The country is offline: The energy crisis in Iran has reached a critical point — New York Times

Despite the fact that Iran has some of the largest reserves of natural gas and crude oil in the world, it found itself in a full-scale energy emergency amid serious geopolitical setbacks. It is reported by The New York Times.

Government agencies in In Iran, they are closed or working on a reduced schedule, schools and colleges have gone online only, highways and shopping malls have been plunged into darkness, and industrial enterprises have been left without electricity, which has led to an almost complete shutdown of production. Despite the fact that the country has some of the largest reserves of natural gas and oil in the world, it is in a full-scale energy crisis, which can be explained by years of sanctions, poor governance, aging infrastructure, wasteful consumption and targeted attacks by Israel, the newspaper writes.

For most of last week, Iran was practically turned off in order to save energy.

"We are facing a very serious imbalance in gas, electricity, energy, water, money and the environment. All of them are at a level that could turn into a crisis," Iranian President Masoud Peseshkian said in a televised address to the nation this month.

The problem has reached a critical point, he warned.

According to officials, the shortage of gas needed by the country for normal functioning is about 350 million cubic meters per day, and since it got colder and demand rose sharply, officials had to resort to extreme measures to normalize gas supply. The government faced a tough choice: either turn off the gas supply to residential buildings, or to power plants that generate electricity. The authorities chose the latter option.

"The government's policy is to prevent the shutdown of gas and heat in homes at any cost. They are struggling to cope with the crisis and contain the damage, because it looks like a powder keg that can explode and cause unrest throughout the country," said Seyed Hamid Hosseini, a member of the energy committee of the Chamber of Commerce.

By Friday, 17 power plants were completely shut down, and the rest were only partially working.

Tavanir, the state—owned energy company, has warned manufacturers of everything from steel to glass, food and medicines that they need to prepare for large-scale power outages that could last several days or weeks. The news sent both state-controlled and private industry into a tailspin.

The situation is catastrophic and unlike anything the industry has ever faced, said Mehdi Bostanci, head of the country's Coordinating Council for Industries. He believes that losses just last week could reduce production in Iran by at least 30-50% and amount to tens of billions of dollars.

Analysts attribute the current crisis to a whole bunch of problems, including underdeveloped infrastructure along the entire production and supply chain. Because of the sanctions, it is difficult for Iran to attract foreign investment to expand and modernize its energy sector. Mismanagement, corruption and low prices, which fuel wasteful consumption, also have an impact.

"All along the chain, you basically see problems when Iran is not able to produce as much electricity as it needs, and at the same time it is not able to reduce its consumption. It's very difficult to keep going like this," said Esfandiyar Batmanghelidjh, executive director of the Bourse & Bazaar Foundation, a London—based economic think tank that tracks Iran's economy.

"Iran's regional status as an influential player has seriously declined after the collapse of the Assad government in Syria and Israel's destruction of Hezbollah in Lebanon. It is expected that the return of President—elect Donald Trump will put maximum pressure on the regime, and his policies will further increase pressure on the economy, "the newspaper notes.