DOHA: Israel struck an installation at Iran’s South Pars gas field on Saturday, marking the first attack on Iran’s oil and gas sector as part of what Israeli officials have described as a prolonged operation to prevent Tehran from building an atomic weapon.

Iran partially suspended gas production from the South Pars field, which is Iran’s portion of the world’s largest natural gas reserve.

Iranian authorities also reported Israeli strikes on a Tehran fuel depot and an oil refinery near the capital, but said the situation was under control.

World’s largest gas reserve

Iran produces natural gas from the offshore South Pars field, which accounts for about a third of the world’s largest reservoir of natural gas.

Analysts say Opec’s ability to offset lost Iranian supply is limited

The reservoir is shared with Qatar, which calls its portion the North Dome.

Due to sanctions and technical constraints, most of the gas Tehran produces from South Pars is used domestically.

In 2023, Iran’s total natural gas production reached 266.25 billion cubic meters, with domestic consumption at 255.5bcm, according to the Gas Exporting Countries Forum. Only about 15.8bcm was exported.

Saturday’s attack targeted four units of Phase 14 of South Pars, about 200 kilometres from Qatar’s gas installations, many of which are joint ventures with major international energy firms, including ExxonMobil and ConocoPhillips.

The entire reservoir contains an estimated 1,800 trillion cubic feet of usable gas—enough to supply the world’s needs for 13 years, or to generate enough electricity to power the U.S. for more than 35 years.

Sanctions and OPEC

Iran’s oil production peaked in the 1970s, reaching a record 6m barrels per day in 1974, more than 10 per cent of global output at the time, according to OPEC data. The US imposed its first sanctions on Tehran in 1979, with several more waves following over the decades.

Sanctions were tightened significantly in 2018 after the US exited a nuclear accord, causing Iran’s oil exports to fall to nearly zero during some months.

Exports have since risen under President Joe Biden, with analysts noting that sanctions have been less rigorously enforced and Iran has found ways to evade them.

Iran is exempt from OPEC+ output restrictions.

Main buyer of Iranian oil

Iran’s crude exports have climbed to a multi-year high of 1.8m barrels per day in recent months, the highest since 2018, driven by strong Chinese demand.

China does not recognise sanctions against its trade partners and the main buyers of Iranian oil are Chinese private refiners.

Some of these refiners have recently been placed on the US.Treasury sanctions list, but there is little evidence this has significantly impacted flows from Iran to China.

Iran has long evaded sanctions through ship-to-ship transfers and by hiding ships’ satellite positions.

Production and infrastructure

Iran, the third-largest producer in OPEC, extracts about 3.3m barrels per day of crude oil and another 1.3m bpd of condensate and other liquids, totalling about 4.5pc of global supplies.

In May, it exported about 1.8m bpd of crude and condensate, according to Kpler, with the remainder processed in domestic refineries with a total capacity of 2.6mbpd.

The country also produces 34bn cubic feet of gas per day, accounting for 7pc of global production, all of which is consumed domestically.

Iran’s hydrocarbon production facilities are mainly in the south-west, with oil in Khuzestan province and gas and condensate in Bushehr province.

About 90pc of its crude is exported via Kharg Island.

Analysts say Saudi Arabia and other OPEC members could compensate for any drop in Iranian supply by using spare capacity, but with several producers raising output targets, spare capacity is becoming more strained.

Published in Dawn, June 16th, 2025