Iran’s energy sector entered the recent war facing a host of accumulated structural challenges. Despite possessing the world’s second-largest natural gas reserves and third-largest oil reserves, its electricity supply deficit, according to official Iranian estimates, reached nearly a third of national consumption. These figures reflect a stark paradox between the size of Iran’s energy resources and its ability to utilize them. Weak investment in infrastructure, aging power plants, and high losses in the grid exacerbated the electricity crisis. Furthermore, the Iranian regime’s expansionist foreign policy led to sanctions that limited the country’s ability to attract investment, access financing, and acquire modern technologies.

Despite the significant attention given to Iran’s nuclear program over decades, its actual contribution to the electricity sector remained extremely limited, with nuclear power accounting for only about 1.7% of total electricity generation, primarily through the sole Bushehr nuclear power plant. Nevertheless, the Iranian regime directed substantial resources toward developing the nuclear program, particularly its fuel cycle and uranium enrichment capabilities, reaching a 60% enrichment level before the war. This highlights a clear gap between the energy sector’s needs and the trajectory of the program. Power reactors typically use low-enriched fuel, and the Bushehr plant receives its fuel from Russia. Iran has no existing electricity needs that would require enrichment to 60%. Reaching this level does not equate to possessing a nuclear weapon, but it significantly reduces the technical distance to higher enrichment levels, making the program a constant source of tension and sanctions.

If the current standoff ends, the Iranian regime will face two main options in dealing with its nuclear program and setting its priorities for the next phase. The first option is to reprioritize and direct resources toward rebuilding infrastructure, addressing the electricity and water crises, modernizing power grids, and improving economic conditions, while returning to more transparent cooperation with the International Atomic Energy Agency (IAEA). This option could alleviate external pressure, redirect resources toward the needs of the Iranian people, and restore nuclear energy to its role within a civilian program exclusively linked to energy security and development.

The second option is for the Iranian regime to continue rebuilding its enrichment capabilities, strengthening the protection of its underground facilities, and maintaining high levels of enrichment as a strategic bargaining chip against its adversaries. Some sites and deep tunnels remain, and construction and fortification work has been observed at several of them, while the fate of a portion of the highly enriched uranium stockpile remains outside the scope of full verification by the International Atomic Energy Agency. If the regime persists in this course, it will redirect resources—which the country desperately needs for reconstruction—towards a program that was, in essence, one of the main reasons for the sanctions and the tensions that led to the military confrontation.

Herein lies the greatest dilemma: rebuilding the destroyed capabilities without addressing the underlying causes that led to their targeting could return Iran to the same cycle. Rebuilding enrichment facilities and fortifications will require substantial financial and technical resources, without addressing the electricity shortage, the aging infrastructure, or the water scarcity. Furthermore, continued ambiguity surrounding the nuclear program could perpetuate sanctions and international pressure, increasing the likelihood of renewed confrontation. This is a cost that will not be borne by the regime alone; a significant portion will be felt by the Iranian people and the country’s economy, and its security and economic repercussions will extend to other countries in the region.

Therefore, the true test facing the Iranian regime after the war lies not in its ability to rebuild what was destroyed, but rather in the priorities it chooses. Iran possesses significant human and natural resources that qualify it to build a more efficient and sustainable energy sector. However, continuing to direct resources toward enrichment and fortified facilities, at the expense of electricity, water, infrastructure, and development, will perpetuate the same approach that has burdened Iran and the entire region with a heavy cost in recent years.

Note: This article has been automatically translated, the full article is available in Arabic.

Dr. Abdulla Isa AlAabbasi, Director of Energy and Environment Studies Program