This thesis critically examines exports of Iranian natural gas to regional and international markets. Owning the world’s 2nd largest proven natural gas reserves, Iran can potentially be considered a major gas exporter. Yet, stringent international sanctions, coupled with domestic politicisation of the industry and lack of an ‘attractive’ investment framework, have made Iran unable to capitalise its huge natural gas potential both in domestic and international markets. In this research, a multidisciplinary approach is adopted to examine the main challenges hampering Iran’s ability to become a major gas exporter. These challenges range from political and legal to economic and fiscal. In this thesis, the extent to which the Iranian gas industry is affected by progressive international sanctions, particularly as a result of U.S. pressures, is considered extensively. It appears that U.S. and international sanctions have had detrimental impact on the development of the Iranian petroleum industry through limiting Iran’s access to financial institutions and technologies. In addition, in Iran the constant policy struggle between the need for foreign investment and technology in the petroleum sector on one hand, and the sentiment towards foreign exploitation on the other, is analysed in terms of impact of political challenges in the development of Iran’s natural gas industry. The legal and fiscal terms of buyback contracts as the only available contractual framework for development of the upstream petroleum sector is also reviewed as a part of the evaluation of the ‘attractiveness’ of Iran’s investment framework. This research offers second thoughts on the over-estimated role of law in development of natural resources and illuminates the importance of other factors, including policy making and governance institutions, in attracting foreign investors and the development of the petroleum sector. In the discussion about the development of Iran’s natural gas industry, subsidies are also identified as economic challenges, deterring foreign investors, causing wasteful consumption and creating an inflated domestic market. Two years into the subsidies reform in Iran, the plan has fallen short of achieving its objectives, including controlling domestic energy consumption and freeing up capital to be re-invested in the petroleum industry, mainly as a result of deteriorating economic conditions and Government mismanagement. The issue of supplying gas to domestic or export markets in the light of the country’s current limited production capacity has turned into a major political debate between the Parliament and the Government resulting in failure to fully meet its supply commitments to either market. Inability to produce adequate volumes of gas and its ‘ambitious’ gas expansion policies both in domestic and international markets, has forced the country to import gas from Turkmenistan. The unexpected title of ‘a net gas importer’ for a country with the 2nd largest gas reserves in the world, has raised many questions over the country’s ability to substantially contribute to the growing global gas market. In this thesis, attempts are also made to highlight the social and economic benefits of allocating gas to domestic and export markets. However, conducting a solid economic analysis is not possible, as first of all, such an analysis is beyond the scope of this thesis, and secondly the required data and statistical material is not available or accessible. This research suggests that given the country’s huge domestic market, industrialisation targets, young population and the necessity for job creation, as well as country’s dependence on gas re-injection into oilfields to maintain the oil production, Iran may not want to be “the next Qatar” in terms of exports. Available data suggest that gas export is not the most beneficial economic outcome for Iranian gas; and for all of the foregoing reasons, and even if sanctions are removed, it would take Iran 15-20 years to develop such a major export capability. This thesis offers recommendations to policy makers to conduct comprehensive economic analyses over costs and benefits of allocating gas to domestic and export markets, while giving due consideration to the pressing issue of ‘welfare maximisation’ and distributional impact of consuming gas domestically.