Israel strikes Iran's gas fields: Why is South Pars indispensable for Tehran?
Tel Aviv and Tehran's military conflict escalated on Saturday as the Israeli army struck the world's biggest gas field in Iran, threatening the latter's energy security, which is highly dependent on the domestic oil and gas production sector.
Iran's South Pars gas field, which it shares with Qatar, was on fire after Israel's precision strikes. The fire was extinguished. However, the attack shows that Israel will go for Iran's economic backbone if the conflict escalates further.
The South Pars field is located offshore in Iran's southern Bushehr province.
Iran is the world's third-largest gas producer after the US and Russia. It produces around 275 billion cubic meters (bcm) of gas per year, or some 6.5% of global gas output. However, because of the US sanctions on exports, it is forced to consume the fuel domestically. It shares the field with Qatar, which produces 77 million tonnes of liquefied gas; it supplies the gas to several nations in Europe and Asia.
The attack can potentially disturb the global oil pricing. The attack heightens the risk to oil infrastructure in Iran, OPEC's third-biggest producer, and to shipments from elsewhere in the region.
South Pars provides roughly two-thirds of the country's supplies.
'It's going to be pretty significant,' Richard Bronze, head of geopolitics at consultant Energy Aspects Ltd., said of Saturday's attacks. 'We appear to be in an escalatory cycle,' and there will be 'questions about whether Israel is going to target more Iranian energy infrastructure,' he added.
Iran has been facing an energy crisis for a long time, with some areas facing the worst power outages in decades. The Iran Chamber of Commerce, Industries, Mines and Agriculture estimated that these blackouts cost the cippled economy about $250 million a day.
'This is a significant escalation,' said Jorge Leon, an analyst at Rystad Energy A/S who previously worked at the OPEC secretariat, said of the onslaught on Saturday.'This is probably the most important attack on oil and gas infrastructure since Abqaiq,' Leon said, referring to the 2019 strike that briefly crippled one of Saudi Arabia's key oil-processing plants.
Also read: Iran Israel war news live updates: 'We can easily get a deal done, end this bloody conflict' says Trump amid strikes
In the 1970s, Iran's oil production was at its peak, with the nation accounting for 10 per cent of the world's output at the time. However, after the 1979 revolution, the US crippled the Iranian economy by announcing sweeping sanctions on Tehran.
The United States tightened sanctions in 2018 after Trump exited a nuclear accord during his first presidential term. Iran's oil exports fell to nearly zero for some months.
China is the biggest importer of Iranian oil. It says it does not recognise sanctions against its trade partners. The main buyers of Iranian oil are Chinese private refiners, some of whom have recently been placed in the US Treasury sanctions list.
If Israel attacks Iran's oil and gas production, it may also impact China, the United States' biggest strategic and economic rival.
Analysts, however, say Saudi Arabia and other OPEC members could compensate for the drop of Iranian supply by using their spare capacity to pump more.
With inputs from Bloomberg, Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hindustan Times
31 minutes ago
- Hindustan Times
Donald Trump hints at Israel-Iran ceasefire, warns Iran has ‘maximum' two weeks
President Donald Trump on Friday indicated he may support a ceasefire in the ongoing aerial conflict between Israel and Iran, now in its second week, but said it would depend on how events unfold. US President Donald Trump expressed doubt over Europe's ability to mediate the ongoing Israel Iran conflict.(Bloomberg) Asked by reporters if he would back a truce while diplomatic talks continue, Trump replied, "I might, depending on the circumstances." He also warned that Iran has a limited timeframe to avoid possible U.S. military action. "I'm giving them a period of time, and I would say two weeks would be the maximum," Trump said, hinting that a decision could come sooner. Trump expressed doubt over Europe's ability to mediate the conflict. "Iran doesn't want to speak to Europe. They want to speak to us. Europe is not going to be able to help in this one," he said. On the same day, Iran's foreign minister held talks with British, French, German, and EU counterparts in Geneva to discuss restarting diplomatic efforts on its nuclear program. European leaders urged Tehran to engage directly with Washington, but the discussions ended without a breakthrough. When asked whether U.S. ground troops would be required if conflict escalates, Trump said, "Well, I'm not going to talk about ground forces, because the last thing you want to do is ground forces." The Israel-Iran air war began on June 13, when Israel launched strikes on Iranian territory, claiming the goal was to stop Iran from advancing its nuclear weapons capability. Israel, which is widely believed to possess nuclear weapons, is not a signatory to the Nuclear Non-Proliferation Treaty (NPT). Iran, which insists its nuclear program is for peaceful purposes, is a member of the NPT and responded with retaliatory strikes. According to the Human Rights Activists News Agency, Israel's attacks have killed 639 people in Iran. Meanwhile, Israel has reported 24 civilian deaths from Iranian strikes. Trump and the White House have said a decision on US involvement in the conflict will be made within two weeks. So far, Trump's stance has ranged from promoting a diplomatic resolution to signalling potential military support for Israel, leaving global observers uncertain about the US course of action. Europe joins Tehran talks as two-week clock ticks President Donald Trump on Friday dismissed the prospects of European diplomacy resolving the Israel-Iran conflict, reiterating that Iran is uninterested in engaging with European leaders. "Iran doesn't want to speak to Europe. They want to speak to us. Europe is not going to be able to help in this," Trump said upon arriving in Morristown, New Jersey. He also played down the possibility of urging Israel to pause its military actions, responding to Iran's demand that Israel cease its strikes before Tehran resumes dialogue with Washington. When asked if he would press Israel to halt attacks, Trump said it was "very hard to make that request right now," adding, "If somebody's winning, it's a little bit harder to do than if somebody's losing, but we're ready, willing and able, and we've been speaking to Iran, and we'll see what happens." Addressing the timeline for a potential US military response, Trump said, "I'm giving them a period of time, and I would say two weeks would be the maximum," explaining that the goal was to "see whether or not people come to their senses." A day earlier, Trump had said he would "make my decision whether or not to go within the next two weeks" because of a "substantial chance of negotiations" with Iran. That statement was interpreted as opening a short diplomatic window, prompting European leaders to meet with Iran's foreign minister in Geneva. However, Trump said the discussions "didn't help," and his latest remarks suggest he may act sooner if there's no progress on Iran's nuclear programme. (With inputs from agencies)
Time of India
33 minutes ago
- Time of India
ICICI sought to acquire HDFC, reveals chairman Deepak Parekh
Former HDFC chairman Deepak Parekh and ICICI Bank chief Chanda Kochhar MUMBAI: Former HDFC chairman Deepak Parekh, in a candid disclosure, said that then ICICI Bank chief Chanda Kochhar had proposed a merger between the two lenders - well before HDFC's eventual reverse merger with its banking subsidiary. During an interaction with Kochhar on her channel, Parekh said: "I remember you talking to me once. I remember it very clearly. It's never been talked about in public, but I'm willing to share it now. You said that ICICI started HDFC. 'Why don't you come back home?' That was your offer." Parekh said he declined the offer, saying "it won't be fair" or "proper with our name and the bank and all". Parekh said the eventual merger with HDFC Bank, completed in July 2023, was driven mainly by regulatory pressure. RBI had classified NBFCs like HDFC, then holding assets over Rs 5 lakh crore, as systemically important, breaching the Rs 50,000-crore threshold. "RBI supported us and they pushed us into it to some extent and they helped us," he said. However, he added that there were "no concessions, no relief, no time, nothing". Describing the day the merger concluded, Parekh called it "a sad day and a happy day". He said, "It's good for the institution. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 180k traders turn to IC Markets for optimum CFD trading conditions IC Markets Sign Up Undo It's good for the country to have large banks. Look at how large Chinese banks are. We have to be bigger, larger in India." Parekh believes that Indian banks must grow through acquisitions to become stronger in future. On broader economic concerns, Parekh cited persistent uncertainty in supply chains, trade policy, and export conditions as top CEO concerns. Calling insurance the "least understood product", Parekh criticised "mis-selling by banks" driven by high upfront commissions. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
33 minutes ago
- Time of India
Said no to Trump invite as I had to visit land of Lord Jagannath: Modi
1 2 Bhubaneswar: Prime Minister Narendra Modi on Friday finally explained the reason for declining US President Donald Trump 's recent invite for a stopover in Washington on his way back from Canada. Addressing a gathering in Bhubaneswar on Friday, PM Modi said he had to say no to Trump's invite as he did not want to miss his scheduled visit to the "land of Lord Jagannath". Speaking at an event to mark one year of Mohan Charan Majhi-led BJP govt in Odisha, Modi said, "The President of the United States called me, saying, 'Since you are in Canada, please come over. We will have a meal together and talk.' He extended a warm invitation. I thanked him for the invitation and politely declined, expressing that visiting the land of Mahaprabhu was essential for me. The devotion for Mahaprabhu and your love drew me here. " The explanation puts to rest speculations that had built up ever since foreign secretary Vikram Misri put on record that PM Modi had to skip the Trump meeting due to "prior commitments". While Majhi's first anniversary as CM was on June 12, the Odisha govt timed the main celebration on Friday to accommodate the PM's schedule. Any change in plan could have put the govt in an awkward position in a state where the BJP swept the Lok Sabha polls, winning 20 of the 21 seats, and stormed to power by winning 78 of the 147 assembly seats. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Stunning 2-Bed Senior Houses: Take A Peek Inside! GoSearches | Search Ads Undo In what was Modi's sixth visit to the state in the past one year, the PM praised Odisha's progress under the BJP govt, emphasizing the state's role in India's cultural and economic development. He highlighted various initiatives aimed at improving infrastructure, healthcare, and economic opportunities for the people of Odisha, particularly tribal communities. The PM also highlighted the significant role of eastern India in the country's growth trajectory and underscored the region's potential as a catalyst for India's progress in the 21st century. "The development of 21st century India will gain momentum from eastern India. This is the era of Purvodaya," the PM said.
