U.S. Energy Information Administration - EIA - Independent Statistics and Analysis
Country Analysis Brief Overview
- Iran holds the world's fourth-largest proved crude oil reserves and the world's second-largest natural gas reserves. Despite the country's abundant reserves, Iran's oil production has substantially declined over the past few years, and natural gas production growth has slowed. International sanctions have profoundly affected Iran's energy sector. Sanctions have prompted a number of cancellations or delays of upstream projects, resulting in declining oil production capacity.
- The state-owned National Iranian Oil Company (NIOC) is responsible for all upstream oil and natural gas projects. The Iranian constitution prohibits foreign or private ownership of natural resources. However, international oil companies (IOC) can participate in the exploration and development phases through buyback contracts.
- Iran is planning to change the oil contract model to allow IOCs to participate in all phases of an upstream project, including production. However, international sanctions continue to affect foreign investment in Iran's energy sector, limiting the technology and expertise needed to expand the capacity at oil and natural gas fields and reverse production declines.
- Iran holds nearly 10% of the world's crude oil reserves and 13% of OPEC reserves. About 70% of Iran's crude oil reserves are located onshore, with the remainder mostly located offshore in the Persian Gulf. Iran also holds proved reserves in the Caspian Sea, although exploration has been at a standstill.
- Iran's crude oil production fell dramatically in 2012, following the implementation of sanctions in late-2011 and mid-2012. Iran dropped from being the second-largest crude oil producer in OPEC to the fourth in 2013, after Saudi Arabia, Iraq, and narrowly behind the United Arab Emirates (UAE). Iran's production increased in 2014, increasing Iran's rank to the third-largest crude oil producer in OPEC during the first half of 2014.
- Iran's exports of crude oil and condensate dropped from 2.5 million bbl/d in 2011 to 1.1 million bbl/d in 2013 because the United States and the European Union tightened sanctions that targeted Iran's oil exports. The largest buyers of Iranian crude and condensate are China, India, Japan, South Korea, and Turkey.
- Iran is the second-largest oil-consuming country in the Middle East, second to Saudi Arabia. Over the past few years, Iran has expanded its domestic refining capacity to meet growing domestic demand, particularly for gasoline. Almost all of Iran's domestic oil consumption was of locally produced products.
- Iran is the second-largest proved natural gas reserve holder in the world, behind Russia. Iran holds 17% of the world's proved natural gas reserves and more than one-third of OPEC's reserves. Iran's largest natural gas field, South Pars, is estimated to hold roughly 40% of Iran's gas reserves. However, the vast majority of Iran's gas reserves are undeveloped.
- Although finding new natural gas reserves is not a high priority because much of Iran's current reserves are undeveloped, there have been significant gas discoveries in recent years.
- Iran is the world's third-largest dry natural gas producer, after the United States and Russia, and accounted for nearly 5% of the world's dry natural gas production in 2012. Despite repeated delays in field development and the effects of sanctions, Iran's natural gas production is expected to increase in the coming years. In 2012, almost 40% of Iran's gross natural gas production came from the South Pars field.
- Natural gas production from South Pars is critical to meet increasing domestic consumption and Iran's current and to meet future export obligations.
- Iran trades marginal amounts of natural gas regionally via pipelines. In 2012, more than 90% of Iran's imports came from Turkmenistan and roughly 90% of Iran's exports went to Turkey. Iran does not have the infrastructure in place to export or import liquefied natural gas (LNG).
- Iran's increasing domestic demand for electricity has created supply shortfalls during times of peak energy demand. Iran recently increased electricity prices, which is a component of its energy subsidy reform, in hopes to limit demand growth. Natural gas is the country's primary fuel source to generate electricity, accounting for almost 70% of total generation in 2012.
Analysis Last Updated: July 22, 2014
Overview data for Iran+ EXPAND ALL
-- = Not applicable; NA = Not available; E = Estimate value
Sources: EIA. For more detailed data, see International Energy Statistics.
Data last updated: May 30, 2013
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