Iran

Oil and Natural Gas Production and Consumption

Iran has the third-largest oil reserves (10 percent of the world's proven oil reserves) and the second-largest natural gas reserves (15 percent of the world's reserves) in the world, and the country is the fourth-largest oil exporter. Output has been constrained by the country's inefficient technology; the 21st-century average output is only two-thirds the peak of six million barrels per day, which was reached in 1974, and the drilling of exploratory wells has slowed considerably. Like much of the Middle East, a dilemma in 21st-century Iran has been the combination of plentiful petroleum resources, yet vast inefficiencies and steadily rising demand in domestic energy usage. Iran's per capita energy consumption is 15 times that of Japan and 10 times that of the European Union. Even relative to the rest of the Middle East, the country's energy intensity (units of energy used per unit of the gross domestic product) is two and a half times that of the regional average. In gasoline consumption, Iran ranks behind only the United States in per-vehicle consumption. The subsidies that have kept prices low have encouraged wasteful consumption, and an illegal sub-industry has developed to smuggle cheap, subsidized gasoline from Iran into Iraq, Pakistan, Afghanistan, and Turkey, where local prices are high enough to make smuggling profitable.

Oil and natural gas combined account for about half of the country's energy consumption. Coal power plants continue to be an important contributor and have recently been streamlined for greater production. To help meet its energy demands, the country has been building new hydroelectric power plants since 2004, along with its first wind-powered and geothermal plants. The first solar thermal plant came online in 2009. There have also been tentative experiments with generating electricity from waste and sewage as well as assessing Iran's tidal power potential, which is believed to be considerable on the Persian Gulf coastline.

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