Page 25 - Iran OUTLOOK 2025

production sites to domestic and export markets.
A particularly noteworthy development was Iran's announcement regarding the planned deployment of its first artificial intelligence-equipped oil well. This initiative signals a strategic move towards modernising extraction processes through advanced technology integration. The incorporation of AI technology in well operations represents a significant step in Iran's efforts to enhance operational efficiency and maintain competitive capabilities in global oil markets.
• 8.2 Gas production and transport
The energy crisis that struck Iran in December 2024 revealed fundamental challenges in the country's energy infrastructure and highlighted the complex interplay between industrial development and energy security. The severity of electricity shortages forced the government to take the drastic step of temporarily closing industrial towns nationwide, a measure that underscored the extent of the crisis and its impact on economic activity.
The scale of investment required to address these systemic issues was substantial, with estimates indicating a need for $13bn annually over an eight-year period to develop adequate gas infrastructure and address the persistent shortfall. This investment requirement was particularly challenging in the context of US sanctions, which constrained Iran's access to international financing and technology.
The relationship between these immediate energy shortages and longer-term infrastructure needs points to a critical vulnerability in Iran's industrial and economic planning. The necessity of shutting down industrial towns – key centres of manufacturing and economic activity – demonstrates how energy infrastructure limitations can directly have an impact on productive capacity. The $13bn annual investment figure represents not just a financial challenge but also highlights the technical and logistical complexity of upgrading national energy infrastructure while operating under international restrictions.
• 8.3 Electricity production
In 2024, Iran's electricity sector faced severe operational challenges that highlighted fundamental infrastructure weaknesses and growing supply-demand imbalances. The disparity between installed and
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