عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Iran’s Energy Sector: A Long History of Sanctions and Instability

Abadan oil refinery facility in southwestern Iran (Reuters)
Abadan oil refinery facility in southwestern Iran (Reuters)
TT
TT

Iran’s Energy Sector: A Long History of Sanctions and Instability

Abadan oil refinery facility in southwestern Iran (Reuters)
Abadan oil refinery facility in southwestern Iran (Reuters)

Israel launched airstrikes on Iran Friday, targeting nuclear facilities, ballistic missile factories, and senior military commanders. The operation, which Israeli officials warned could be “prolonged,” is intended to prevent Tehran from developing nuclear weapons.

Iran’s National Oil Refining and Distribution Company confirmed that its oil refining and storage facilities were not damaged in the attacks. Similarly, the Abadan Oil Refining Company announced it was operating at full capacity with no service disruptions.

Iran is the third-largest oil producer in OPEC, pumping approximately 3.3 million barrels per day, about 3% of global output.

Sanctions and OPEC Role

Iran’s oil production peaked in the 1970s, reaching a record 6 million barrels per day in 1974, more than 10% of global supply at the time, according to OPEC data.

The first US sanctions were imposed on Tehran in 1979, and Iran has since remained under recurring waves of American and European restrictions. In 2018, President Donald Trump withdrew from the nuclear deal and reimposed strict sanctions, sending Iran’s oil exports plummeting—sometimes to near zero.

Under President Joe Biden, however, exports began to climb again. Analysts say enforcement has been less aggressive, and Iran has increasingly succeeded in evading restrictions. It’s also important to note that Iran is exempt from OPEC’s production quotas.

In recent months, Iranian oil exports have surged to around 1.8 million barrels per day—the highest since 2018, fueled by strong demand from China. Beijing does not recognize unilateral sanctions against its trade partners. Private Chinese refineries remain the main buyers of Iranian crude, despite some being targeted by recent US Treasury sanctions. So far, these measures have had limited impact on the flow of Iranian oil to China.

Iran continues to skirt sanctions using tactics like ship-to-ship transfers and by concealing tanker locations.

Production and Infrastructure

Energy consultancy FGE reports that Iran refines around 2.6 million barrels per day of crude and condensates, while exporting an equivalent amount that includes crude, condensates, and refined products. Iran also produces 34 billion cubic feet of natural gas daily - about 7% of global production - all of which is consumed domestically.

Most of Iran’s oil and gas infrastructure is concentrated in the southwest: oil fields in Khuzestan, gas in Bushehr, and condensates from the massive South Pars field. About 90% of crude exports pass through Kharg Island.

While OPEC members theoretically have the capacity to offset a drop in Iranian supply, many are already operating near their limits, placing pressure on the group’s spare production capacity.

Most Viewed

 
 
Business

Lebanon’s Deepening Cost-of-Living Crisis Raises Fears of Unrest

A woman carries grocery bags in Beirut amid continued price increases (Reuters)
A woman carries grocery bags in Beirut amid continued price increases (Reuters)
TT
TT

Lebanon’s Deepening Cost-of-Living Crisis Raises Fears of Unrest

A woman carries grocery bags in Beirut amid continued price increases (Reuters)
A woman carries grocery bags in Beirut amid continued price increases (Reuters)

Lebanon’s worsening cost-of-living crisis and widening poverty are threatening to erase the country’s fragile economic recovery, raising fears of social unrest as inflation accelerates and the fallout from successive wars deepens.

Two major rounds of fighting over the past two years have wiped out much of the progress made in restoring economic growth, undermining efforts by the country’s political leadership and government to overcome the financial collapse and revive support from regional and international partners.

Food inflation has reached an average of 20% this year, with monthly increases of around 2%, while a recent World Bank report on Lebanon’s poverty outlook highlighted a sharp deterioration in food security.

The number of people facing crisis or emergency levels of food insecurity rose to approximately 1.24 million in 2026, up from 874,000 in 2025, with South Lebanon and Nabatieh among the hardest-hit regions.

Business and labor union sources warned that worsening living conditions could spark a wave of protests, confronting the government with challenges extending beyond its ongoing disputes with public sector employees and retirees.

Low incomes and soaring prices have already prompted intermittent strikes, partially disrupting ministries and public institutions and affecting Treasury revenues from vital services.

According to employer and labor representatives, more than a quarter of Lebanon’s residents now face severe poverty or acute economic hardship.

Based on the World Bank’s figures and an average household size of five, this represents roughly 250,000 families.

The sources estimated that broader financial hardship affects nearly 80% of residents, as cumulative price increases have pushed the inflation index close to 9,000 percentage points, largely reflecting successive surges since the financial and monetary crisis erupted in 2019.

The World Bank highlighted the deterioration in household living conditions following the escalation of hostilities in spring 2026.

Displaced families have become increasingly dependent on informal support networks and dwindling financial resources after losing income and productive assets.

Meanwhile, reduced electricity generation at Lebanon’s fuel-powered state plants has forced households to shoulder steep increases in private generator subscription fees, further eroding purchasing power. The crisis is compounded by the government’s strained finances and concerns over a further decline in Treasury revenues.

Lebanon’s financial collapse has left an estimated loss gap exceeding $70 billion, while successive rounds of fighting since autumn 2023 have caused more than $27 billion in direct and indirect economic and reconstruction-related losses, according to official estimates.

The World Bank forecasts a 6.4% contraction in gross domestic product in 2026, reversing the fragile 4.2% recovery recorded the previous year. Annual inflation rose to 17.3% in the first half of 2026, compared with 14.6% in 2025.

Despite conflict-related pressures, the World Bank reported that Lebanon’s public finances maintained a surplus of $1 billion, equivalent to 2.5% of GDP, through the end of May.

The surplus represented a 32% year-on-year increase, supported by a 26.6% rise in government revenues, particularly receipts from fuel excise taxes.

Public spending climbed 23.7%, driven by higher public sector salaries, capital expenditure, hospitalization costs and conflict-related Treasury advances.

Meanwhile, prices for water, electricity, gas and other fuels rose 25.3% year-on-year, while transportation costs increased 29.5% by midyear.

On the monetary front, the World Bank linked the Lebanese pound’s stable exchange rate against the US dollar to tight liquidity in local currency.

However, foreign currency reserves at Banque du Liban fell to $11.6 billion in mid-August, enough to cover approximately 6.6 months of imports, compared with $12.1 billion in mid-February.

The decline reflected the central bank’s need to draw on its reserves to meet foreign currency obligations amid reduced dollar availability in the market.

Lebanon’s trade deficit widened 8.8% year-on-year to $10.2 billion by the end of July, as exports fell 16.6% and imports rose 4.2%.

The report attributed the deterioration to conflict-related disruptions affecting exports, alongside higher oil prices and insurance premiums.

Energy imports rose 9% in value to approximately $3 billion during the first seven months of the year, despite a 31% decline in imported volumes.

The imbalance placed additional pressure on Lebanon’s current account, further straining foreign currency inflows and reserves.

Business

IMF: Saudi Attacks Could Have Negative Spillover 'Everywhere'

IMF Managing Director Kristalina Georgieva gestures during the Managing Director briefing on the Global Policy Agenda during the 2026 IMF-World Bank Group Annual Meetings at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 14, 2026. (Photo by ANTHONY WALLACE / AFP)
IMF Managing Director Kristalina Georgieva gestures during the Managing Director briefing on the Global Policy Agenda during the 2026 IMF-World Bank Group Annual Meetings at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 14, 2026. (Photo by ANTHONY WALLACE / AFP)
TT
TT

IMF: Saudi Attacks Could Have Negative Spillover 'Everywhere'

IMF Managing Director Kristalina Georgieva gestures during the Managing Director briefing on the Global Policy Agenda during the 2026 IMF-World Bank Group Annual Meetings at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 14, 2026. (Photo by ANTHONY WALLACE / AFP)
IMF Managing Director Kristalina Georgieva gestures during the Managing Director briefing on the Global Policy Agenda during the 2026 IMF-World Bank Group Annual Meetings at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 14, 2026. (Photo by ANTHONY WALLACE / AFP)

International Monetary Fund head Kristalina Georgieva said Wednesday that recent attacks on Saudi Arabia could impact people "everywhere” as "the Saudi economy is important for the region and the world."

Given the Saudi economy’s importance, “these developments have potentially negative spillovers for everybody, everywhere," IMF managing director Georgieva said at a news conference during the Annual Meetings of the Fund and World Bank in Bangkok.

The warning comes at a time when energy flows and shipping activity in the region are under pressure, with supply disruptions potentially affecting energy and trade costs as well as economic activity, particularly in economies dependent on oil and gas imports.

The IMF’s forecasts, released on Tuesday, highlight the scale of the expected impact of the disruptions on the region’s economies. The IMF expects the economies of the Middle East and Central Asia to contract by 0.3 percent in 2026, followed by growth of 6.3 percent in 2027, a trajectory that reflects the pressures of the current crisis as well as the anticipated recovery as the disruptions ease and energy and trade flows are restored.

The expected repercussions vary across regional economies depending on their exposure to shipping disruptions and their ability to maintain exports. In its outlook for Saudi Arabia, the IMF raised its 2027 growth forecast to 7.9 percent, from 2.4 percent in July and 3.4 percent in April.

Meanwhile, it lowered its estimate for the economy’s contraction in 2026 to 3.3 percent, compared with 5 percent in its July update and 6.4 percent in April.

This trajectory reflects expectations that production and exports will regain momentum as shipping disruptions subside, although the speed and scale of the recovery will remain tied to developments in the security situation and the normalization of energy and trade flows.

The Saudi Ministry of Finance has projected stronger growth of 12.8 percent in 2027, according to the pre-budget statement.

Business

Taiwan Says Will Invest Up to US$4.4 bn in Alaska Gas Project

A snipers team provides security as US President Donald Trump boards Air Force One at Elmendorf Air Force Base in Anchorage, Alaska, on October 13, 2026. (Photo by Kent NISHIMURA / AFP)
A snipers team provides security as US President Donald Trump boards Air Force One at Elmendorf Air Force Base in Anchorage, Alaska, on October 13, 2026. (Photo by Kent NISHIMURA / AFP)
TT
TT

Taiwan Says Will Invest Up to US$4.4 bn in Alaska Gas Project

A snipers team provides security as US President Donald Trump boards Air Force One at Elmendorf Air Force Base in Anchorage, Alaska, on October 13, 2026. (Photo by Kent NISHIMURA / AFP)
A snipers team provides security as US President Donald Trump boards Air Force One at Elmendorf Air Force Base in Anchorage, Alaska, on October 13, 2026. (Photo by Kent NISHIMURA / AFP)

Taiwan said Wednesday it will inject up to US$4.4 billion in the Alaska LNG project, after US President Donald Trump announced the island's investment in the to-be-built natural gas pipeline.

Taiwan imports nearly all of its energy supply and has sought to shore up Washington's support as China presses its claims of sovereignty over the island democracy.

"According to current plans, the cooperation will include the annual procurement of six million metric tons of Alaska LNG following production," the Ministry of Economic Affairs said in a statement.

It will also involve "participation in project development, with an estimated investment of up to US$4.4 billion," AFP quoted the ministry as saying.

"If the project progresses smoothly according to the planned timeline, it is expected to begin further supplementing domestic natural gas supplies as early as 2032," it added.

The statement came hours after Trump told a rally in Wasilla, Alaska, that Taiwan had agreed to buy 30 percent of the output from the pipeline over the next 20 year and also invest US$4.4 billion into the project.

Taiwan sources its LNG from multiple countries but the mix has changed dramatically this year after the start of the Middle East war when Iran claimed control of the Strait of Hormuz.