Iranian Natural Gas Production and Trade Behavior under Unconventional Gas Developments: A System Dynamics- Agent-Based Modeling Approach


1 Department of Economics, Meybod University, Meybod, Iran

2 Department of Economics, Shiraz University, Shiraz, Iran.

3 Department of Management, Shiraz University, Shiraz, Iran.



Forecasting a growth in gas demand in the next 20 years, the Shale gas expansion, and major developments in the gas regional markets, show structural changes in gas trade. The question raised is whether the U.S. shale production expansion and the emergence of strategic resources in Iran, to increase its gas trade share in the Middle East, can cause a significant change in the world gas trade or not. Accordingly, the aim of this study is a systematic analysis of Iran's natural gas production. To achieve this goal, the system dynamics-agent-based modeling has been used due to the dynamic nature of natural gas production and trade in Iran and its global trade in the period 2015-2035. The results show that the U.S. will become the largest gas trader in North America from 2020 onwards. Iran's share in gas exports of the Middle East gas trade has a trend in form of a reversed U shape. By continuing the current status, Iran's percentage share will be reduced to less than 5%. This rate in the SD -AB model, which has a higher accuracy than the SD model, can reach over 35% by 2035 through the scenarios of a 75% increase in the exploration rate, a 20% increase in investment in development, and a 5% increase in investment in technology improvement. Based on these results, we can expect important changes in the world gas trade during the next two decades.