The correct answer is option 4, Rayon. Rayon is a synthetic fabric made from cellulose, which is extracted from wood pulp. The process of making rayon requires a high amount of water. Water is used in various stages of production, including dissolving the cellulose, filtering the solution, and washing the fibers.

Option 1, Iron and steel, is not the highest consumer of water among the given options. While the iron and steel industry does require water for cooling and various other processes, the consumption is not as high as in rayon production.

Option 2, Oil refining, also requires a significant amount of water for cooling, cleaning, and processing purposes. However, it is not the industry with the highest water requirement among the given options.

Option 3, Paper from wood, does require water for various stages of production, such as pulp preparation and papermaking. However, the water consumption in this industry is not as high as in rayon production.

Alert - Correct answer should be option 4, Rayon.