Sanctions and mismanagement have finally caught up to Iran

Iran is experiencing an energy crisis. But this isn't something new. It's the culmination of long-term trends that have finally gotten out of hand:

These numbers are approximate, but it hardly matters. Over the years Iran has encouraged massive and wasteful household consumption of natural gas, while sanctions and mismanagement have prevented production from catching up. And Iran's production woes were recently made worse when Israel bombed a couple of their pipelines.

Iran makes up for this by importing gas from Turkmenistan and, more recently, Russia, and by using fuel oil in place of gas. Unfortunately, the fuel oil tradeoff has become more difficult. Iran needs to re-inject gas into its aging oil fields to keep up production, and when they cut back on re-injection to preserve gas supplies they end up with less fuel oil. It's Catch-22.

This juggling act has long produced regular shortages, especially in winter, but it's finally caught up with them and Iran now has a massive year-round shortfall of gas compared to consumption. This forced a choice: cut back gas to households or cut back gas to electric power plants. They chose to keep households happy and instead shut down electric generation, so they now have rolling blackouts throughout the country.

There's no short-term answer for this. Iran's gas infrastructure needs massive investment, which will take years at minimum. Nor can Iran easily produce more fuel oil to substitute for gas. Nor, thanks to sanctions, can they afford to import more gas. At this point, there's little they can do aside from risking revolt by limiting gas supplies to households. Or they can pray for a mild winter.