Iran Denies Israel's Attack On World's Largest Gas Field: Why South Pars Is Key To Global Energy Ops

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Iran shares the South Pars gas field with Qatar. Striking it would mark a major escalation in the conflict, which had already pushed oil prices up 9% on Friday
Contrary to media reports, Iran oil ministry on Sunday denied Israel's attack on their oil and gas sector, claiming the Isfahan refinery operations continue without disruption.
The semi-official Tasnim news agency had on Saturday reported that Iran had partially suspended gas production at the world's biggest gas field after an Israeli strike caused fire at South Pars gas field.
Israel launched an air offensive against Iran on Friday, killing commanders and scientists and bombing nuclear sites in a stated bid to stop Tehran building an atomic weapon. Iran shares the South Pars gas field with Qatar. Striking it would mark a major escalation in the conflict, which had already pushed oil prices up 9% on Friday even though Israel spared Iran's oil and gas on the first day of its attacks.
Operations at the Isfahan refinery continue without disruption, Iran's oil ministry told state media on Sunday, denying reports of an incident or attack against the facility.— Iran International English (@IranIntl_En) June 15, 2025
The South Pars field is located offshore in Iran's southern Bushehr province and is responsible for the lion's share of gas production in Iran, the world's third largest gas producer after the United States and Russia.
The fire broke out in one of the four units of Phase 14 of South Pars, halting production of 12 million cubic metres of gas, Tasnim had said.
Iran produces around 275 billion cubic meters (bcm) of gas per year or some 6.5% of global gas output, and consumes it domestically as it cannot export gas due to sanctions.
Iran shares the field with Qatar, which calls the field North Field. Qatar produces 77 million tonnes of liquefied gas from the field with the help of global majors such as Exxon and Shell and supplies the gas to Europe and Asia.
Israel had so far restricted its strikes to military and nuclear installations. The South Pars gas field attack could change the dynamics.
'This is probably the most important attack on oil and gas infrastructure since Abqaiq," said Jorge Leon, an analyst at Rystad Energy, referencing the 2019 attack on Saudi oil facilities that shook global markets, as per Bloomberg.
THE TIMING
Israeli strikes have come at a bad timing for Iran, which is grappling with nationwide protests over chronic water and power shortages. Blackouts have cost industries $20 billion annually, worsened by IRGC-linked Bitcoin mining diverting electricity from civilians. Hyperinflation has exceeded 50% for seven consecutive years, with the currency collapsing to 828,500 rials against one USD. Critical shortages of medicine, fuel, and electricity have eroded public trust.
Protesters in 155 cities have been chanting 'No Light, No Water, No Future'. Cement prices have surged 200% in three months, and unpaid bread subsidies have triggered baker strikes.
IRGC-controlled conglomerates like Setad and Khatam Base dominate over 50% of the GDP. Public anger is fuelled by scandals, including a $3.7 billion fraud by Debsh Tea. Over 50% of voters boycotted recent elections, showing widespread disillusionment. Movements like 'Women, Life, Freedom' from 2022 persist despite crackdowns.
WILL KHARG, HORMUZ BE NEXT?
There are fears that Israel could attack Iran's main oil export terminal Kharg Island and the Strait of Hormuz, through which 21 per cent of the world's LNG and 14 million barrels of crude oil daily pass.
Earlier, there were fears that Iran would block Hormuz supply line.
'This is a warning shot that Israel is willing to hit Iranian energy infrastructure if Israeli civilians are targeted," said Richard Bronze, head of geopolitics at Energy Aspects, as per The NYT.
Analysts warn that if the conflict continues to escalate, Qatar's energy operations and Israel's own infrastructure could also become targets. Both countries play critical roles in energy exports, and any attack could create ripple effects across Asia, Europe, and global supply chains.
IMPACT ON US, CHINA
In the 1970s, Iran accounted for 10 per cent of the world's oil production. 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.
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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.
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tags :
Israel Iran tension
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New Delhi, India, India
First Published:
June 15, 2025, 14:59 IST
News explainers Iran Denies Israel's Attack On World's Largest Gas Field: Why South Pars Is Key To Global Energy Ops