Iran has a wide range of productive, financial, service, industrial and agricultural infrastructure. The military targeting of this infrastructure can disrupt or halt the operation of industries and daily life, increase costs and living pressures, and thereby ultimately undermine security, financial stability and political stability.
Iran’s economic infrastructure also includes energy installations of various kinds — electricity, gas, oil, fuel, derivative and oil export platforms — as well as domestic/international trade, transportation and tourism-related infrastructure, such as airports, ports, rail networks, roads and logistical hubs. It also covers financial, communication and internet networks, as well as strategic industrial production installations including petrochemicals, steel and automobile manufacturing. Finally, it is important not to dismiss vital food, water and service infrastructure like dams and water treatment plants.
Some of Iran’s economic infrastructure was targeted in the early days of Israel’s strikes, aiming to cause economic damage and internal hardship for ordinary Iranians and the existing political system. These strikes were particularly focused on neutralizing air defenses in regions where Iran’s critical economic and strategic infrastructure is concentrated, mainly in southern Iran and the capital (see Figure 1). The Israeli approach indicates an ongoing effort to deplete Iran’s vital infrastructure, which is highly dangerous as it could destabilize Iran’s economy and potentially affect its political system. Understanding the nature of Iran’s economic infrastructure, its economic role and locations is crucial to assessing the various economic consequences of targeting it through military strikes, especially for Iran’s internal stability.
Pillars of Iran’s Economic Infrastructure and the Repercussions of Damage Through Military Strikes
Diverse Energy Installations
– Gas production plants: Critical for the local economy, as over 80% of electricity generation depends on gas for domestic and industrial use, alongside exports to neighboring countries like Iraq and Türkiye. Key gas fields and pumping stations are located in Khuzestan Province, southwest of Iran, particularly the Pars gas field, Iran’s largest. Targeting these plants and stations primarily harms domestic electricity production, threatening daily life and industrial output.
– Fuel refining plants: Attacking these plants severely affects domestic fuel supplies, as diesel, gasoline and other derivatives are generated at these sites, mainly for internal consumption. Sometimes, production does not meet demand, so targeting these plants risks further fuel shortages and increased internal pressures. These refineries are distributed across major urban centers like Tehran, Isfahan, Shiraz and Bandar Abbas. Israel has targeted key fuel refineries such as the Shahran refinery in Tehran.
– Electricity generation and distribution networks: These networks are located across Iranian provinces and include plants powered by oil, gas, hydro, wind and nuclear energy (e.g., Bushehr). Strikes on these plants will disrupt daily life and commercial activities, especially since Iran already faces daily electricity outages. Such targeting worsens internal dissatisfaction amid the heat of summer and rising prices.
– Oil export platforms: Kharg Island, off Iran’s southern coast in the Arabian Gulf, is Iran’s main oil export platform, capable of handling up to 5 million barrels per day and storing 28 million barrels. Attacking it hampers Iran’s oil exports, which range between 1.4 million and 1.7 million barrels daily, mainly exported to China. Damage to these platforms would also hike global oil prices (which increased by about 15% in the first two days of hostilities) and reduce Iran’s oil revenues, which exceed $50 billion annually.
Figure 1: Distribution of Oil and Gas Infrastructure in Iran

Source: Eurasian Century.
Airports, Transport and Logistic Hubs
– Airports: Major airports include Imam Khomeini International (main airport for Tehran), Mashhad International (religious capital), Shiraz International and Mehrabad in Tehran for domestic flights.
– Ports: Key ports include Bandar Abbas (the largest for foreign trade), Bandar-e Imam Khomeini, Chabahar, Bushehr, Kish Island and Shahid Rajaee.
– Transport and logistics: Extensive rail networks connecting Iran’s four cardinal directions, Tehran Metro, roads, bridges, tunnels through the Zagros Mountains and freight corridors in Khuzestan Province, southwest of Iran, for natural resources.
Targeting the aforesaid infrastructure will impede civil aviation, impact tourism, heighten panic among foreigners, disrupt non-oil trade (over $130 billion annually), hamper economic growth and weaken internal commerce and supply chains, raising prices and affecting transit trade with Central Asia.
Industrial and Strategic Food Warehouses
– Petrochemical complexes: Vital for Iran’s economy, operated notably by the Islamic Revolutionary Guard Corps (IRGC), accounting for over 33% of non-oil exports and generating more than $15 billion annually. Concentrated in Asaluyeh, Mahshahr and Isfahan near oil and gas fields in southern Iran.
– Steel factories: These industrial units are essential for domestic demand and exports, making Iran among the top 10 steel producers globally. They are located mainly in Isfahan and Khuzestan, southwest of Iran.
– Automobile factories: The automobile sector provides hundreds of thousands of jobs, with major plants in Tehran, such as Iran Khodro and Saipa.
Targeting these industrial units exerts significant financial pressure on Iran, especially on the IRGC, risking the loss of costly investments and disrupting supply-demand balances in industrial markets.
Financial and Communication Infrastructure
– Financial systems: These cover banking networks, stock markets and key institutions like the Central Bank of Iran, Bank Melli, Bank Mellat and Ansar Bank (linked to the IRGC), mostly based in Tehran.
– Communication networks: These include submarine cables supplying internet via the Arabian Gulf, landline networks and electronic platforms for oil, gas and banking operations.
Israel attacking these systems/networks will destabilize financial markets and trade, causing chaos and fear among the populace, threatening overall economic stability.
Agriculture and Water Infrastructure
– Dams: Iran has dozens of large dams, including Karkheh Dam in Khuzestan and others on the Karun River, used for water supply, irrigation and hydroelectric power.
– Water plants: Iran depends on river dams, and groundwater, as well as desalination and wastewater treatment plants, especially in large urban centers like Tehran, Mashhad and Isfahan. The country suffers from increasing water scarcity and drought.
Targeting agriculture or water infrastructure will lead to catastrophic economic and health consequences, such as floods, mass displacement, food shortages and price hikes, water shortages, pollution, disease and environmental damage.
Assessment: The Broader Implications of Continued Military Operations on Iran’s Economy
Iran’s diverse economic infrastructure is predominantly concentrated in the southwest, south, and Tehran. Initial Israeli strikes focused on neutralizing air defenses in western and southern Iran, targeting energy, industrial and port installations — such as the Pars gas field, oil refineries and some rail lines and ports.
This indicates Israel’s intent to use civilian economic targets to damage Iran’s internal economy and exert pressure, especially given Iran’s pre-existing high inflation (~40%) before hostilities, which has likely increased due to currency depreciation (over 12% after strikes), government closures of financial markets and internal migration away from Tehran. Iran is also facing increasing fiscal deficits due to US sanctions, which limits its capacity to recover and repair damages swiftly.
Prolonged conflict will not benefit the Iranian economy or the political system. Despite some damage to Israeli economic targets (including missile strikes on energy infrastructure, factories and ports like Haifa), most Israeli infrastructure remains protected by air defenses, military superiority and US support, unlike Iran’s vulnerable infrastructure.
The Israeli government’s desire to enact regime change by force suggests that the continued targeting of Iran’s vital economic infrastructure remains a real scenario, with disastrous consequences given Iran’s large population (~90 million) and fragile economic state. Negative external effects will include destabilization of global energy markets, financial systems and investment flows, impacting international growth and market prices — posing a serious threat to global economic stability. The international community’s efforts to prevent such an escalation and find a de-escalation formula between Israel and Iran may accelerate to avoid uncontrollable chaos.
Conclusion
Despite Iran’s economic vulnerabilities — well-known to Israel — Iran possesses an extensive range of economic infrastructure and vital energy, industry, agriculture, water, transport, logistical, port and finance capabilities and networks, mostly concentrated in the southwest and Tehran. Israel not only targeted Iran’s air defenses at the outset of the conflict but also struck critical infrastructure, especially in the west, south and Tehran, including gas and fuel plants, to increase pressure on the Iranian government and provoke internal unrest. Israel is aware that depleting Iran’s economy impedes its military and nuclear recovery and delays the resolution of the ongoing conflict.
It is likely that Israel will continue targeting Iran’s economic infrastructure unless a ceasefire is reached, even though this will impact Israel’s own economy and extend harm to regional and global economies. Conversely, the desire to prevent a full-scale economic collapse may intensify international efforts toward mediating a cessation before the situation spirals further out of control.