubic meters, the corridor is supported by preferential tariffs—25% lower than standard rates, and 46% lower for deliveries into Ukraine. 

According to the Kyiv Post, the joint initiative not only enhances Ukraine’s access to diversified energy sources but also strengthens regional energy security and resilience heading into the 2025–26 winter heating season.

China Q1 Coal Power Approval Hits 11.29 GW

New research from Greenpeace East Asia shows that China approved 11.29 gigawatts (GW) of new coal power capacity in the first quarter of 2025, after 2024 saw a year-on-year decrease in new approvals for coal-fired power plants to 62.24 GW.

​​Greenpeace East Asia Beijing-based climate & energy project manager Gao Yuhe said:“2025 is a critical year for China to make overall emissions from its power sector stop increasing. Since 2024, we have seen a turning point where the wind and solar growth is outpacing coal. If this trend continues, renewables could meet all of China’s new electricity demand in 2025. That puts the power sector on track to peak carbon emissions this year. This presents a historic opportunity. China has every reason to aim for an early emissions peak in the power sector. This is the major precursor towards the goal of a nationwide carbon peak.”

Greenpeace East Asia reviewed official documents, including project approvals, reviews, and environmental impact assessments, to track new coal approvals in China since 2015 and confirm new coal power plant approvals through 2024 and Q1 2025.

With Q1 2025’s additions, total coal capacity approved since 2021 now stands at 289 GW — double the approved 145 GW from 2015 to 2020 (the 13th Five-Year Plan period). However, in a significant shift, 2024 saw a 41.5% year-on-year drop in approvals to 62.24 GW, marking the first annual decline since 2021. Meanwhile, official data show that by Q1 2025, China’s installed wind and solar capacity reached 1,482 GW, surpassing thermal power1 ’s 1,450 GW for the first time. Q1 2025 also saw, for the first time, that wind and solar generation outpace the total increase in national electricity demand—a major milestone in China’s energy transition.

From 2015 to 2020, coal-rich provinces led new approvals. In contrast, the 2021 to Q1 2025 period has seen both eastern and western provinces ramp up approvals. The top five provinces for newly approved capacity from 2021 to Q1 2025 are Guangdong (28.02 GW), Jiangsu (23.84 GW), Inner Mongolia (20.75 GW), Anhui (19.18 GW), and Shaanxi (17.39 GW).

Since 2022, eastern provinces with high electricity demand growth have significantly expanded coal approvals. Since 2024, however, the trend has shifted westward, toward provinces rich in wind and solar resources.

From 2024 through Q1 2025, the top five provinces by new coal approvals are Inner Mongolia (10.64 GW), Gansu (10.02 GW), Xinjiang (5.28 GW), Heilongjiang (4.66 GW), and Jilin (4.66 GW). Large-scale units (600 megawatts (MW) and above) now dominate approvals. In 2024, they made up 69.6% of newly approved capacity; in Q1 2025, the share is 88.9%.

Natural Gas Hub Formation: General Concepts

Afshin Javan

Energy Economist

Development of natural gas trading hubs (gas hubs) has been a major milestone in the evolution of the modern gas market. Their emergence has introduced fundamentally new factors influencing gas prices, significantly increasing the risk of conducting gas business.

These factors have reshaped the balance of risks to the detriment of national producer companies, amplified the influence of external elements unrelated to the gas industry or energy sector, and pushed natural gas prices below their justified levels.

Natural gas trading at hubs is evolving primarily to create a buyer-dominated market, allowing importing countries to dictate terms to exporting nations. This trend largely disregards the international community’s commitment to achieving the Sustainable Development Goals.

The resulting “buyer’s market” primarily benefits the most developed economies, as lower domestic gas prices provide these countries with a competitive economic edge over the rest of the world. Notably, all major gas hubs are located in the United States and Europe—regions characterized by advanced economies, high levels of gasification, and substantial natural gas consumption.

OTC-EM

It is noteworthy that nearly all successful gas hubs have developed over at least a decade. This process involved the gradual introduction of exchange-traded and over-the-counter (OTC) products to electronic marketplaces (EMs).

The high liquidity of trading at established hubs in consuming countries relies on the convergence of three key factors: market liberalization, an excess supply of natural gas, and a competitive environment. This competitive environment is supported by a well-developed gas transportation infrastructure and a surplus of gas suppliers. Together, these factors create a framework where consumers have access to a variety of alternative suppliers. Additionally, all market participants enjoy non-discriminatory access to available physical capacity for the transportation, regasification, and storage of natural gas, except in cases of antitrust enforcement or economic and political sanctions.

The continued development of financial derivative products for hub-based natural gas trading is expected to attract a larger and more diverse group of market participants, including major financial institutions, hedgers, and portfolio investors. As a result, gas hubs are likely to shift away from serving as balancing tools for the gas market to becoming more sophisticated mechanisms in an increasingly financialized gas market.

Hubs, as trading mechanisms, have their strengths and weaknesses. At present, they can hardly be considered reliable contributors to energy security or balanced markets. In practice, trading at hubs is subject to market uncertainties (as is common with trading on exchanges in general) and is often balanced through over-the-counter (OTC) products and long-term contracts (LTCs).

The development of hubs is regarded as a key component in establishing an integrated gas market, driven by the globalization of LNG trade. In many ways, this process mirrors the evolution of the global oil market in the 20th century. Prominent gas hubs such as Henry Hub (HH), Title Transfer Facility (TTF), and the National Balancing Point (NBP) have established widely recognized price benchmarks. These benchmarks serve as pricing references for numerous contracts and influence gas prices across various regions, leading to significant price correlation in recent years.

Discussions surrounding the formation of natural gas hubs frequently appear in articles and statements. Therefore, it is important to briefly clarify the concept of a gas hub.

Natural Gas Hub

I would like to clarify the meaning of a gas hub, as the definition will change the scope of the elements before discussing existing natural gas hubs and their characteristics. Although gas hubs have been a topic under discussion, there is no clear definition that emerges from the various concepts of hubs. The current hub concepts include varied terminologies such as “hubs,” “financial hubs,” “balancing hubs,” “benchmark hubs,” “physical hubs,” “virtual hubs,” “risk management hubs,” and exchanges.

Heather (2015) stated that all European hubs were “balancing” hubs, but only the most mature and successful hubs (i.e., National Balancing Point (NBP) and Title Transfer Facility (TTF)) were “trading” hubs (in addition to being balancing hubs). In contrast, IEA labeled all European hubs as “trading hubs,” regardless of their liquidity and the existence of financial trading. The European Federation of Energy Traders (EFET) seems to agree with the IEA calling all European gas hubs, including the nascent ones, trading hubs.The existing literature on this topic does not provide a clear definition.

Here we define a gas hub in the broad sense of the concept. A “Gas Hub” is a physical or virtual point where buyers and sellers exchange the ownership of gas on paper and in physical delivery.

Hub Functions

Shipment of natural gas from suppliers to customers as per the agreements at their time of maturity and price-setting function for gas, and related financial instruments constitute two basic functions of hubs. Ag gas hubs, standardized exchange, and over-the-counter trading of physical volumes and financial instruments for gas are carried out.

A Gas Hub is not (not required to be) a delivery point (transfer of ownership); natural gas can be traded on a hub with various delivery points (“delivery basis” or “balance point”).

The United States and Canada will continue to have the most advanced natural gas hub trading systems. The linkage of exchange-based and OTC products to the Henry Hub price index serves as a basis for expanding trading in North America and the price benchmark for contracts covering extra-regional natural gas exports.

NBP (National Balancing Point), the established British gas hub, is likely to lose some of its significance in the intra-EU gas trade, even though the UK has a large natural gas and LNG market with developed gas shipment and storage infrastructure. In the long-term horizon, since the UK gas market is the tail segment relative to the rest of Europe, the role of NBP will weaken. This trend may increase and accelerate as a result of Brexit.

TTF (Title Transfer Facility), the Netherlands-based hub serving the North-Western European market, is highly likely to become the leading hub in the EU.  The TTF has the largest trading volumes in EU countries, strong liquidity, and the widest range of traded products among all European hubs. However, a potential gas deficit poses a key risk for this hub. The positive outlook for TTF as a system-forming and reference hub for the EU is not entirely certain, given the accelerated decline in gas production at the Groningen field and the partial expiration of previously signed gas contracts. Nevertheless, if TTF can resolve the dichotomy between “trading experience” and “lack of resources,” it will maintain its crucial role in the EU gas market.

Emerging Centers

Looking ahead, there is a strong possibility that important gas distribution centers will emerge in South-Eastern Europe, a region that currently lacks gas hubs. Romania, Bulgaria, Greece, and Turkey are likely contenders to take on this role. However, significant price benchmarks similar to those in Germany or the Netherlands are unlikely to emerge in this region.

As for gas hubs in Western Europe, such as the Italian PSV, Spanish PVB, and Belgian ZTP, it is noteworthy that they will likely continue to serve as regional and local balancing points for both commodities and financial instruments. Infrastructure limitations on physical gas transfer between neighboring regions, combined with the constant risk of goods shortages (volume risk), will prevent these hubs from evolving into more prominent ones in the medium and long term.

In the long run, there is potential for the development of a major international natural gas hub in the Asia-Pacific region. This hub could, like the EU, build upon a network of existing domestic hubs (in Shanghai, Chongqing, Tokyo Bay, Singapore, and elsewhere) that currently play a secondary role in regional gas trade. However, despite a large number of gas suppliers and certain price benchmarks, these domestic-level hubs face significant challenges in developing into full-fledged international hubs that could rival Europe and North America’s major hubs. Due to these barriers, the exact location of such a hub remains uncertain at this time.

Types ofTrading

 

Theoretically, natural gas hubs can be classified into the following types:

1.Balancing Hubs: These hubs are used by companies to balance their portfolios as they near maturity or delivery, and by transmission system operators (TSOs) to physically balance the gas grid, often daily. In a liberalized gas market, a country must establish at least one “balancing” hub to help the TSO manage the system. A balancing hub can also be a transit hub:that moves a substantial volume of gas but may have limited actual trading activity.

2.Financial Hubs: A financial hub provides futures contracts that allow shippers to optimize their portfolios and manage long-term risks (for speculative purposes, money managers, and/or hedging). These contracts often extend up to three years or more in advance, and can also be used by financial players for speculation. While all trading hubs primarily engage in financial transactions (mainly through futures contracts), only those hubs with a sufficient level of liquidity can be classified as “financial hubs.” Currently, only the US Henry Hub, the Dutch TTF, and the British NBP are considered financial hubs.

3.Benchmark Hubs: A benchmark hub (or price marker hub) sets prices for other gas hubs, making the number of benchmark hubs quite limited. A benchmark hub must have strong liquidity for spot trades as well as for several years forward and should be open, accessible, and transparent to a wide range of participants. It serves as a risk management hub and is thus a financial hub, although not all financial hubs are benchmark hubs.

How to Establish

Establishing a natural gas hub requires the development of infrastructure, regulatory frameworks, and market mechanisms that facilitate efficient gas trading. The process involves several key steps:

Investment inInfrastructure

•Pipeline Network: Create a comprehensive gas pipeline network that connects production sites, storage facilities, and end-users.

•Storage Facilities: Build underground or liquefied natural gas (LNG) storage facilities to accommodate seasonal fluctuations in demand.

•Interconnection: Ensure connections with other regions and countries to facilitate the import and export of natural gas. It is also important to consider the legal framework governing end-users.

Market Design

•Trading Platform: Establish a trading platform (either physical or virtual) where natural gas can be bought and sold. A natural gas hub may not necessarily be physically linked to gas transportation infrastructure and can operate virtually.

•Pricing Mechanisms: Implement transparent pricing mechanisms that reflect supply and demand dynamics.

•Standardized Contracts: Introduce standardized trading contracts to simplify transactions and enhance market efficiency.

Legal and Regulatory Frameworks

•Regulation: Develop and enforce regulations that promote market transparency and ensure fair competition.

•Third-Party Access (TPA): Allow third-party access to pipelines and storage facilities to prevent monopolistic practices.

•Market Liberalization: Encourage market participation by opening it up to multiple players, including private companies.

Preconditions

•Abundant Supply: Ensure a reliable and sufficient supply of natural gas.

•Strong Demand: Cultivate a diverse consumer base, including industrial, residential, and power generation sectors.

•Geographic Advantage: Leverage proximity to gas reserves, production areas, or key transportation routes.

•Political and Economic Stability: Maintain a stable political and economic environment to attract investment and foster market confidence.

•Technological Capability: Invest in advanced infrastructure for transportation, storage, and monitoring of natural gas.

•Regional Cooperation: Establish agreements and partnerships with neighboring countries to facilitate cross-border trading.

By following these steps, stakeholders can effectively create a natural gas hub that enhances market efficiency and promotes energy security.

SWOT Analysis for a Natural Gas Hub

Strengths	Weaknesses
The geographical advantage when located near gas reserves or key transit	High initial investment is required for infrastructure.
Enhances price transparency and market liquidity.	Regulatory and political challenges may delay development.
Boosts energy security and diversifies energy sources for the region.	Potential for market manipulation in the absence of strong regulatory oversight.
Promotes regional integration and cross-border energy trade.	Dependence on a reliable and consistent gas supply.
Attracts a larger number of participants, leading to greater market activity.	Diminished influence of economic fundamentals as more speculative participants enter the market.
Increases trading volumes (predominantly in paper contracts).	Increased entry of speculators with differing market perceptions.
Provides more trading products, improving liquidity.	Vulnerability to economic and political “black swans.”
Opportunities	Threats
Rising global demand for natural gas as a transitional fuel in the energy transition.	Competition from established gas hubs (e.g., TTF, Henry Hub).
Potential to attract foreign investments in gas-related industries.	Geopolitical tensions or supply disruptions could affect market stability.
Supporting the future development of hydrogen and biomethane markets to enable decarbonization.	Long-term risks associated with the energy transition away from fossil fuels.
Development of LNG (liquefied natural gas) infrastructure to expand global reach.	Fluctuations in global gas prices and demand.

Conclusion

Europe holds the greatest potential for further developing gas hubs that can sustainably meet demand in markets with strong purchasing power and abundant gas supply. In the Asia-Pacific region, however, the development of gas hubs will be hindered by the need to address domestic market limitations, which currently prevent existing hubs from evolving into fully integrated international marketplaces. Other regions of the world do not exhibit significant potential for the rapid emergence of established gas hubs in the foreseeable future.

While all trading hubs should serve as balancing hubs, only a few will qualify as financial or benchmark hubs.

For a natural gas hub to succeed, it requires a well-coordinated effort between the public and private sectors, backed by strong policy frameworks and strategic investments. It should also be adaptable to the changing energy landscape.

Strategic Opportunities for Iran-Oman Energy Ties

Shuaib Bahman

Intl. Affairs Analyst

The Middle East, being the heart of world energy, has always been the focus of international attention. The Islamic Republic of Iran and the Sultanate of Oman remain two key players in the energy sector in the Persian Gulf and the Gulf of Oman. While being rich in oil and gas reserves, over recent years Iran and Oman have taken steps to diversify their energy mix away from hydrocarbons and develop renewable energies.

Iran, sitting atop the world’s third-largest oil and second-largest gas reserves in the world, and Oman, a big owner of oil and gas, have ambitious plans for clean energies to create complementary capacities for broader cooperation in the energy sector. Therefore, it would be important to offer a comprehensive analysis of Iranian and Omani energy potential, identifying opportunities for cooperation in the energy sector and studying geopolitical and economic factors that may either facilitate or pose a challenge to cooperation.

Reciprocal Potential

Iran as a leading fossil fuels producer worldwide has a massive capacity in the energy sector. In the meantime, Oman supplies its energy needs mainly relying on local natural gas and oil reserves. Oman has significant proven oil reserves, but it has ambitious plans to enhance the share of renewables in its energy mix. That would be materialized through solar and wind power plants, backed by energy storage and policies like its Sahim initiative for rooftop solar energy.

Iran and Oman have long had cooperation in developing oil and gas fields, petrochemical projects, and gas supply. MoUs signed between them for oil and gas cooperation, bear witness to this fact. A strategic project between Iran and Oman is the planned gas pipeline linking the two countries. The idea is to carry natural gas from southern Iran (Roudan) to Sohar Port in Oman via a subsea pipeline. With an initial capacity of 1,000 mcf/d, this project is part of efforts for broader cooperation in conducting joint technical studies, developing the Hengam oil and gas field in the Strait of Hormuz, and laying the infrastructure for gas export. Oman has also shown its strategic interest in importing natural gas from Iran with a view to diversifying its energy resources and supporting economic development.

Iran and Oman have also shown great interest in cooperating in renewables. Iran and Oman in May signed 18 agreements, one of which pertained specifically to conducting feasibility studies for electronic connection between the two nations. That is indicative of growing interest in joint renewable energy projects and network integration. Iran and Oman follow numerous objectives in renewables. Iran has massive solar and wind capacity while Oman is rich in solar potential with growing renewable capacity. Public and private sectors in both countries have shown great interest in expanding cooperation in clean energy, technology sharing, power plant construction, and infrastructure development. Joint infrastructure projects like transnational power lines and joint investment in renewables and energy storage may help both nations stabilize their own networks and make optimal use of resources.

Vision

Iran and Oman have historically maintained their ties by adopting pragmatism based on good neighborliness and balanced diplomacy, which would be conducive to bilateral energy cooperation. Oman as a regional mediator between Iran and Persian Gulf Arab states has facilitated sustainable and growing political ties, which would set the scene for energy cooperation. High-level meetings and recently signed agreements lay emphasis on deeper economic and energy ties to increase trade exchanges potentially to $20-30 billion.

Despite positive perspectives, such challenges as sanctions on Iran, banking restrictions and regional geopolitical tensions would cause obstacles. Such challenges would further push to bold relief the strategic significance of cooperation for guaranteeing energy security and economic growth in both countries.

Both enjoying massive fossil fuels and pursuing ambitions in the renewable sector, Iran and Oman have significant capacities for energy production. Mechanisms of cooperation between Iran and Oman include ongoing oil and gas projects, the planned Iran-Oman gas pipeline, and joint efforts for integrating renewable energies and connecting their power grids. Backed by historically strong ties and strategic economic interests, such cooperation has placed both nations in a position to deepen their energy cooperation despite regional geopolitical challenges and sanctions-induced restrictions.

Iran-Oman cooperation would bolster energy security in both nations while contributing to regional stability and economic development on a border scale of Middle East energy. Construction of the planned Iran-Oman gas pipeline would bring about economic interests for both, while hinting at stable energy cooperation in the region.

In the meantime, the expansion of energy cooperation between Iran and Oman would serve as a pattern for regional cooperation, let alone help boost energy security, diversify resources and routes of energy, and finally boost stability and bolster the economy. Such cooperation can be conducive to establishing a more integrated energy market at the regional level.

Iran-Afghanistan Potential Energy Cooperation

Shuaib Bahman

Intl. Affairs Analyst

Cooperation in the energy sector between Iran and Afghanistan is strategically and economically significant. It is rooted in a variety of factors including shared borders, complementary energy resources, and common infrastructure needs. Such cooperation is vital not only for regional energy security but also for economic development in both countries. Landlocked Afghanistan with limited energy infrastructure and growing demand heavily depends on energy imports from neighboring nations, particularly Iran. With massive hydrocarbon reserves and remarkable technical capabilities, Iran can be instrumental in supplying Afghanistan’s energy needs. On the other hand, sanctions-stricken Iran is looking for regional markets to export its energy and bolster its geopolitical standing. Afghanistan is a key potential partner in this regard. Therefore, energy cooperation between Iran and Afghanistan may be examined from various technical, economic, political, and institutional standpoints.

Energy Potential

Holding the world’s second-largest proven natural gas reserves and significant oil reserves, Iran is a key energy player at the global level. More than 97% of energy consumption in Iran is filled by natural gas and oil. Power generation in Iran chiefly relies on natural gas while oil, coal, and to a lesser extent renewables have shares in the energy basket.

Iran has an extended network of oil and gas fields, transmission pipelines, power plants, metallurgy plants, and modern industries, all depending on strong energy infrastructure. Iran is also a regional supplier of electricity to Afghanistan, Pakistan, Iraq, and Turkey. Iran’s technical and engineering capabilities are at an advanced level in power plant construction, development of renewable energy projects, and oil and gas exploration. Iranian companies have been involved in modernizing energy infrastructure in Afghanistan, training Afghan staff, and offering technical services in the renovation of power projects there.

Afghanistan has also significant natural gas and oil reserves in the northern basins of the Amu Darya and Afghan-Tajik (about 1.95 billion barrels of crude oil and 16.2 tcf of natural gas). However, due to decrepit infrastructure, insecurity, and limited investment, only about 5% of Afghanistan’s oil and gas demand is supplied domestically.

Iran and Afghanistan have seen their bilateral trade grow in recent years. Iran has been a key supplier of oil, gas, electricity, refined fuel, equipment, and engineering services to Afghanistan. Iran supplies around 21.7% of Afghanistan’s electricity needs and agreements have been made to renew energy supply contracts by taking into account lower tariffs and increased reliability.

Afghanistan’s unlimited access to the Chabahar Port in Iran is a fundamental factor facilitating higher energy imports and exports, integration into regional supply chains, and increased economic resilience. The establishment of the Iran-Afghanistan Chamber of Commerce and the development of free economic zones indicate mutual interest in encouraging cross-border business, industrial projects, and energy trading.

Iran has constantly shown an inclination to follow up on joint investment plans with Afghanistan in energy infrastructure, oil and gas field development, mining, and renewable energies. Iranian officials have proposed the transfer of technology and training human resources, particularly in oil exploration and production, network development, and renewables, which is vital for capacity-building in Afghanistan. Recent agreements include a 200MW solar power plant in Logar by an Iranian company as well as maintenance of power lines in that country.

Opportunities

Afghanistan’s energy policies highlight increasing imports in the short term and developing domestic resources with international support, and Iran sees Afghanistan as a strategic market and transit partner that complements its policies as a regional export hub. Regional organizations such as the Economic Cooperation Organization (ECO), the South Asia Regional Initiative for Energy Cooperation (SARI/Energy), and trilateral councils, with Tajikistan’s participation, promote infrastructure integration and trade. It is noteworthy that the United Nations has recognized Iran’s pivotal role in rebuilding Afghanistan’s energy systems and has expressed its readiness to facilitate further participation. Accordingly, the two countries have the potential for cooperation in several areas:

1. Cross-border electricity and gas supplies: Increasing electricity exports from Iran to Afghanistan, integrating networks for greater reliability, and extending contracts with favorable terms and tariffs. New infrastructure such as high-capacity transmission lines and substations can increase energy flows and reduce losses.

2. Joint development of hydrocarbon resources: Afghanistan’s oil and gas sector, particularly in the northern basins, offers joint investment opportunities leveraging Iran’s expertise in field development, refining, and transportation.

3. Joint development of renewable energy: The high solar and wind energy potential along the Iran-Afghanistan border paves the way for joint projects, including the previously planned wind farms. Technology transfer and investment from Iran could help Afghanistan exploit its rich renewable resources.

4. Industrial zones and local manufacturing: The establishment of joint free trade and industrial zones could facilitate local production of energy sector equipment (such as solar panels, and transformers), create job opportunities, and expand economic linkages.

5. Capacity building and human resources: Iran could train Afghan engineers, managers, and technicians, and joint research and knowledge-sharing programs could help address Afghanistan’s technical gaps in grid management, renewable energy, and hydrocarbons.

6. Regional integration and transit corridor synergies: Afghanistan’s geographical location allows it to act as a bridge between energy surplus regions (Iran, Central Asia) and deficit regions (Pakistan, India). Cooperation on pipeline, road, and railway projects (such as the Khaf-Herat railway) will enhance transit capacity and economic benefits for both countries.

Cooperation Outlook

Iran and Afghanistan have highly complementary capacities in the energy sector, supported by immediate economic, technical, and political opportunities to deepen cooperation. Iran’s surplus resources, industrial expertise, and willingness to invest in joint ventures align with Afghanistan’s urgent development needs, renewable energy potential, and strategic location as a transit corridor. Although challenges remain, including regional security, regulatory alignment, and infrastructure modernization, sustained engagement, structured investment programs, and regional coordination can bring significant benefits and enhance energy security, economic resilience, and political stability for both nations and the broader region.

Afghanistan’s vast solar and wind energy potential, especially in border areas with Iran, presents an exceptional opportunity for joint investment, technology transfer, and sustainable development. This would not only help reduce Afghanistan’s dependence on fossil fuel imports but also would align with global trends toward clean energy transition.

Investing in modernizing and expanding Afghanistan’s electricity grid and connecting it to Iran’s grid, along with developing gas pipelines, is critical to enhancing the sustainability and efficiency of energy supply. This could transform Afghanistan into an energy transit hub in the region.

In addition, the full activation of Chabahar Port’s capacities and the completion of infrastructure projects such as the Khaf-Herat railway can facilitate trade in energy and other goods and bring broad economic benefits to both countries and the region. At the same time, the long-term sustainability of cooperation requires the empowerment of specialized human resources in Afghanistan. Joint training programs, exchange of professors and students, and transfer of technical know-how in the areas of energy management, operation of power plants, and development of new technologies should be on the agenda.

Ultimately, strong political will, strategic planning, and continued follow-up on agreements by both countries will be the key to realizing the full potential of Iran-Afghanistan energy cooperation and transforming it into a factor of stability and prosperity in the region.