A few weeks after heavy U.S. and Israeli attacks, and under the shadow of a fragile ceasefire, Iran is facing a level of destruction incomparable to any past experience. Unlike the Iran-Iraq war, when damage was largely confined to border regions, this time the country’s main economic, energy, and technology centers have been targeted; what some experts describe as “the neutralization of vital infrastructure.”
Although preliminary figures indicate the destruction or severe damage of more than 93,000 residential and commercial units, the main damage has occurred in key base industries; a sector whose reconstruction is not compatible with the country’s current resources.
Mahshahr; a blow to the country’s foreign currency lifeline
The greatest concern centers on the Mahshahr petrochemical region, where Bandar Imam and seven other major complexes accounted for 60% of the capacity of this strategic hub. During the years that the regime was under sanction, Mahshahr was one of the most important sources of immediate liquidity for importing essential goods.
If these complexes are completely taken offline, Iran’s petrochemical exports will fall from 13 billion dollars to less than 6 billion dollars; meaning the loss of half of its foreign currency resources. The physical reconstruction of these eight complexes alone will cost about 20 billion dollars.
At the same time, damage to the Fajr one and two power plants, which supply electricity to the petrochemical industries, carries at least 1 billion dollars in restoration costs. Without this infrastructure, even undamaged units are effectively shut down. The main difficulty is replacing control equipment and precision instruments, access to which has become extremely limited under sanctions.
Asaluyeh; paralysis through the destruction of support facilities
In Asaluyeh, the focus of the attacks was not on the main structures, but rather on auxiliary facilities such as electricity, water, and oxygen. Nevertheless, these same damages have effectively paralyzed the petrochemical units because of the interconnected production chain.
In the upstream sector, there is also major uncertainty regarding phases 3 to 14 of South Pars; facilities that process 100 million cubic meters of gas per day. If completely destroyed, their restoration will require at least 5 billion dollars.
Logistics collapse; the main obstacle to reconstruction
One of the most serious post-ceasefire crises is the collapse of the country’s transit network. Attacks on strategic bridges, rail lines, and transportation infrastructure have disrupted the goods movement network; this in conditions where the sector was already in poor shape before the war due to deterioration and sanctions.
The sharp rise in transportation costs is now also creating problems for the reconstruction of other sectors. Even if heavy power plant parts and raw materials are secured, the absence of safe and functional routes causes them to be stranded in customs and delays reconstruction.
Steel and refining; added pressure on the economy
The damage to Mobarakeh Steel and Khuzestan Steel, which together hold 70% of Iran’s steel capacity, is another major challenge. Iran previously exported 11 million tons of steel annually worth 6 billion dollars, but now, with the vast needs of reconstruction projects, it not only loses this income but is also forced to spend 8 to 10 billion dollars annually on steel imports.
Alongside this sector, the Lavan refinery has also been damaged and requires at least 700 million dollars in funding for restoration.
Technological reconstruction; a multi-year path
The damage is not only physical. Rebuilding research-and-development-based institutions and complex industries will be a time-consuming process. Restoring management sections may be completed within a few months, but reviving the supply chain, manufacturing, testing, and operational deployment will require between one and five years.
For this reason, returning to pre-war production quality and capacity will be a project of at least five years.
Post-ceasefire economy; a battle for survival
With declining foreign currency revenues, a logistics crisis, and the destruction of industrial hubs, infrastructure reconstruction in Iran has now turned into a battle for survival. Estimates show that the full restoration of damages inflicted on Mahshahr, Asaluyeh, Isfahan, and Ahvaz will require more than 100 billion dollars over a five-year period; this while blocked trade and banking routes have severely weakened the country’s foreign exchange reserves.
In such a situation, without the normalization of international relations and access to global markets, Iran may remain in an emergency repair phase for decades, striving only to return to its pre-war position.
