An investigation on the petrochemical industry development in Iran: a system dynamics approach

Abstract

Petrochemical industry plays a significant role to achieve high value-added from oil and gas reserves, especially for countries with huge resources of fossil fuels. This study aims to investigate and model the development dynamics of the petrochemical industry in Iran using system dynamics (SD) methodology. Consequently, after describing the interrelationships among the main variables making the dynamics of domestic investment, a quantified model is built to simulate possible outcomes under different scenarios. According to the results, in 2025, the capacity of Iran's petrochemical productions will range from 73 to 78 million tons. Also, the value of products will range from 26 to 36 million dollars (USD) in 2025 that can be an interesting research area to investigate how the value of diversified petrochemical products can be increased. Finally, through a model-based scenario and policy analysis, some optimised policies are offered to enhance the petrochemical industry of Iran in the future.