Iran has discovered more than 7.5 trillion cubic feet (tcf) of natural gas in the southern province of Fars, Oil Minister Mohsen Paknejad claimed on state television, Bloomberg reported.
The announcement comes after months of conflict involving the US and Israel, which has severely affected Iran’s energy infrastructure.
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Of the estimated reserves, Paknejad said that around 5.7tcf of gas is thought to be recoverable.
The minister compared the potential output to 15 years’ worth of production from one phase of the South Pars field, which is jointly operated by Iran and Qatar and recognised as the world’s largest gas field.
The discovery also includes quantities of gas condensates, which Paknejad valued in the “tens of billions of dollars”.
Despite the find, Paknejad acknowledged that bringing the new field into production would likely take several years.
Iran’s energy sector continues to grapple with long-standing issues including international sanctions, delays in investment and repeated power outages.
Recent attacks since late February, attributed to joint US-Israeli action, have further damaged facilities and reduced Iran’s daily gas production capacity by roughly a quarter, including critical impacts on South Pars.
Efforts to repair infrastructure have restored part of this lost capacity, but officials have cautioned that gas shortages may persist into the coming winter.
The government has urged citizens to reduce consumption in anticipation.
Iran’s new gas reserves are described as “sweet” gas containing low levels of hydrogen sulphide, a feature Paknejad said should lower operational costs.
Meanwhile, plans by the US to implement further sanctions on Iran’s energy sector have heightened uncertainty.
The US Treasury is expected to provide additional details on forthcoming measures and has threatened to impose “the toughest sanctions in history” on Iran.
In the oil market, prices declined by more than $1 a barrel (bbl) on Monday 24 August, with traders selling off positions before an expected announcement from Washington regarding additional sanctions on Iran, reported Reuters.
By 06:49 GMT, Brent crude futures had decreased by $1.49, or 1.6%, to $92.90/bbl.
Meanwhile, US West Texas Intermediate dropped by $1.74, or 2%, to $85.32/bbl.
Despite these losses, both benchmarks recorded gains of more than 5% in the previous week, marking their second straight weekly rise.
The increase came as negotiations between the US and Iran stalled, further limiting oil flows through the Strait of Hormuz, a key route that previously handled around 20% of global oil shipments. Tehran has permitted some Iraqi tankers to transit the Strait of Hormuz after requests from Baghdad, but vessel traffic through the strategic waterway remains low.
Iran has seen its crude oil shipments to China fall, according to trade sources, as sanctions disrupt exports.
A recent report by Rory Green for GlobalData TS Lombard says China has significantly reduced oil imports with little impact on domestic economic activity. Imports have fallen to their lowest level in a decade, driven by widespread electrification, sizeable state reserves, large commercial stocks of refined products and some demand destruction.
Green, in his report, also highlights Beijing’s response. Unlike in previous geo-economic shocks, leaders did not encourage stockpiling, suggesting they believe electrification and existing reserves will cushion the economy and that any supply disruption would be short-lived.
