Nowadays, due to shortages of gasoline, natural gas, and electricity, Iran is grappling with many serious energy crises. All of these deficits make the nation more vulnerable to external pressure. The President of Iran, Masoud Pezeshkian, warned that the country is facing many complexities and is unable to pay pensions. Iran is also suffering from job shortage problems. His warnings come to light as the United States announced adopting strict measures on Iran’s oil exports, though Iran has found a way to prevent sanctions. 

For many years, Iran has not managed its energy demand efficiently. Poor energy management leads to an energy crisis. Many problems in the nation are common, such as power outages, fuel shortages, and a lack of heating gas. Furthermore, Iran’s fuel imports have grown to fulfill domestic demands. It raises from $2 billion last year to $4 billion or more in 2024/25. This increasing dependency creates an opportunity for action. The United States could encourage fuel exporters to sell to other countries instead, increasing pressure on Iran and worsening its economic struggles.

The shortages have become worse due to Iran’s energy policies. Back in 2019, when gasoline prices hiked. These increased prices have led to unrest and a violent government crackdown. To bring in and maintain prices, the regime kept gasoline prices very low. However, on one side these measures reduced prices but, at the same time, increased the demand and encouraged fuel smuggling to neighboring nations. This includes Iraq and Turkey, where rates of smuggling are very high. 

Despite restrictions on refueling, shortages persist, and costly imports of high-octane gasoline have been authorized.

Furthermore, natural gas management also contains many flaws. About 70% of Iran’s energy is used by gas accounts, but the government is still unable to improve storage. Additionally, conservation is discouraged due to cheap domestic prices. This results in recorded consumption and a predicted winter shortage of 260 million cubic meters daily.

All of these issues grow towards power generation. In the power sector, plants struggle to cope. Iran’s mismanaging energy techniques weaken its influence as well as harm its economy. Furthermore, Iran’s gas exports to Iraq are affected by it. 

Iran is experiencing a severe energy crisis as a result of a 20,000-megawatt power supply deficit. This is brought on by outdated transmission lines, obsolete power plants, and a shortage of electricity generation. Power plants are barely using 75% of their capacity, according to a study by Iran’s National Supreme Energy Council. 20% of electricity is also lost in the transmission process. Since June 2023, the government has ceased publishing monthly power data, presumably to steer clear of criticism. 

Electricity shortages are now a year-round issue when formerly they only occurred during the winter. Major cities have experienced outages as a result. Deputy Speaker Pezeshkian clarified on November 20 that the administration is modifying power reserves in order to prevent problems in the future. However, the Abadan Refinery sold fuel for power plants rather than storing diesel for the winter, according to former oil CEO Abbas Kazemi. There are many complaints over the outages, and there are worries about societal unrest akin to previous riots. 

Iran is susceptible to pressure through sanctions because of its reliance on imported oil products, especially gasoline. Under the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA), the United States successfully employed this tactic after 2010 against businesses that supplied Iran’s oil imports with services including shipping and insurance. In response, Iran produced poor-quality gasoline, which infuriated the population. 

Iran currently has to import 15 million liters of gasoline per day because domestic demand exceeds supply, despite attempts to expand refinery capacity. Iran will need to purchase $25 billion worth of gasoline a year over the next ten years, which is half of its oil export potential. 

Given Iran’s nuclear provocations, the Trump administration may decide to extend these sanctions with the help of European nations. Since Iran’s refineries depend on foreign supplies, mostly from the United Arab Emirates and South Asia, enforcing sanctions on gasoline is simpler than targeting oil exports. Companies operating in these areas might be pressured to put further pressure on the Iranian government.