Why oil giant Iran struggles to supply gasoline

For years, Tehran portrayed fuel self-sufficiency as proof that sanctions had not crippled the energy sector. But recent comments by officials suggest the country was already facing a daily shortfall of roughly 20 million liters before the latest war.

MP Reza Sepahvand recently said production stands at around 105 million liters a day while consumption is closer to 135 million.

War damage, disrupted imports and pressure on petrochemical units have now pushed a long-running structural problem into public view.

Why a producer runs short of gas

Iran may hold vast oil reserves and operate sizable refineries, but that does not automatically guarantee enough gasoline for domestic use.

Much of the country’s refining system depends on aging infrastructure, limited maintenance and technology constrained by years of sanctions, leaving production increasingly out of step with demand.

Fuel consumption is also on the rise. Expanding cities, heavy reliance on private cars and millions of older, fuel-inefficient vehicles place constant pressure on supply.

Cheap subsidized gasoline also encourages overuse, while large price gaps with neighboring countries fuel widespread smuggling that pulls millions of liters out of Iran each day.

The crisis is tied to politics as much as energy. Subsidies help keep fuel affordable and reduce public frustration, but they also deepen waste, smuggling and financial pressure on the state.

Iranian leaders know reforms are necessary, yet past fuel-price increases have triggered unrest, leaving the government trapped between avoiding social anger and managing a system that is becoming harder to sustain.

How war made things worse

The latest war has turned a chronic imbalance into a more immediate stress test. Strikes on energy infrastructure and disruption around the Strait of Hormuz have affected refining, storage, distribution and imports.

Even when refineries are not completely knocked offline, damage to depots, logistics networks and supporting industrial units can sharply reduce the amount of usable gasoline reaching consumers.

One overlooked issue is Iran’s reliance on petrochemical components for gasoline blending.

When refineries cannot produce enough high-quality gasoline, producers blend in octane-boosting components to improve fuel performance. These can include aromatic-rich streams such as benzene, toluene and xylenes, as well as additives such as MTBE.

Such components are widely used in global fuel production because they raise octane levels. The difference lies in regulation.

Many countries tightly restrict substances such as benzene because of health and environmental risks. Iran’s heavier reliance on petrochemical blending can worsen pollution if quality controls weaken or blending exceeds safer limits.

Higher levels of benzene and aromatics increase harmful emissions, especially in congested cities such as Tehran, where air quality is already poor. MTBE also carries environmental risks, particularly for groundwater contamination.

Damage to petrochemical facilities therefore matters for two reasons: it can reduce the supply of components Iran needs to stretch gasoline production while also increasing pressure to rely on lower-quality blending practices to keep fuel flowing.

Either outcome creates problems: tighter supply or worsening health and environmental costs.

When will it really bite?

Before the war, Iran managed the imbalance through imports, rationing, fuel cards, blending and informal restrictions. Those measures helped prevent a full public breakdown but never solved the underlying problem.

If the reported daily shortfall of 20 to 30 million liters persists, shortages could become more visible within weeks or months, especially during peak summer demand.

Longer queues, tighter quotas, regional outages, rising black-market prices and growing pressure on transport and agriculture are among the most likely consequences.

Recent public comments by lawmakers suggest officials are no longer able to present the issue as a temporary inconvenience.

War damage has made repairs and imports more difficult, while years of overworking refineries, postponing maintenance and relying on imports and petrochemical blending left little room to absorb new shocks.

Partial recovery of refining and distribution capacity may be possible within one or two months if damage is limited and supply routes remain open. Full normalization would likely take far longer because the deeper causes are structural: rising demand, old vehicles, sanctions, smuggling, weak investment and distorted pricing.

Iran’s gasoline shortage is therefore not only an energy problem but also a governance problem.

For ordinary Iranians, the consequences are increasingly visible in longer fuel lines, higher unofficial prices, rising transport costs and worsening air pollution: exposing the widening gap between official claims of resilience and economic reality.