The Iranian oil ministry’s news agency Shana reported on July 19 that the country’s 500,000 barrel per day (bpd) Abadan refinery had suffered a fire, with one of the plant’s employees passing away before the blaze was contained.

According to Shana, the incident has had no effect on operations at the facility.

The new agency continued to note that according to initial technical probes, “the cause of the fire was a leak in one of the pumps in Unit 70, and no evidence of sabotage or human intervention has been observed so far”.

Referencing the incident, Abadan governor Khosrow Pirhadi told Iran’s state TV that numerous workers had suffered burns, and that three were currently in critical condition.

The official also remarked that worn out parts at the plant could have been the main cause of the incident – something that is likely to be the case considering the age of the facility, initially built in 1912 by the Anglo-Persian Oil Co. (later BP).

Located in the Khuzestan province, Abadan refinery is likely in serious need of renovation. Like most Iranian oil and gas processing plants, decades of international sanctions and rising domestic demand has taken its toll, preventing the facilities from obtaining spare parts and carrying out necessary maintenance, as well allowing for decreased production capacity, reduced efficiency, and an inability to carry out upgrades.

Other sanctions placed on the country by the US include those targeting Iran’s crude trade – which acts as a lifeline for the economy.

In 2024 alone, the US’s extended sanctions were forcing tankers away from trade routes to China, reducing the total number of ships able to carry the commodity.

In a bid to avoid the US from paying too much attention, tankers transiting the route between Iran and China tend to anchor at a midway point in Southeast Asia to wait for a separate ship that will then transport the oil to its destination. The sanctions introduced in late 2024 started to have a noticeable effect on the system however, with various operators forced to look for other trade routes, according to ship-tracking data provided by Bloomberg at the time.

Moreover, the results of an increase in time and effort to ship crude translated directly to independent refiners in China, who were faced with higher prices as a result. This led some to search for alternatives from suppliers in other Middle Eastern regions and Africa, tapping into oil that remained unsold after past trading cycles.

Such measures have given Iran less income to utilise for its own domestic energy infrastructure – a downward spiral that can only be reversed with the removal of all sanctions.