Iran, Reliable Destination for Oil Investment

Minister of Petroleum Mohsen Paknejad has said reimposition of UN Security Council sanctions on Iran would cause no new harm to the country’s oil sales. His remarks, in fact, reflect Iran’s decades-long experience in dealing with the toughest sanctions and international restrictions. In recent years, Iran has demonstrated that even under complex political and economic conditions, it has managed to preserve and expand its production and export capacities. 

This experience, along with Iran’s geopolitical position, creates an exceptional opportunity for foreign investors. The Iranian energy market is not merely a temporary or consumer-driven market; rather, it is one backed by strong infrastructure, vast reserves, and high returns on investment.

With more than 157 billion barrels of proven crude oil reserves and the world’s largest natural gas reserves, Iran holds a unique place in global energy dynamics. These immense resources guarantee returns on development projects, as the scale and sustainability of reserves enhance investment security.

As highlighted by the Minister, Iran’s oil sales team consists of highly professional experts, and years of experience under sanctions have enabled the country to devise creative solutions for maintaining exports and sustaining production. This means that the risk of investing in Iran is lower than the image often portrayed by Western media. Iran has not only adapted to restrictions but has also managed to turn them into opportunities for technology localization and innovation in sales and exchange methods.

The cost of oil production in Iran is significantly lower than in many other producing countries—around $10 per barrel in some fields. This competitive advantage ensures that oil projects in Iran remain highly profitable even amid global price fluctuations, allowing foreign investors to benefit from substantial profit margins.

In addition to the upstream sector (exploration and production), Iran also offers vast opportunities in the midstream and downstream sectors. Investments in pipelines, export terminals, petrochemical and refining industries, as well as LNG projects, can open new horizons for foreign investors.

The continued export of oil to China and other Asian customers demonstrates that, despite external pressures, Iran’s energy market has maintained its position in global trade. This stability in demand makes investment in Iran more attractive by ensuring confidence in the sale of the final product.

The Minister’s message is clear: Iran is not intimidated by sanctions and restrictions, and the country’s professional oil sales team and energy diplomacy apparatus have proven their ability to manage any crisis. What remains is for foreign investors to seize the opportunities offered by Iran’s oil industry.

Given its low production costs, massive reserves, and stable export markets, Iran stands as one of the most attractive destinations for energy sector investment. The return on investment in this field is not only high but also faster and more sustainable compared to many rival countries.

OPEC Story Goes On

Vahid Ziaei Bitaraf

In the early 1960s, oil had secured an unparalleled standing as the main artery of global economy, yet producing countries received only a small share of this vast wealth, while major Western oil companies held full control over pricing and production. In fact, state owners of these resources were only watching decisions made by the West.

BP, Chevron, Shell, Gulf Oil, Exxon, Mobil, and Texaco were seven multinational companies known as the “Seven Sisters” that dominated the oil market during those years. These companies, primarily committed to the interests of oil-consuming countries, did miss out on no opportunity to suppress the price of Middle East crude oil.

In this context, five countries — Iran, Iraq, Saudi Arabia, Kuwait, and Venezuela — gathered in Baghdad in September 1960 to create an intergovernmental organization aimed at strengthening coordination in oil policies and regaining decision-making power over their own resources. The outcome of this convergence was the emergence of the Organization of the Petroleum Exporting Countries (OPEC) — an organization that emerged in protest to the monopoly of oil companies and gradually became a political and geopolitical actor on the world stage.

Over the years, OPEC expanded, and seven other countries — Algeria, Angola, Congo, Gabon, Equatorial Guinea, Libya, Nigeria, and the United Arab Emirates (UAE) — joined the original five members. OPEC has also seen the integration and exit of countries such as Indonesia and Qatar.

Nonetheless, OPEC members, holding nearly 80% of the world’s proven oil reserves, account for about 37% of global oil production, and its decisions on production levels have a significant impact on global oil prices.

A review of  the history shows that OPEC, as the organization taking care of supply management, has acted as more than just an economic body and has, at critical junctures, been able to change the course of the energy market and even global politics. This present article aims, on the occasion of  the OPEC 65^th anniversary, to review several examples of the Organization’s role in shaping global developments.

1970s: Oil Weapon

The 1970s marked a turning point for OPEC — the moment the world realized that oil could be more than just an energy resource and could serve as a powerful political tool. At the start of this decade, under President Nixon’s policies, the United States had become heavily dependent on oil supplied by the Persian Gulf littoral states. Gasoline at just 9 cents a gallon and manufacturing of cars consuming over 29 liters per 100 kilometers revealed how deeply the US economy had become addicted to low-cost imported oil.

However, all of a sudden circumstances shifted. In 1973, during the Arab-Israeli war, OPEC members decided to restrict oil exports to the US, Canada, Japan, the Netherlands, and the UK. The embargo was essentially a response to the Western countries — particularly America — support for Israel during the Yom Kippur War. After Egypt and Syria launched a military campaign to regain the territories they had lost in the Six-Day War, the fourth Arab-Israeli war broke out. Once again, the US and European nations intervened to rescue Israel. This full-fledged support outraged Arab OPEC members.

The Arab oil embargo had shocking consequences. Within just a few months, oil prices quadrupled — soaring from $3 to $12 per barrel. The global economy was hit by inflationary crisis, factories across Europe and the US struggled with fuel shortages, long gas lines became a daily sight, and the concept of “dependence on Middle Eastern oil” entered Western political literature for the first time.

As a result, several European countries and Japan were compelled, at least in appearance, to distance themselves from the US foreign policy in the Middle East. The oil pressure also helped soften the aftermath of battlefield defeats during postwar negotiations, forcing the Zionist regime to withdraw from some of the occupied territories.

For OPEC member states, this was the first time they truly realized their actual power. Oil was no longer merely a commodity for sale; it had become a strategic instrument capable of shifting the global balance of power. This experience elevated OPEC’s status from an economic organization to a geopolitical actor.

However, the oil saga of the 1970s did not end there. The victory of the Islamic Revolution in Iran in 1979 delivered another shock to the market. International oil companies left Iran’s oil industry and the supply from one of OPEC key members — which at the time accounted for about 7% of global oil production — came to a halt. This pushed oil prices to over $20 per barrel by the end of the decade. Although foreign companies doubted that young Iranian professionals could run the nationalized oil industry, Iran quickly resumed production. The oil market eventually absorbed this shock and gradually stabilized.

1980s: A Test of Coherence

After the historic surge in oil prices during the 1970s, OPEC entered the 1980s with great confidence which did not last long though. The two oil shocks had already left their mark on the global economy: on the one hand, newcomer producers such as Mexico, Norway, and especially the North Sea fields had entered the market while on the other hand; Western consumers had reduced their dependence on oil through energy-saving policies and the adoption of alternative energy sources.

The outcome was clear: higher supply, lower demand, and strain on prices. OPEC tried to stabilize the market by introducing production quotas, but not all members adhered to them, and competition to retain customers kept supply levels high.

At the start of the 1980s, influenced by various factors including the Imposed War, the price of crude oil was around $35 per barrel, but by 1986, it had plummeted to nearly $10. This nearly threefold drop dealt a severe blow to the economies of oil-dependent countries. Many OPEC

member states faced budget deficit and economic turmoil, while infighting among producers intensified.

This bitter experience showed OPEC that using oil as a political tool does not come without consequences; it also proved that without internal cohesion and alignment with the market, the Organization cannot maintain its decisive role. The 1980s was, in effect, a test of maturity for OPEC, a test that came at a heavy cost.

$148 Oil and Euphoria of Revenues

Over the following two decades, OPEC entered a period of reconstruction and stabilization. By managing supply and coordinating among its members, the organization was able to keep the market relatively balanced, even as geopolitical tensions and rapidly growing global demand, especially in Asia, gradually pushed prices upward.

The year 2008 marked another turning point in the history of the oil market. The price of crude oil climbed to around $148 per barrel an unprecedented surge driven by a combination of factors: rapid growth in global demand, particularly from emerging economies, OPEC’s limited spare production capacity, geopolitical volatility in the Middle East, and rising oil production costs.

During this period, OPEC played an important role in managing the market. Even as prices hit historic highs, member countries sought to maintain relative market stability through coordinated production efforts and to prevent uncontrollable price spikes.

Despite the historic peak in oil prices, this period serves as an important reminder for OPEC: high prices never last forever, and the oil market is highly sensitive to various factors, including new supplies and emerging technologies. It could even be said that the euphoria of windfall revenues left OPEC unprepared for what lay ahead.

2010s: a New Challenger

The 2010s marked the beginning of a new era for OPEC. Just a few years after record-high oil prices, shale oil extraction technologies in the US reached maturity, and unconventional oil production surged. Once the world’s largest oil importer, the US had now become a fresh and formidable competitor for OPEC, flooding the market with millions of barrels of new oil.

The rise in shale oil supply caused prices to plummet. In 2014, oil prices fell from about $110 to below $40 per barrel and even dropped as low as $26, the lowest level in a decade. Initially, some OPEC member countries, such as Saudi Arabia, tried to maintain high production levels to drive shale producers out of the market, assuming that lower prices would make shale production economically unviable.

Although this strategy pushed some American companies toward bankruptcy, shale oil did not stop struggling. With new technologies and cost management, it managed to survive, putting OPEC under pressure through declining revenues and economic strain. Meanwhile, sanctions, wars, and economic pressures had also diminished the influence of some OPEC members, such as Venezuela and Iraq, in the oil market.

OPEC+ Emergence

The shale shock pushed OPEC to adopt a new approach through an innovative move. In 2016, the Organization formed an alliance known as OPEC+ with Russia and nine other countries, allowing them to jointly manage the market and gain leverage against shale producers.

However, the outbreak of COVID-19 in 2020 wiped out one-third of global oil demand; flights were grounded, industries shut down, and fuel consumption fell to its lowest level in decades. This situation created a severe supply glut and a dramatic collapse in prices. At one point, the US oil prices even plunged to negative $37 per barrel, thrusting the market into an unprecedented and historic crisis.

Initially, OPEC members were in disarray. Numerous meetings were held, but as members struggled to set aside their own interests for the sake of a joint goal, it ended without any outcome. It seemed the historical lessons were not enough to make them face market realities. Yet after extensive negotiations, OPEC+ ultimately asserted its decisive role in this critical situation. For the first time, the coalition members agreed on an extraordinary coordinated move: to cut daily oil production by 10 million barrels, which was an unprecedented measure in the history of the oil industry. The main goal was to prevent a total price collapse and bring some stability back to the market.

The move had a significant impact: as supply dropped, the market began to rebalance, and prices recovered from their historic lows. This crisis showed that with broad cooperation and coalition diplomacy, OPEC can maintain its key role even amid unprecedented and complicated global conditions.

OPEC in Energy Transition Era

As OPEC approaches its 65th anniversary, it continues to play a key role in the oil market alongside its new allies. However, the world is now moving rapidly toward renewable energies, which suggests that the oil market faces a challenging future.

It appears that OPEC is currently focused on finding the best way to adapt itself to the prospective conditions of the energy market. At the same time, the organization has strongly reacted to media campaigns aimed at hastening the phaseout of oil and diminishing its importance in global energy supply, calling for the prevention of distortions of energy market realities in public opinion.

In this regard, OPEC Secretary General Haitham Al Ghais has repeatedly emphasized in various media outlets that the “end of the oil era” is unattainable, and that the dominance of certain narratives about the decline of oil consumption in the future is concerning. He believes that these misleading narratives have taken on an escalating and repetitive pattern, which could lead in the future to “reduced investment,” “lower oil supply,” and “greater turmoil in the energy market.”

In addition to the “global pressure to reduce oil consumption and expand renewable energies,” OPEC faces other major challenges, such as “extreme oil price volatility driven by geopolitical crises,” “competition from new oil and gas producers outside of OPEC,” and “financial and budgetary constraints of some member states” that affect their compliance with production quotas, as well as “political and media pressure for greater transparency and accountability.” Meanwhile, “internal disputes among members over production quotas and short- and long-term strategies” can also undermine the Organization’s cohesion. Taken together, these challenges show how complex and sensitive managing the oil market is, even for such an experienced Organization.

Based on its 65 years of experience, it could be argued that OPEC has been able to maintain a balance between the interests of its members and global market developments. From using oil as a political tool in the 1970s, to countering price collapses in the 1980s, and later forming the OPEC+ alliance to manage shocks such as the COVID-19 crisis, all demonstrate the Organization’s flexibility and collective decision-making power. These experiences have proven that even in the face of rapid market changes and new energy technologies; OPEC is capable of preserving its position and playing an effective role in stabilizing the global market.

OPEC Turns 65: A Retrospective on Oil

Fereidoun Barkeshli

Senior Energy Expert 

In the early 1960s, a handful of powerful multinational companies, notoriously known as the “Seven Sisters”, cast a long shadow over the global oil landscape. They commanded vast crude oil reserves and unilaterally dictated prices, leaving the sovereign nations that owned these precious resources with precious little say and meager compensation. This undeniable exploitation galvanized the governments of Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. They recognized a stark truth: their natural wealth was being siphoned off, and only a united front could reclaim what was rightfully theirs. The call for a collective voice became not just paramount, but inevitable.

Thus, in a defining moment in 1960, these five visionary oil-producing nations converged in Baghdad, Iraq. The historic meeting was more than a mere discussion; it was the birth pangs of the Organization of the Petroleum Exporting Countries (OPEC). The founders understood that by standing together, they could wield far greater influence over oil prices and negotiate vastly improved contract terms with the dominant major companies. The establishment of the OPEC transcended simple economic rationale; it was a potent political declaration, a defiant assertion against Western hegemony and the unchecked power of the International Oil Companies (IOCs).

Navigating Turbulent Seas

The international oil markets of the 1960s were a landscape of contained volatility and burgeoning uncertainty. The world economy, still emerging from post-war reconstruction, had not yet fully awakened to the profound strategic importance and transformative power of crude oil. Public sentiment towards the major international oil companies was often one of distrust; their names and logos had, for many, become symbols of questionable dealings, from alleged coups and bribery to the shadows of bloodshed. Oil-producing nations found themselves precariously at the mercy of these powerful corporations. This inherent fragility, coupled with the geopolitical concentration of vast oil reserves in the Middle East and Latin America, only added layers of complexity to an already opaque market.

During this formative period, the OPEC founding members embarked on a crucial mission: to reclaim rightful control over their oil reserves and, crucially, their national revenues. Their primary objective was to forge a fair pricing mechanism that would genuinely benefit both the producers, who supplied the vital commodity, and the consumers, who drove global economies. Indeed, a broader awakening was sweeping through the Third World in the wake of the World War II and the dismantling of colonial empires. Early attempts by Iran to nationalize its oil industry in the 1950s, Mexico’s intention but ultimately unsuccessful bid for resource control, and Egypt’s decisive nationalization of the Suez Canal, all served as powerful precedents. These were collective statements of sovereignty, echoing the very spirit that propelled the OPEC’s formation.

Shifting Power

The relationship between oil-producing countries and the formidable IOCs was, to say the least, intricate and often contentious. The producing nations held an undeniable and justifiable belief that they were receiving an utterly inadequate share of the colossal profits generated from their invaluable oil. This deep-seated conviction fueled a rapidly growing sentiment among them: the urgent need to assert their unequivocal sovereignty over their precious oil reserves. For pioneers like Iran and Venezuela, the struggle for oil revenue was inextricably linked to national sovereignty and the pursuit of fair income. For other members within the nascent Organization, the immediate imperative was often focused on achieving demonstrably higher revenues through optimized prices and production volumes. It is a telling historical note that the State of Kuwait, a founding member, was still under British rule at the very moment the OPEC was established.

OPEC’s formation marked an undeniable turning point in these power dynamics – not only among the oil producers themselves, fostering unprecedented cooperation, but crucially, in their collective leverage against the consuming nations and the international oil companies. The Organization’s primary goal was to negotiate far more favorably with the oil companies, establishing a robust framework for cooperation among member states to effectively challenge the companies’ long-held dominance. In fact, throughout the OPEC’s foundational first decade, the OPEC conferences were laser-focused on unifying the disparate contractual frameworks that existed between the OPEC members and their foreign corporate partners.

As time progressed, the OPEC’s influence and appeal grew significantly among other oil-producing nations. Their public relations efforts, aimed at asserting their collective rights and promoting market stability, proved remarkably effective. This rising stature was reflected in its expanding membership: Qatar joined in 1961, followed by Indonesia in 1962, and Libya also in 1962. By 1975, OPEC had welcomed several more members into its fold, signifying its burgeoning global recognition and power. (Note: Please double-check these specific membership dates for accuracy. My records show different dates for Qatar, Indonesia, and Libya joining.)

Redrawing the Map

In the seminal year of 1960, when the OPEC was founded, the world consumed an average of 20.99 mb/d. The five founding members collectively produced 8.27 mb/d, commanding a significant 39.4 percent share of the global supply. By the close of that pivotal decade, the OPEC production had surged to 20.11 mb/d, while global consumption had grown to 41.70 mb/d. This remarkable expansion cemented the OPEC share at an impressive 48.2 percent – nearly half the world’s oil consumption originated from its members. This undeniably handed OPEC a powerful, almost dominant, position in the global market.

A crucial demographic shift that underpinned this growth was the United States’ transformation into a net oil importer in 1958. The country, famously fuel-hungry and predominantly consuming gasoline, became the unparalleled engine of global oil demand growth for several decades, a role it eventually ceded to China at the dawn of the 21st century.

Beyond these fundamental market shifts, geopolitics emerged as the most critical factor in driving sudden, dramatic surges in oil prices. The first such major price hike was decisively triggered by the Yom Kippur War in 1973. This fierce collision between Arab states, led by Egypt and Syria, and the Zionist Regime, proved to be a critical turning point for the international oil market and, indeed, for the OPEC itself. While the conflict initially did not directly cause the price explosion, the subsequent support for the Zionist Regime by Western governments led to a retaliatory measure: a coalition of Arab states imposed a targeted oil embargo on these supporting countries, including the United States, UK, and the Netherlands. This embargo, commencing in October 1973 and lasting until 1974, irrevocably altered the global energy

landscape.

The oil embargo sent shockwaves of havoc through major consuming countries, with the U.S. experiencing it most acutely. Infamous long queues of cars at gasoline stations became iconic, emblazoned across headlines and forever symbolizing oil as the lifeblood of modern, mobile civilization. Oil prices skyrocketed, witnessing a sharp, unprecedented rise. It is vital to underscore that OPEC, as a responsible organization, did not itself cause these shortages and price shocks. Nevertheless, the court of public opinion, heavily influenced by sensational headlines, largely laid the blame for the surging prices at OPEC’s feet.

Economic Cycles

The post-World War II era witnessed a robust economic boom across many nations, predominantly in the Western Hemisphere, fueling an insatiable demand for oil. This overwhelming surge in demand spurred oil producers to significantly increase investment and production, diligently building up capacity to meet the relentless global appetite.

However, economies are inherently cyclical. These rhythmic paradigms of boom and bust, growth and contraction, have profoundly influenced the economic performance of nations throughout the years.

Within this context, the early 1970s ushered in a troubling wave of inflation coupled with rising unemployment. This period’s economic malaise was widely, though often erroneously, attributed to the surging oil prices. This attribution was later proven fundamentally flawed when, in the mid-1980s, Western economies were once again battered by stagflation (a toxic combination of high inflation and stagnant growth) – yet this time, oil prices had plummeted to below $10 per barrel. This demonstrated that while oil prices were a factor, they were not the sole determinant of broader economic health.

As highlighted, numerous factors converged to elevate OPEC into a principal and indispensable player in the global oil market. The journey truly began with the oil embargo of the early 1970s. Prior to OPEC’s foundation in 1960 and up until 1973, fixed pricing was the undisputed rule of the market. IOCs held absolute sway over price decisions, with fluctuations rarely exceeding 40 cents for decades. When the Yom Kippur War ignited; however, oil prices had already surged by an unprecedented $3 per barrel, signaling a new era.

The resultant increase in revenues for oil producers sparked intense interest in the OPEC. With several countries having already nationalized or partially nationalized their oil production, the long-standing influence of the major IOCs waned significantly. Concurrently, the National Oil Companies (NOCs) steadily gained power and control daily.

The Organization rapidly achieved global recognition as a major force on the international energy scene. In parallel, new global players, notably hedge fund managers, brokers, and speculative traders, emerged, impacting markets and prices with increasing frequency, sometimes positively, sometimes negatively. These new financial players actively engage in hedging during market volatilities and, at times, can inadvertently or purposefully undermine OPEC’s meticulous attempts to stabilize the markets during times of crisis, by amplifying price swings.

 The 21st Century OPEC

Fast forward to the 21st century’s global economy, the OPEC found its share in global output no longer quite matching, proportionally, the immense scale of its massive proven reserves. Meanwhile, a new cohort of oil producers emerged, operating outside the OPEC’s formal membership—dubbed “non-OPEC” producers. This created a new challenge: when oil prices softened, OPEC diligently cut output to stabilize markets, but non-OPEC countries often seized the opportunity, boosting their own production. They thus gained greater market share at better prices, often at the direct expense of the OPEC’s deliberate restraint and output constraints. OPEC dedicated nearly two decades to engaging with non-OPEC nations, patiently convincing them that the global oil market urgently required a coordinated response to the profound structural shifts that had confronted the oil and energy industry since OPEC’s very inception.

The 20th century’s first major market shock occurred in the early 1970s. Five decades later, the global oil market faced another existential threat: the catastrophic arrival of COVID-19 in late 2019 and 2020. Oil demand was not just disrupted; it was virtually annihilated. Over ten million barrels per day of demand vanished overnight. The Chinese economy, which had served as the engine of demand growth for more than two decades, ground to a terrifying halt. It was simply impossible for the OPEC alone to contend with demand destruction of such unprecedented magnitude. OPEC, recognizing the dire global predicament, issued an urgent call to all producers, imploring them to come to the rescue of the global oil markets.

Russia, a major non-OPEC producer with an output of 10.7 mb/d, strategically called into the fold. It became starkly evident that without meaningful contributions from the rest of the oil-producing world, the global oil markets faced inevitable collapse.

Just as the OPEC’s initial formation and its subsequent rise to a major stakeholder status were forged in the crucible of crisis—namely, the Yom Kippur War and the oil supply sanctions against Western governments—so too was the birth of the new, expanded OPEC, now famously referred to as the OPEC alliance or OPEC+. This powerful new configuration emerged from the havoc wreaked by a deadly virus originating from China. The relentless spread of COVID-19 crashed economies worldwide, depressed oil demand to unprecedented lows, and, paradoxically, gave birth to the OPEC alliance, bringing together some twenty-two oil producers in a unified mission to stabilize the markets.

I firmly believe that OPEC+ is far more than a temporary measure conceived merely to overcome the immediate havoc of the COVID-19 crash. It represents a fundamental and permanent feature of the global oil market landscape. Within this twenty-three-country alliance, approximately eight nations currently possess significant excess production capacity. As such, the number of actual participants actively adjusting the output at any given moment may be limited. However, this is not new; OPEC has always operated in this dynamic fashion. Moreover, oil production itself is an inherently dynamic phenomenon, with countries’ output capacities continually rising and falling. The paramount factor, the enduring strength, is the alliance’s unwavering commitment to the common objective of oil market stability.

Energy Security: From Regional Vision to Global Disputes

Ameneh Mousavi

In a world where energy security is increasingly intertwined with geopolitics, technology, and political stability, Iran finds itself in a decisive position due to its massive oil and gas reserves and its strategic location. However, challenges such as international sanctions, decrepit infrastructure, and regional rivalry have complicated Iran’s path to becoming a key player in the modern energy order. Senior international relations analyst Rahman Qahramanpour tells Iran Petroleum that energy security is not merely a technical issue, as it is tied to geopolitics and regional rivalries. He said Iran should accept the rules of the global game in a bid to win a higher share of the energy market.

The following is the full text of the interview Qahramanpour gave to “Iran Petroleum”:

In your book entitled “Energy Security”, you have focused on the two key concepts of “energy security” and “energy diplomacy”. Where do these concepts stand in the current global order, and how is Iran affected by such an atmosphere?

This book was written following the 2007 and 2008 crises, coinciding with the consequences of the US war in Iraq and the Russia-Georgia conflict. Russia had advanced as close as the Baku-Tbilisi-Ceyhan pipeline to the extent of calling into question the security of this energy transmission route. After that, the issue of energy security entered the international political discourse, and various nations began developing mechanisms to counter geopolitical threats. As time passed, some incidents like the Nord Stream pipeline blast and Russia’s war on Ukraine added to the significance of this issue. Before that, many refused to accept that geopolitical crises would directly impact energy security. But today it is clear to everyone that energy security is not just a technical issue; rather, it is a security, political, and geopolitical issue. Therefore, we have to make a distinction between the two concepts of safety and security. Safety pertains to technical issues like safety of installations and pipeline pressure, but security involves politics and strategic considerations, too. For instance, in a country like Venezuela, the political establishment has directly impacted energy security. Or countries that have been integrated into the global economy are often less inclined to high-risk measures that threaten energy security.

The administration of Masoud Pezeshkian has highlighted the policy of developing diplomacy and regional convergence. Can the adoption of this policy clear the way for attracting foreign investment and upgrading regional cooperation in the energy sector?

The security structure of areas surrounding Iran, particularly in the Middle East, is either fragile or heavily dependent on transregional powers. That poses a serious obstacle to the way of expansion of energy cooperation. Under such circumstances, Iran should consider attracting investment from two different paths: one path would be to attract short-term investment that would be more attractive to countries with limited cooperation with the US, and the other would be long-term investment that has specific requirements. As long as sanctions are in effect, long-term investment would require guarantees that would be difficult to secure. But we can define joint projects with other countries that are under sanctions. It is noteworthy that long-term investment could not happen without removing legal, banking, and infrastructure obstacles.

One of Iran’s energy policies is to become the regional gas hub. But it faces tough rivals like Russia, Qatar, and Turkey. Can Iran rival these players?

Becoming a gas hub would require certain conditions. Even Turkey has not been able to stabilize such a role despite its relentless efforts. The reason is clear. Becoming an energy hub depends on ties with neighbors, interaction with big powers, and the international order’s confidence in the political stability of that country. World powers often do not allow a nation in conflict with the global order to reach such standing. A case in point is Russia, which has used energy as a political tool against the West, but now it is subject to sanctions and restrictions. As far as Iran is concerned, we should first ask ourselves whether or not the foreign policy structure of the country, its interaction with regional nations, and integration into international structures would allow us to reach such a position. In case Iran intends to become an effective energy actor, it has to embrace détente, boost transparency, and economic stability. Without that, such projects as becoming a gas hub would be limited to mere slogans.

Despite Iran’s high potential in renewables, progress has not been so much in this sector. Why?

Progress in renewables requires access to cutting-edge technologies and big investments, both of which have been hindered by sanctions. Transferring technology into Iran is faced with legal and political barriers, while purchasing equipment is difficult due to banking restrictions and secondary sanctions. However, the move towards renewable energy is a necessity, not a choice. Diversifying the energy mix, reducing dependence on fossil fuels, and participating in global energy trends are critical to the country’s economic and environmental future. Policymakers need to be bolder in this direction, leveraging domestic capacities and cooperation with countries not aligned with the West.

Given the current regional and global conditions, what should be Iran’s strategic direction in the energy sector?

In my opinion, the broad direction of Iran’s foreign policy should be to strengthen friendly relations, develop trade, and engage economically with the world. We should not forget that energy is not just a physical commodity, but also a carrier of power and a means of interaction in the global system. If we manage to use energy to enhance our position in the international order, we will have taken the right path. Within such a framework, we must distance ourselves from confrontational and isolationist policies and, by accepting the rules of the global game, seek to increase Iran’s share of the energy market, attract capital, transfer technology, and participate in international projects. Only then can Iran’s enormous oil and gas capacities be used to ensure national security and public welfare.

Hydrogen Acting as 21^st Oil

Pooneh Torabi

Replacing fossil energies with clean energy due to the undesirable impacts of fossil fuel on the environment and climate change has grown into a key global concern. The Paris climate agreement signed in 2015 by 196 countries was the first serious step in countering climate changes. The agreement marks the beginning of a global, government-led approach to mitigating climate change, limiting global warming and achieving net-zero GHG emissions by 2050.

In this regard, after signing the treaty, states and companies have started investing in hydrogen. Green hydrogen is a zero-carbon fuel produced through electrolysis. Water is fragmented into its constituent elements, i.e. hydrogen and oxygen, using renewable energies such as wind or solar to power the electrolysis process. The goal pursued by countries moving towards hydrogen is not only to take steps towards improving the environment, but also to avoid the consequences of eliminating fossil fuels, an issue that is especially true for countries with oil and gas, including the Persian Gulf states.

New Energy Order

According to the World Bank estimates, the Middle East and North Africa account for about 7% of the world’s total carbon dioxide emissions. Among them, GCC countries: Saudi Arabia, the United Arab Emirates (UAE), Kuwait, Qatar, Bahrain, and Oman, enjoy a certain situation. On the one hand, these countries are among the top 10 countries in the world in terms of per capita emissions, and on the other hand, their economies are heavily dependent on oil and gas exports, and any reduction in demand for hydrocarbons could hit their economies. For this reason, while the global competition for clean energy alternatives has intensified, the Persian Gulf countries are trying to maintain their position as the leading fuel exporters in the world. Oil and gas are the levers of power and international influence of these countries. Therefore, if the world moves towards eliminating fossil fuels, these countries must find an alternative to oil to remain on the global power map, and hydrogen can be a suitable alternative. In this way, these countries can redefine their geopolitical role from oil suppliers to hydrogen suppliers.

On the other hand, green hydrogen production requires resources such as cheap energy (solar or wind), large and cheap land, and heavy investments, all of which the Persian Gulf countries have and have a competitive advantage in the global competition to become a hub for hydrogen production and export. Taking a step in this direction can also lead to attracting capital and technology from Western countries. In the meantime, green hydrogen production relies on sources such as cheap energy (solar or wind), land, and water. Finally, since hydrogen is expected to be used in the not-so-distant future to fuel heavy transportation, heavy industry, and energy storage and intercontinental electricity transmission, countries that are leading the way in this direction can also move forward as leaders in the new energy order.

Furthermore, as global demand for hydrogen is set to increase between 2021 and 2050, clean fuels such as hydrogen are expected to replace more than 10 billion barrels of oil, or barrels of oil equivalent, by 2050. This is equivalent to at least 37 percent of global oil production. Therefore, GCC countries have defined and are implementing ambitious plans for the production and export of green hydrogen.

Hydrogen in Persian Gulf

The availability of cheap renewable energy, especially solar energy, coastlines with existing port infrastructure, and abundance of cheap vacant land; make hydrogen production in the Middle East more cost-effective than in other parts of the world. The Persian Gulf oil and gas producing countries are geographically well-positioned and close to markets in North America, Asia, and Europe. Among them, Saudi Arabia, the UAE, and Oman are three countries that are trying to establish themselves as major players in the future global clean energy market by investing heavily, developing national hydrogen strategies, and launching ambitious projects in hydrogen production and export.

Saudi Ambitions

Saudi Arabia, the world’s largest oil exporter, has in recent years sought to establish its place in the new energy order by reducing its dependence on fossil fuels and moving towards clean energy. As part of its 2030Vision, the country has embarked on developing green hydrogen and taken serious steps to become a global hub for this fuel.

Riyadh’s first symbolic move came in September 2020, when Aramco and SABIC exported 40 tonnes of aqueous ammonia to Japan for the first time. While limited, the move demonstrated Saudi Arabia’s determination to enter the global low-carbon energy chain.

The more important project, launched in July of the same year with the signing of a $5 billion contract between the American company Air Products, NEOM and ACWA Power. The project, which will be implemented in the futuristic city of NEOM, aims to produce 650 tonnes of green hydrogen per day using 4 GW of solar and wind power. This hydrogen will then be converted into green ammonia and prepared for export to global markets, especially in the transportation sector.

Saudi Arabia has a good chance of becoming a major exporter of green hydrogen, thanks to its abundant renewable resources, strong financial strength and extensive export infrastructure. However, this path is not without competition, and other countries such as Iran, the UAE and Oman are also developing similar projects.

Saudi Arabia’s entry into the green hydrogen arena can be seen as part of a geopolitical shift in the energy market, one that could turn hydrogen into the oil of the future.

UAE Ambitions

At the COP26 meeting in Glasgow in November 2021, the UAE also announced that it was working on a “hydrogen roadmap.” The UAE plans to create new value chains for the export of low-carbon hydrogen and its derivatives, as well as the production of hydrogen-based steel and jet fuel. The country currently targets 25% of the global hydrogen market and plans to produce an average of one million tons of hydrogen per year by 2030.

The state-owned Dubai Electricity and Water Company (DEWA) has also developed a green hydrogen pilot project for Expo 2020. The pilot plant will produce hydrogen using renewable solar energy, store and use it for re-electrification, transportation and other industrial uses. At Expo 2020, green hydrogen produced at Dubai’s Mohammed bin Rashid Al Maktoum Solar Park powered a fleet of fuel cell vehicles. The solar park is planned to have a generating capacity of 5 GW by 2030.

The project is part of DEWA’s strategic approach to developing hydrogen technologies in line with Dubai’s ambitious clean energy goals, based on which, 75% of energy should be supplied by renewable sources by 2050. The $14 million project is a PPP project between DEWA, Expo 2020 Dubai and Siemens of Germany. The project was put out to tender in 2018 and began construction in February 2019, and is on track to be commissioned ahead of Expo 2020. The pilot project should pave the way for large-scale hydrogen projects and allow DEWA and Siemens to refine hydrogen production to reduce the cost of the process.

Iran Eying Plans

Iran has been a major exporter of oil and gas for decades, but in a world transitioning to clean energy, this role needs to be redefined. Hydrogen

can help Iran remain a key player in the global energy market. Iran’s economy, like Persian Gulf countries, is heavily dependent on crude oil, and in such circumstances, hydrogen can provide an opportunity to diversify energy exports, develop technology, and create new industrial chains without necessarily abandoning existing oil and gas infrastructure.

Iran has great potential to become a hydrogen production and transit hub in the region, given its renewable resources, natural gas resources, cheap land, and transcontinental geographic location. Simultaneous access to Europe, Central Asia, the Indian subcontinent, and the Persian Gulf is also a strategic advantage.

Furthermore, Iran’s petrochemical, refining, pipelines and gas industry infrastructure can be used in the production and transportation of gray and blue hydrogen; therefore, Iran can enter this market at a lower cost and faster. If Iran establishes supportive and stable policies for hydrogen development, there is a possibility of attracting foreign investment and technological partnerships even from eastern countries such as China and India.

Therefore, by formulating a national hydrogen policy, Iran can clear its path in the future energy market and not fall behind the regional competition. In this regard, Mohammad Sadeq Jokar, director of Institute for International Energy Studies (IIES), emphasized the need for structural changes in the energy sector on the sidelines of the 29th Iran Oil Show. He said: Iran must formulate the energy supply document with maximum care in order to gain a suitable position in the global energy basket. Iran may still play an effective role in areas such as hydrogen, if cooperation between research and executive institutions is strengthened.

Ehsan Taqavinejad, director of OPEC, international fora and organizations affairs at the Ministry of Petroleum, laid emphasis on the significance of drawing up a national hydrogen blueprint, saying: “We have been following global trends in this area since the initial discussions on hydrogen were raised at the World Economic Forum and the World Energy Council (WEC) in 2017 and 2018. Japan’s proposal to the International Energy Agency (IEA) at the G20 summit, and the letter from the US Secretary of Energy in 2021, bold the strategic importance of hydrogen as the energy carrier of the future.”

Planning for Hydrogen

Mir- Ahmad Hosseini, head of research and technology projects at National Iranian Oil Co. (NIOC). Said NIOC embarked on planning for engagement in hydrogen as of March 2023 as part of global transition to clean energies.

“Hydrogen has become a focus of attention as a suitable alternative for energy production, storage, and use in transportation and electricity generation. In this context, a specialized working group was formed with the participation of key directorates at NIOC and two scientific arms, namely Research Institute of Petroleum Industry (RIPI) and IIES, to examine the feasibility and development path of this technology. During last calendar year (to 20 March 2025), this working group conducted a comprehensive review of four key stages, including identification, technical-economic assessment, analysis of global and regional trends, and review of the status of the hydrogen network, for 11 to 12 months of continuous activity,” he said. “As a result of these measures, a draft strategic document for the development of hydrogen technology in the oil industry was developed, which covers all stages of the value chain from hydrogen production to export. Following this path, seven research projects were defined on various topics, including the production of water hydrogen, the use of natural resources, the production of bio-hydrogen from oil and gas reservoirs, and the strategy for alternative gas energy carriers, and some of them have entered the call stage.”

Value Chain Development

The document for hydrogen value chain development in the petroleum industry was unveiled early May. This document has been prepared by IIES, taking into account global energy trends, environmental laws, energy imbalance challenges, and the lack of benefits for large industries due to late energy supply. The philosophy behind compiling this document is to identify investment opportunities and economic development platforms based on the hydrogen value chain. The document has been analyzed based on the methodology of the International Renewable Energy Agency (IRENA) and has a gradual, opportunity-oriented, and outward-looking approach. This document has also been designed with Iran’s role as an exporter and self-sufficient in hydrogen production and consumption in mind.

The development plans enshrined in the document covered three periods: short-term horizon (up to 2031), mid-term horizon (2041) and long-term horizon (2051). In this regard, development of four hydrogen production hubs have been proposed in various areas in the country, including Isfahan (energy-intensive industries), Khuzestan-Mahshahr (power plants and power supply), Assaluyeh (chemical and petrochemical industries) and Chabahar (bunkering and hydrogen exports). Optimistically, this project would yield an annual output of 4.5 million tonnes (mt) and pessimistically 1.8 mt.

Carbon-Free Future

The world is moving toward a carbon-free future, and hydrogen is at the heart of this transformation. Realizing this major shift, the oil-rich Persian Gulf states are seeking to maintain their geopolitical position through new paths, one of which is becoming the emerging hubs for hydrogen production and export. Saudi Arabia, the UAE, and Oman have developed their strategies and are practically entering the field with extensive investments.

Iran, relying on extensive capacities such as gas resources, renewable energy, industrial infrastructure, and geostrategic location, has the opportunity to transform from a traditional oil player to a future-oriented hydrogen player. The development of a document for the development of the hydrogen value chain in the oil industry is the beginning of a path that, if accompanied by political determination, strategic stability, and the attraction of domestic and foreign participation, may make Iran one of the key players in the new energy order.

The move towards hydrogen is not just a response to environmental challenges. It is also a strategic opportunity to diversify the economy, increase bargaining power in energy diplomacy, and maintain a share of the global fuel market.

Iran Builds 2^nd MOT Unit

The CEO of National Iranian Drilling Company (NIDC) has announced construction of the second mobile oil treatment (MOT) unit by using the company’s intellectual and technical expertise, as well as its available equipment and tools.

Mehran Makvandi highlighted the creativity, innovations, and initiatives of the company’s specialists and engineers in planning for construction, maintenance, and repairs, as well as in preventing interruptions in drilling operations, delivering integrated technical support services, and developing industry-specific software. He said: “The new MOT unit stands out significantly in terms of efficiency and pace of operation compared to the existing domestically built units in the country and even the first unit previously manufactured by the company.”

He explained that the first-generation domestic oil treatment units were mounted on three trailers, while the first unit built by the company was concentrated on two trailers.

“The second MOT of NIDC, however, has been assembled on a single trailer, which greatly shortens relocation, installation, commissioning, and operational startup times. As a result, it offers higher speed, efficiency, and reliability compared to other existing units,” said Makvandi.

He noted that after delivering the first MOT unit, the specialists of the Drilling Technical Services Directorate, taking into account proper market feasibility and the projected demand from clients over the coming years, designed, built, and commissioned the second unit in less than a year.

“By gathering existing equipment and tools, upgrading and improving their quality, the unit was prepared and, in its first step, was deployed in coordination with National Iranian South Oil Company (NISOC) on Wells 37 and 38 of the Lali oil field within the Masjed Soleiman Oil and Gas Production Company’s operational area for field testing. Its quantitative and qualitative performance was confirmed by the client,” he said.

“The MOT unit is used to process crude oil directly at well sites. It removes impurities such as water, salt, sediments, and associated gases from the oil before sending it to transmission pipelines or refinery processing units,” added Makvandi.

He noted that after successful field tests, the MOT unit is now being used in well repair operations in the oil-rich southern regions of Ahvaz, saying: “The MOT unit is specifically designed for processing crude oil at well sites, particularly during the early stages of production or for wells requiring maintenance and workover. By transmitting the treated crude oil to production facilities, it increases output and prevents wastage. Moreover, by reducing gas flaring at well sites, it helps prevent environmental pollution, especially in surface waters and the atmosphere.”

Makvandi stated that, in line with the Ministry of Petroleum’s policy of banning the burning of crude oil in fuel pits to meet environmental standards, MOT units have become a priority for clients.

“This unit has the capability to process up to 5,000 b/d with a pumping pressure of 800 psi, and its performance is of great importance in terms of environmental protection, preservation of company assets, and economic value,” he said.

Agreement Signed for Madar Gas Field Development 

National Iranian Oil Company (NIOC) has signed a $600 million agreement with

Mobarakeh Steel Company and Oil Industries Engineering and Construction Company (OIEC) for development of the Madar gas field.

The signing ceremony was overseen by Hamid Bovard, the CEO of NIOC.

Located 40 kilometers from the phases 15 and 16 refinery of the South Pars gas field and adjacent to the Eastern Assaluyeh, Tabnak, and Western Khayyam fields, the Madar gas field discovered in 2009 and is estimated to hold 8.8 tcf of gas in place.

Development of this field is expected to yield 65 bcm of gas plus 127 million barrels of condensate during the planned 20 years of contract.

The project includes completion of 20 wells in four clusters, construction of wellhead facilities, laying more than 100 kilometers of line and transmission pipes, and establishment of water measurement and treatment facilities.

Once fully developed, the field would supply 13 mcm/d of gas plus 40,000 b/d of condensate.

Addressing the signing ceremony, Bovard said: “After developing the Madar field, in addition to sustainable gas supply, Mobarakeh Steel Co.’s needs would be fully supplied.”

Construction of 70 km of pipeline and 33 km of refinery lines would be also part of the project, Bovard said, adding that cooperation with large industries including Mobarakeh Steel Co. is a new example of the Ministry of Petroleum’s approach with regard to partnership and enhancing energy efficiency.

Hamid Reza Araqi, chairman of OIEC, said development of the Madar field would set an example for future cooperation between the petroleum industry and large industries.

“OIEC is able to fully implement the chain of development of fields, from seismic testing to operation. Such cooperation may serve as an example for other projects,” he said.

This project is underway with the objective of maximum recovery from the field, creating jobs in the underprivileged province of Bushehr and attracting investment into the oil and gas industry.

Tehran, Moscow Set to Convene Business Meeting

Iran’s Minister of Petroleum Mohsen Paknejad announced that the achievements of the 18th meeting of the Russian-Iranian Business Council (RIBC) were being pursued, adding that arrangements are underway for holding the 19th meeting.

Following talks with Russia’s Energy Minister Sergey Tsivilyov and CEO of Gazprom Alexey Miller, Paknejad said discussions focused on advancing the outcomes of the 18th RIBC meeting, held in Moscow.

He noted that the meeting, building on recent talks between the presidents of Iran and Russia at the Shanghai Cooperation Organization (SCO) summit, reviewed necessary follow-ups to strengthen bilateral economic cooperation.

He said: “Some areas of cooperation required revision and dialogue, which were re-examined and led to concrete results.”

Separately, President Masoud Pezeshkian said there was no obstacle in the way of Tehran-Moscow cooperation and implementation of their bilateral agreements.

Expressing satisfaction with the progress of joint cooperation between the two countries, he added: |Iran is severely pursuing the implementation of agreements between the two sides, and the outcomes of expert meetings must be put into action as quickly as possible.”

 “The pattern of successful cooperation between independent countries such as Iran and Russia demonstrates that the era of unilateralism has come to an end,” he said.

Tsivilyov said: “In light of the will of the top officials of both countries, constructive cooperation has taken shape within the framework of RIBC, we are ready to swiftly implement the bilateral agreements.”

Metering System in Cheshmeh-Khosh Field

The project manager for development of the Cheshmeh-Khosh, Dalpari, and East Paydar oil fields announced that with the launch of a modern metering system at the Cheshmeh-Khosh oil field, accuracy and transparency in the oil metering is to enhance significantly.

Majid Najarian announced the commissioning of an advanced Fiscal/Financial Measurement Unit (FMU) for oil at the central processing facility of the Cheshmeh-Khosh field in cooperation with the Russian firm ZN Vostok and an Iranian contractor.

 He noted that the FMU system has been launched for the first time at the Cheshmeh-Khosh field and, fully aligned with international standards (API, OIML, and AGA), enables precise metering at the custody transfer level.

He explained that the system, using high-precision oil flow metering equipment, PLC and SCADA systems, and automatic temperature and operational condition compensation technology, ensures an accuracy with an error margin of ±0.15% over a volumetric range of 60 to 750 cubic meters per hour (equivalent to 9,000 to 113,000 b/d) for each of the three turbine flow meters, with a total capacity of up to 270,000 b/d.

He added that the system operates reliably at pressures of up to 80 Bar and temperatures ranging from 5 to 80 degrees Celsius.

“Among the key advantages of this automated unit are the reduction of commercial disputes, faster managerial decision-making, higher reliability compared to traditional methods, and creation of a data-driven infrastructure for long-term efficiency,” said Najjarian.

Noting that this system paves the way for digital transformation in oil fields, he said: “The project has been implemented within the broader policies of the petroleum industry regarding data governance and accuracy in calculating the volume of crude supplied to downstream industries, as one of the main national resources.”

Petchem Output at Satisfactory Levels

The head of production control at National Petrochemical Company (NPC) has described the petrochemical industry’s output in 2025 as acceptable despite the occurrence of a 12-Day War.

Saeed Baghbani also highlighted field development, gas flaring reduction, and investment in gas consumption reduction projects as key strategies to ensure a stable feedstock supply to the petrochemical industry.

“Since the beginning of the current calendar year, around 32 mt of products has been manufactured in the petrochemical industry, generating $5.5 billion in foreign currency revenues. Based on the 19 projects scheduled for commissioning this year, six of which have already been completed, the petrochemical industry’s production capacity will exceed 100 mt,” he said.

Baghbani also touched on the 22% empty capacity of petrochemical production, saying: “About 22 mt of the petrochemical industry’s installed capacity went unused in 2024, with nearly 70% of that due to feedstock shortages. If the industry can resolve the feedstock supply issue, it will be able to utilize a significant portion of its idle capacity. In addition, addressing equipment and process challenges, along with ensuring production stability, will also play an important role in activating the effective production capacity.”

He said participation in upstream field development, flare gas capture, and fuel conservation are among the key solutions to address the petrochemical industry’s feedstock supply challenges.

“Regarding the involvement of petrochemical companies in upstream field development, contracts have been signed by Bakhtar Petrochemical Plant and Petro Farhang Petrochemical Plant for upstream projects and will be finalized soon. For flare gas capture, notable efforts are also underway by petrochemical companies. For example, Persian Gulf Bidboland Gas Refining Co. has captured 94 mcf/d of flare gas in its first phase,” he said.

Referring to petrochemical companies’ contribution to saving on gas consumption, Baghbani said: “Last calendar year, the Energy Efficiency Unit of NPC used revenue from awareness campaigns and relied on a 10% energy consumption reduction initiative to replace higher-quality equipment in certain regions of the country. These measures led to lower consumption and, consequently, increased production at the Zagros and Pardis petrochemical plants.”

“Special bonds have also been issued for participation in the 10% consumption reduction campaign. If petrochemical companies invest in these projects, they will be able to secure a significant share of their gas feedstock and utilize it during times of restrictions,” he said.

He said that gas was being distributed at low prices, adding: “The highest fuel price in the country is applied to petrochemical feedstock, yet petrochemical companies can, through corrective measures in areas where gas is priced lower, obtain feedstock at a reduced cost.”

Touching on NPC’s plans for sustainable production by gas-fed petrochemical plants during the winter in light of energy imbalance, he said: “One of the programs is the implementation of the 10% energy consumption reduction initiative. In addition, negotiations have been held to revise the approach to gas supply during the winter, which could have a significant impact on addressing winter feedstock shortages.”

Jofair Heavy Crude Output Doubles

The project manager for development of the Sepehr and Jofair fields, Abbas Goudarzi Arjomand, said with the installation of sucker rod pumps (SRPs) at Jofair and the ensuing twofold increase in well production, the use of this technology in heavy oil recovery has been put into operation.

He said efficiency of these pumps, following the trial phase, increased well production by more than 100% compared to the natural output, adding: “The main application of this technology is in low-yield wells, where it can be instrumental in enhancing production sustainability. However, in cases where the reservoir’s capacity and productivity exceed the target range of SRPs, the installation of ESPs (Electric Submersible Pumps) is also planned.”

“The application of SRPs in the Jofair field, in addition to boosting daily production, also contributes to advancing technical expertise and localizing advanced technologies, paving the way for sustainable development in the West Karun oil fields,” Goudarzi said.

SRPs are among the most widely used artificial lift technologies in the petroleum industry. By utilizing a rod mechanism and downhole pump, they enable the economic production of low-pressure and low-yield wells. This technology has a long-standing history in many of the world’s oil fields and, due to its reliability and favorable operating costs, has consistently played a key role in enhancing recovery.

With the installation of the third SRP in the Jofair oil field and stabilization of well production, use of this technology for recovery of heavy oil from the Bangestan formation in the Sepehr and Jofair fields has reached a relative stage of maturity.

Mobile Desalter Pre-Commissioned 

The project manager for development of the Cheshmeh-Khosh, Dalpari, and East Paydar oil fields, Majid Najjarian, said that pre-commissioning of the first mobile desalter in Iran’s petroleum industry had begun.

He said it would open a new path for increasing production capacity and facilitating the processing of saline crude in Iranian oil fields.

“The unit, developed with domestic capabilities and the expertise of Iranian specialists, reached pilot operation in a short time. Plans are also in place for next calendar year to fully localize its manufacturing technology in cooperation with science-based companies,” he added.

He said: “The installation and quality testing of this unit were completed within one month in full compliance with technical and safety standards, recording over 28,500 safe working hours and concluding without any accidents.”

He explained that thanks to its mobility and rapid deployment, the mobile facility performs desalting and separation of water from crude oil before transfer to the main facilities, playing a key role in enhancing efficiency and accelerating production.

He added that the purpose of launching the unit is to facilitate the processing of saline crude and an increase of about 30,000 b/d in oil production capacity in these fields.

Najjarian stressed that operation of the mobile desalter skid accelerates operation of new wells and enables optimal management of saline crude. “After completion of the 110,000-b/d Cheshmeh-Khosh desalting plant, the unit can be relocated to other fields at the discretion of NIOC, preventing time loss and productivity decline.,” he said.

Najjarian said the economic advantage with such units was that maximum output would be achieved by making minimum cost.

“The pace of installation and flexibility of these facilities, particularly in joint oil fields, represent a strategic solution, and the commissioning of the first mobile desalting unit marks a new phase of flexible and targeted operations in Iran’s national oil industry. The technology, while optimizing processing structures, provides the ability to adapt to changing operational conditions and represents an effective step toward sustainable production growth, especially in border fields,” he said.

SP Refinery Target Met 96%

The manager of the 8^th refinery of South Pars Gas Complex (SPGC), Hadi Chabouk, said by successfully carrying out major overhauls, key projects, and efficiency improvements, the facility achieved more than 96% of its operational plans during the first half of the current calendar year.

Chabouk noted that the current calendar year’s overhaul had carried out with precise planning and an early start, bringing significant achievements in production and operational stability.

“Key measures carried out at the complex included the installation of the core of a gas export turbine, replacement of catalyst beds in gas treatment trains, reconstruction and optimization of furnaces, substitution of decrepit heat exchangers with domestically manufactured units, and specialized maintenance of critical equipment such as control valves, pumps, and high-voltage electrical systems,” he said.

Installation of the core of the gas export turbine was carried out to ensure the stability of the transmission process, while the replacement of catalyst beds has contributed to improving the quality of the treatment process. Furthermore, reconstruction of furnaces and replacement of decrepit heat exchangers has enabled continuous production at higher efficiency.

Chabouk said: “In the power supply section, the replacement of faulty cables and specialized testing of transformers significantly improved the safety of the electricity network.”

Regarding measures to enhance domestic potential, he said: “The manufacturing and testing of mechanical equipment were carried out using domestic capacities. In addition, a project to connect the AGE section to the sulfur recovery unit was undertaken with the aim of reducing flaring and enhancing operational availability.”

Implementation of this project will allow part of the flare gases to be directed to the recovery unit, thereby preventing energy loss while also enhancing the unit’s operability.

Chabouk also said that reduced dependence on foreign supply, progress in the project for selling flare gas and 12 reforming projects were among other achievements of the 8^th refinery during the first half of the current calendar year.

Sustainable Fuel Supply to Central and Northern Iran

The project manager of the Rafsanjan-Yazd pipeline, Hamid Reza Yadollahi, has said the project has had 70% physical progress.

 He noted that the Rafsanjan-Yazd products transfer line, with a capacity of 115,000 b/d, is one of the petroleum industry’s priority projects under the 14th administration and is regarded as a lasting initiative for ensuring the country’s stable fuel supply.

He said: “The pipeline is part of the Bandar Abbas-Rafsanjan-Yazd-Naein-Rey project. Stretching 228 kilometers along the 26-inch Bandar Abbas-Rafsanjan line, it is being implemented to enhance the transmission capacity of products from the Bandar Abbas and Persian Gulf Star refineries to central and northern regions of the country, while reducing reliance on road transportation.”

He noted that with the implementation of this pipeline, around 115,000 b/d of petroleum products will be transferred—equivalent to replacing the road transport of more than 600 trucks.

“Fuel transportation by trucks not only entails high costs but also carries significant security and environmental risks. With the pipeline in operation, more than IRR 80 trillion in direct savings from reduced fleet fuel consumption and IRR 70 trillion from preventing fuel evaporation will be achieved annually, ensuring the project’s reimbursement period is just three years,” added Yadollahi.

Regarding the construction of the project, he said: “Construction work began in October 2023 and has so far achieved 70% physical progress. Subject to the provision of financial resources, the entire project is scheduled to be commissioned by June 2026. The total cost of the project, updated and approved by the Economic Council, is estimated at IRR 52 trillion. For pipeline supply, two domestic companies—Petro Sanat Alborz and Safa—undertook 100% of the project’s requirements, with all pipes manufactured and supplied using domestic capacity.”

Yadollahi emphasized that this project has directly created jobs for more than 300 persons on construction sites, 50 persons in contractor offices, and dozens more in pipe manufacturing plants and consulting sectors.

He noted that throughout the project’s implementation, the whole environmental and defense-related considerations were reviewed by specialized consultants, with the necessary reports submitted to the Department of Environment (DOE).

Polour-Vana Gas Pipeline Operational

The 16-inch Polour-Vana feed pipeline, stretching 22 kilometers and traversing challenging geographical terrain, has commissioned to strengthen the gas network in the northern Iran.

Behnam Mirzaei, the CEO of Iranian Gas Engineering and Development Co. (IGEDC), said at the inauguration ceremony: “The project was completed despite geographical and climate challenges, including crossing the busy Haraz road, mountainous areas, landslide-prone zones, and rivers along the route. Its implementation has strengthened the northern gas network and enhanced social welfare for local residents.”

He noted that the pipeline would serve as new infrastructure for Mazandaran Province Gas Company, adding that the project would not have been possible without the support of provincial authorities and the company itself.

Mirzaei said National Iranian Gas Co. (NIGC) was in charge of clean energy development in Iran, adding: “Through the construction of high-pressure transmission lines, gas compressor stations, and refinery expansions, this company is providing the necessary infrastructure to fulfill this mission.”

Referring to the underground gas storage projects, he said: “The second phase of   the gas storage projects in Shourijeh and Sarajeh is underway to manage peak shaving, with the Sarajeh project set to be commissioned by the end of the current calendar year [20 March 2026]. Moreover, for the first time in the country, a gas storage project is being implemented in the salt domes of Nasrabad, Kashan.”

He announced the implementation of the “National Gas Metering Project”, noting that under this initiative, consumption levels at production, consumption, and export points will be precisely monitored.

Mirzaei said 923 km of pipeline was underway in the current calendar year, including the Palizan-Paskuh-Suran-Zaboli and the Ahvaz-Kuhdasht pipelines.

He stated that two gas transmission projects—“Chelvand–Ardabil” and “Nur–Kelarabad”—along with the commissioning of eight gas compressor stations, is to launch this year. He noted that all these infrastructures serve the growth of the country’s leading industry.

No Barrier in Tehran-Moscow Cooperation

President Masoud Pezeshkian has said the model of successful cooperation between independent countries such as Iran and Russia will prove that the era of unilateralism has come to an end.

“There are no obstacles to Tehran-Moscow cooperation or the implementation of bilateral agreements,” he said in a meeting with visiting Russian Energy Minister Sergey Tsivilyov.

President Pezeshkian expressed satisfaction with the course of Iran-Russia cooperation and the commitment of the officials from both countries to implement bilateral agreements in the fields of transportation, energy, and power generation, saying Iran is seriously pursuing the execution of these agreements and that all necessary frameworks for cooperation are in place.

He stressed that the outcomes of expert-level meetings following high-level agreements between the two countries must be put into practice as quickly as possible.

Highlighting Iran’s determination and President Vladimir Putin’s firm will to implement bilateral agreements, he added that it is now up to ministers and expert teams to accelerate and complete the process with serious commitment and greater effort.

Pezeshkian gave an optimistic assessment of the ongoing exchanges and diplomatic visits aimed at growing ties between the friendly and allied nations of Iran and Russia. He stressed that independent countries such as Iran and Russia can achieve growth and progress without reliance on unilateral powers.

For his part, Tsivilyov presented a report on his visit to Iran and his meetings, saying: “Fortunately, thanks the determination and will of the senior officials of both countries, constructive cooperation has taken shape within the framework of the Russian-Iranian Business Council (RIBC), and the relevant authorities remain in constant contact to ensure the implementation of the agreements.”

He offered his gratitude to the Iranian president for his endeavor in implementing agreements particularly in the transport, energy and power plant sector, saying: “We are ready to swiftly put the agreements into action, and in this regard, no obstacle, pressure, or sanction can disrupt or delay the course of trade and economic cooperation between the two countries.”

$3.5bn Invested in Tehran Refinery Upgrading 

Tehran’s oil refinery is among the oldest and leading oil refining facilities in Iran. It is instrumental in producing vital fuels like gasoline, gasoil and jet fuel. With a refining capacity of 250,000 b/d of crude oil and enjoying a strategic location near Tehran, the facility has a major share in national energy supply. Upgrading the quality of petroleum products has been a priority of the Ministry of Petroleum under the 14^th administration. That would require upgrading the refinery. To that end, the Tehran refinery took the first step by considering a $3.5 billion project. Mohsen Siahpush, chief engineer at the Tehran oil refinery, has said that upgrading the refinery would make all products Euro-5 grade. That would push the Tehran refinery to turn into a petrochemical refinery. Siahpush said the project could play a determining role in the future of energy industry in Iran. He also said that the continuous catalytic reforming (CCR) project to upgrade the quality of gasoline at the facility would be completed by June 2026, which would add 1.5 ml/d to the refinery’s gasoline production capacity.

Euro-5 Gasoline

Siahpush said the CCR unit would bring the gasoline quality to Euro-5 grade at the Tehran refinery. The CCR project is aimed at overcoming imbalance in the gasoline production and consumption. It has been formulated based on the necessity to upgrade the quality of gasoline supply by the Tehran oil refinery and in compliance with Euro-5 standards.

Referring to other projects at the Tehran oil refinery, he said: “One key project in the quantitative and qualitative upgrading of gasoline production would be to establish a new unit for separating heavy and light naphtha. By improving the quality of feedstock at the isomerization units and catalytic conversion, octane and yield would increase at two catalytic units, which would directly increase gasoline production by 500,000 l/d.”

He said that construction of a hexane solvent production unit with a feedstock capacity of 2,000 b/d was being finalized. Hexane is widely used in industries, mainly in chemical and painting, paper making, pharmaceutical, cosmetics and healthcare, tire making and glue industries. This unit is expected to come online by next March. 

Gasoil Production

Siahpush said the Tehran refinery has been supplying Euro-5 gasoil for years, adding that the jet fuel supplied by this facility was of high quality in terms of quality and volume when compared with other refineries in the country.

Gasoil is largely used in the transportation sector and power plants among other sectors. It is the main fuel in heavy transport. In the meantime, gasoil is used to keep power plants running when power consumption peaks. Therefore, this refined product is highly significant.

During the recently-held Oil Show in Tehran, Tehran Oil Refining Co. (TORC) signed an agreement to purchase cold filter plugging point (CFPP). CFPP is the lowest temperature, expressed in degrees Celsius, at which a given volume of diesel type of fuel still passes through a standardized filtration device in a specified time when cooled under certain conditions. This test gives an estimate for the lowest temperature that a fuel will give trouble free flow in certain fuel systems. This is important as in cold temperate countries, a high cold filter plugging point will clog up vehicle engines more easily.

“Gasoil naturally holds big amounts of paraffin that tends to crystalize and form solid structures at low temperatures. That would result in reducing fuel efficiency, filter blockage and disruption in diesel engine operation,” said Siahpush. “As the minimum temperature reported in Tehran is -18 degrees Celsius with CFPP of Euro-grade gasoil in the range of -6 to 0 degrees Celsius, quality contradiction is reported mainly in cold seasons.”

“The determined amount of CFPP is expected to be -12 in cold seasons and -5 in hot seasons at most. Therefore, CFPP works as an improver to help diesel engines run better at low temperatures,” he said, adding that the CFPP agreement would be a key step in favor of local production of this additive and upgrading production standards and optimizing the performance of refineries in using diesel fuel.

High Return

Siahpush referred to the amount of investment needed for refining residues and upgrading the value-added of fuel oil at the Tehran refinery, saying: “Basic studies have been conducted for this project with an estimated $3.5 billion in investment needed. The project would have a good rate of return on investment. In addition to governing products, high-value products like propylene and low-sulfur shipping fuel would be produced.”

Regarding application of modern technologies in this project, he said: “The Research Institute of Petroleum Industry (RIPI) would be with us. We can benefit from local capacities in removing asphalt with solvents and other necessary technologies.”

“The economic feasibility studies have been conducted and the first phase including fuel oil refining and establishment of off-site units has been carried out. We are in the process of receiving technical knowhow and signing agreements.”

Downstream Chain

Siahpush said the Tehran refinery holds 51.32% of the Shazand Petrochemical Plant, adding: “The Tehran refinery is somehow a petrochemical refinery because it holds majority shares in the Shazand Petrochemical Plant and it frequently supplies its feedstock.” 

That has occurred upon consent of the Board of Directors of TORC for the purpose of vertical development and completion of the value chain of refined products, preventing crude sales with an approach to petrochemical refining and supply of higher-value products.

With a refining capacity of 250,000 b/d, the Tehran oil refinery holds a 14% share in national oil processing capacity. It enjoys a strategic position in supplying energy to central, northern and northeastern Iran. By supplying about 7 ml/d of gasoline and 14 ml/d of gasoil, the facility is key in fuel security. Implementing such big projects as the CCR unit, developing Euro-6 gasoil production, building oil and gas separation units and hexane production, on top of the fuel oil quality upgrading with $3.5 billion investment; would place this refinery on track to become a sophisticated and lucrative petrochemical refinery, an objective which is being realized by reliance on local capabilities, technological innovations and development-oriented approach.

Iran Gas Storage Capacity Up 300%

Iran holds the world’s second-largest natural gas reserves. Over the past four decades, Iran’s gas distribution network has expanded significantly, to the point where more than 75% of the country’s energy mix relies on this source. With the expansion of the consumption network and the need to supply gas during the cold season, gas storage took on added significance in the 2000s.

The Ministry of Petroleum pursued implementation of underground gas storage projects, and in 2009, the first gas storage site in Iran and the Middle East inaugurated in the Sarajeh field near Qom. Now, 16 years on, Iran’s underground gas storage capacity has reached 3.5 bcm.

The CEO of Iran Gas Engineering and Development co. (IGEDC) Behnam Mirzaei has told “Iran Petroleum” the figure would reach 6.2 bcm by 2027, noting that 100 mcm/d could be drawn on the facility.

Sarajeh and Shourijeh

The main projects underway by IGEC include Iran Gas Trunkline-9 (IGAT-9), the second phases of the Sarajeh and Shourijeh storage facilities, each playing a vital role in strengthening the country’s gas transmission and storage network.

With a length of 400 kilometers, IGAT-9 is under construction in four 100-km sections stretching from Khorramabad to Kuhdasht. Two sections have had 92% progress, while the other two are about 80% complete.

Mirzaei said that Sarajeh in Qom and Shourijeh-D in the Khangiran field in Khorasan Razavi Province are among the prioritized gas storage projects in Iran. He added that these two storage facilities would ease the burden on the national gas transmission network in coming years.

Sarajeh is the first gas field in Iran to have been converted into a storage facility. With an initial capacity of 1 bcm in its first phase, it is now undergoing its second phase of development, which will add another 0.5 bcm, bringing its total capacity to 1.5 bcm. The withdrawal rate will also increase from 10 mcm/d to 15 mcm/d.

Shourijeh D, located near northeastern borders, holds particular importance due to the size of its reservoir and its proximity to major gas transmission routes. In its first phase, the field has a capacity of 2.25 bcm, and with the implementation of the second phase, its capacity will reach 4.5 bcm, while its withdrawal rate will rise to 40 mcm/d.

“Sarajeh and Shourijeh are not merely projects to enhance storage capacity, but also they serve as strategic support for managing seasonal crises. With development of these two facilities, potential challenges in the gas transmission network across the northern and central areas of the country will be overcome,” said Mirzaei.

Fateful Year

IGEDC planning indicates that national underground gas storage is set to experience a new era by next March. In Sarajeh, the second phase of the development project is being completed in both the upstream and downstream sections. This means that both the infrastructure for gas injection into the reservoir, as well as withdrawal and processing units are being upgraded.

Referring to Shourijeh-D, Mirzaei said: “Our forecast is that by the end of the current calendar year [20March 2026], the project will reach around 70% physical progress. However, achieving this goal depends on financing. If the required resources are provided to the investor through National Development Fund of Iran (NDFI), we will be able to complete the project and put it into operation within 18 months from the time the funds are allocated.”

Therefore, the current calendar year would be central to storage facilities. In addition to upgrading Sarajeh and Shourijeh, development of the Nasrabad project in Kashan and Sarkhoon in Bandar Abbas would be facilitated.

Energy Security

IGEDC data indicate that with the implementation of ongoing projects, the country’s underground gas storage capacity will increase significantly over the next two years. At present, the total storage capacity is estimated at around 3.5 bcm, but with the completion of the development phases of Sarajeh and Shourijeh and the operation of new projects, this figure will reach about 6.2 bcm, a nearly threefold increase.

Alongside the Sarajeh and Shourijeh projects, new projects currently under development are also of special importance. These include the Nasrabad salt dome in Kashan and the Sarkhoon field in the south. According to IGEDC projections, the Nasrabad salt dome will provide 500 mcm of storage capacity with a withdrawal rate of 8 mcm/d. The southern Sarkhoon field will also enter operation with 1.5 bcm of storage capacity and a withdrawal rate of 10 mcm/d. In addition, the third phase of Shourijeh D development will once again increase the reservoir’s capacity by 2.25 bcm and boost its withdrawal by an additional 20 mcm/d.

Moreover, projects have been defined in the Shourijeh B reservoir, the Nar field, and the Pazanan field, which will add 1 bcm, 1.1 bcm, and 2.2 bcm, respectively, to the country’s underground storage capacity. The total withdrawal from these projects is estimated at more than 37 mcm/d.

With the completion of the second phases of Sarajeh and Shourijeh, along with the Nasrabad project, the country’s storage capacity will rise from the current 3.5 bcm to around 6.2 bcm. According to the scheduled plans, this capacity will become available during 2026-2027. In addition to increasing the withdrawal capacity to over 100 mcm/d, this expansion will strengthen the reliability of the domestic network and enhance Iran’s position in the region.

Digital Transformation

One of the main pillars of the gas industry development in Iran is the move toward digital transformation. By formulating a Digital Transformation and Artificial Intelligence Implementation Roadmap, IGEDC has sought to shift traditional processes toward smart management.

Mirzaei said the roadmap consists of four stages: identifying needs and priorities, developing infrastructure and organizational capacity, implementing pilots, and ultimately scaling up and generalizing the solutions. The first phase, which involved analyzing key processes and identifying areas suitable for the application of artificial intelligence, has been completed. The company has now entered the second phase, which includes the development of systems such as Project Management Information System (PMIS), Geographic Information System (GIS), Business Process Management System (BPMS), and the Integrated Gas Monitoring system (IGM).

Regarding the significance of this transformation, he said: “Standardizing data and developing a data governance framework based on the global models help us make more accurate decisions. International frameworks such as ISO 55001 for asset management and ISO 19650 for building information modeling form the foundation of this transformation.”

The practical applications of AI in this field are extensive, from predicting project delays and optimizing resource allocation to preventive risk management and reducing human errors in documentation. In the meantime, new technologies such as horizontal drilling, micro tunneling, and drone-based surveying equipped with LIDAR, and even the use of cable cranes in mountainous areas have been incorporated into the agenda to ensure the project implementation with minimum cost and maximum safety.

Domestic Manufacturing

One of the most important pillars of underground gas storage development in Iran is reliance on domestic capabilities. Numerous successful experiences have been recorded in this field. In the 2000s, a project to transfer technology for manufacturing large-size valves was launched in cooperation with foreign companies. Within five years, the project bore fruit; and today domestic manufacturers have the capability to produce 56-inch valves.

Mirzaei said: “Turbocompressors, regarded as the heart of gas compressor stations, are another example of these achievements. Today, two domestic companies—MAPNA and OTC—manufacture these sophisticated pieces of equipment, a breakthrough that has eliminated the need for imports and, under sanctions, serves as a reliable backbone for the country’s gas industry.”

In addition, IGEDC has taken significant steps to support domestic manufacturing by empowering local companies in the fields of electricity, instrumentation, and coating. Developing quality control documents and requiring contractors to use standardized Iranian equipment have been part of this policy. The projects for manufacturing 56-inch hot bends and digital radiography machines have also been defined under the “First-Time Manufacturing” law and are now in their final stages.

Reliable Market

The Iranian gas market has been always attractive to investors due to the vast scale of domestic consumption and the need for infrastructure development. What strengthens this appeal today is the industrial foundation and the capacity for equipment maintenance within the country. With the world’s second-largest natural gas reserves, a transmission network of more than 40,000 kilometers of nationwide pipelines, and a transmission capacity of over 950 mcm/d, Iran has established a remarkable infrastructure in the region—one that provides a reliable foundation for long-term investments.

Mirzaei said: “When an investor enters Iran, they clearly see that they are not dealing with a country that merely utilizes technology. We have the capability to operate, maintain, and upgrade equipment, and that significantly reduces investment risk.”

He emphasized that the combination of a large market capacity, strict technical standards, and the successful track record of domestic projects presents a clear picture of Iran as a secure and long-term market for investment.

Mirzaei said combination of storage projects, digital transformation, and extensive reliance on domestic capabilities, paints a bright outlook for the future of Iran’s gas industry. In the coming years, the country’s underground gas storage capacity will multiply, and its daily withdrawal capability will increase significantly. These developments will not only ensure national energy security but also enhance Iran’s position in the regional gas market.

“Our goal is to make gas storage a stable pillar of the country’s energy security through targeted investment, cutting edge technologies, and reliance on domestic capabilities. The future of this industry will be secure and honorable,” Mirzaei said.

Deepwater and Semi-Deepwater Drilling

Ali Khaksar

Drilling Mud and Cement Design Expert,

NIOC Directorate of Exploration

Deepwater and offshore drilling constitutes one of the most sophisticated and challenging processes in the oil and gas industry. The Caspian Sea and the Persian Gulf are two key oil-rich areas where drilling operations face various problems and conditions.

This article offers a general review of deepwater drilling before focusing specifically on the challenges faced by drilling in the Caspian Sea and Persian Gulf. Applicable technologies as well as solutions have been presented.

Introduction

Deepwater drilling refers to extracting hydrocarbon deposits from seabed more than 500 meters deep. Such process requires high-end equipment, technically sophisticated savvy and risk management. Sitting atop rich reserves in the Persian Gulf and the Caspian Sea, Iran is trying to exploit these massive resources. However, the different geological and environmental conditions of these two zones render drilling a challenging activity. Imagine a floating massive rig on waves in the heart of sea with engineers trying to extract oil and gas. Such operations, particularly in the Persian Gulf and the Caspian Sea, are not only a technical challenge, but also an economic and strategic necessity. As some onshore oil fields mature, development of drilling in these areas becomes a priority.

What challenges are in the way of development of this industry? How can Iran bolster drilling safety and output by using modern technologies? Why is drilling in deep and semi-deep waters important for Iran?

Economic and Strategic Significance

Iran owns the second largest gas and the fourth largest oil reserves in the world. It now needs to develop its new fields. Most accessible onshore reservoirs have peaked their production and deepwater drilling can offer new resources for national energy supply.

Meantime, rivalry with neighboring nations like Qatar, Saudi Arabia and Azerbaijan in developing joint fields has pushed Iran towards more advanced technologies for drilling in these zones. The giant South Pars gas field, owned jointly by Iran and Qatar, is a case in point. Iran is striving to preserve its share of the offshore reservoir.

Job Creation

Investment in offshore drilling can help associated industries grow. That varies from building drilling platforms to subsea equipment and well pressure control technologies. In addition to increasing oil and gas production, that can create jobs and boost the economy in coastal areas.

Caspian Sea Drilling

Geological Features and Drilling Challenges: Known as the largest landlocked lake in the world, the Caspian Sea has massive oil and gas reserves, which have been developed in Azerbaijan, Kazakhstan and Turkmenistan. The Iranian sector of this sea holds significant hydrocarbon reserves. However, drilling in the Caspian Sea has faced numerous technical challenges due to sophisticated geological conditions, high pressure and unstable seabed. The Caspian Sea is deep more than 1,000 meters in some parts, making drilling tougher. One of the key oil fields in the Caspian Sea is Sardar-e-Jangal, which is rich in oil and gas but it requires cutting-edge technology and precise risk management.

Water Depth: The water is deep more than 1,000 meters in some areas, requiring specific drilling equipment like semi-submersible rigs.

Harsh Climate: Strong winds, waterflows and tough cold in fall and winter make drilling operations difficult.

Sophisticated Geology: The geological layers in this zone have varying pressure along with trapped gas and unstable sediments that toughen control of the well.

Insufficient Infrastructure: Compared with the Persian Gulf, the Caspian Sea has more limited drilling and logistical infrastructure, which would increase drilling costs and time.

Technologies in Caspian Sea Drilling

To overcome aforesaid challenges, modern technologies are used:

Drillship to carry out drilling in big depths;

Managed pressure drilling (MPD) for controlling unexpected pressure;

Drilling mud with variable special weight to facilitate pressure balance;

Real-time data monitoring (RTDM) to forecast possible problems during drilling.

Offshore Drilling in the Persian Gulf

Geological Features and Drilling Challenges

The Persian Gulf is one of the most important oil-rich zones in the world. Iran, Saudi Arabia, Qatar and Kuwait own massive oil and gas fields in this area. Despite being shallower than the Caspian Sea, the Persian Gulf is grappling with geologically specific challenges in offshore drilling. The presence of salt formations and subsurface fractures may keep drilling pipes stuck and add to operational expenses. Furthermore, proximity of these fields to shores increases environmental concerns and underlines the need for more controlling measures in the course of drilling.

Unstable Sediments and Formational Pressure: Most Persian Gulf reservoirs lie in the lime and dolomite layers with natural fractures and varying pressure.

High Temperature and Equipment Corrosion: Salty water and environmental conditions bring about serous corrosion in the drilling equipment.

H2S: Many fields contain sour gas, requiring systems to control toxic gas for the safety of drilling and protection of service workers.

Maritime Navigation: Maritime navigation in the Persian Gulf is heavy, making management of drilling operations difficult.

Technologies Used in Persian Gulf Drilling

In order to overcome foregoing challenges in the Persian Gulf, the following technologies are used:

Jack-up Rigs: These rigs are suitable for shallow waters with the capacity to drill as deep as 100 meters.

Directional and Horizontal Drilling Technology: It is used for access to complicated reservoirs and increasing output.

Drilling Fluid Refining: It is used to control corrosion and reduce environmental impacts of drilling.

Smart Corrosion Monitoring Sensors: These sensors are used to increase the lifetime of drilling equipment.

Key Drilling Projects

Sardar-e-Jangal (Caspian Sea)

This field is deep 700 meters and represents one of the major deepwater drilling projects in Iran. Drilling operations in this field face numerous challenges like high pressure and unstable seabed.

South Pars (Persian Gulf)

It is the largest gas field in the world, which Iran and Qatar share. Drilling started in this field in the 1990s and has been continuing. Horizontal drilling and MPD technologies have been used in this field.

Farzad Oil Field (Persian Gulf)

Iran shares this field with Saudi Arabia. Drilling there is both politically and economically significant.

Environmental Challenges in Offshore Drilling

Drilling in both areas has significant environmental impacts:

Oil Contamination: Oil spill from drilling wells may inflict irreparable damage on marine ecosystems. 

Noise Pollution: Negative impacts on marine life like dolphins and whales.

Drilling Waste Management: Drilling cuttings and fluids contain heavy metal that require special management.

Proposed Solutions

Using advanced refining systems to reduce pollution

Development of mud-free drilling technologies (UBD and MPD)

Regular monitoring of water quality around drilling zones

19^th Iran Plast

Iran Exhibits Petchem Capabilities Under Sanctions

The 19th edition of “Iran Plast” international exhibition opened 8 September 2025, with the participation of domestic and foreign companies, business delegations, and a number of deputy petroleum ministers. Despite international sanctions in effect against Iran, the Tehran International Permanent Fairgrounds, hosted the event, which is one of the most important in the plastics and petrochemical industry in the Middle East. “Iran Plast” has won recognition as the most prestigious exhibition in West Asia.

Hassan Abbaszadeh, the CEO of National Petrochemical Co. (NPC), said: “There were those who proposed even the exhibition to be put off or cancelled, but we were determined to go ahead with this key event”. Based on such vision, “Iran Plast” hosted petrochemical actors, presenting a strategic opportunity for interaction between domestic and foreign companies, exchange of technical savvy and attracting investment in the polymer and plastic sector.

Among the officials present in the inauguration were deputy ministers, MPs, Iran’s ambassador to Russia, public and private sector managers, and foreign businesspersons among others.

In this edition, the exhibition hosted more than 700 domestic companies and 67 foreign companies, as well as 200 individuals in the form of business delegations from 18 countries: Russia, China, Turkey, Republic of Azerbaijan, Libya, South Africa, Iraq, Afghanistan, Qatar, the United Arab Emirates, Georgia, Armenia, Pakistan, Ghana, Oman, Tunisia, and Tajikistan.

Polymer Output to Hit 16mt

Abbaszadeh said “Iran Plast” was a key event in the polymer market, showing the growth and capacity of the petrochemical industry, as well as introducing its achievements in terms of modern technology and market development. Referring to the important status of polymers, he said: “In the current calendar year, 1 mt would be added to the 9 mt capacity of polymer output. By the end of the 7^th Five-Year Economic Development Plan, the production capacity of polymers would reach 16 mt /y.”

Abbaszadeh said the chemicals’ average price stands at $300-600 per tonne in Iran’s petrochemical mix. Polymers are valuated at more than $1,000 per tonne. Maintaining the chain of polymers would generate high value for the country.

He also announced that new investment packages would be presented, adding: “Currently, we are importing about $2 billion worth of petrochemicals which we can produce in the country. They have been defined in the from of 21 investment packages so that after launching new projects, we would no longer be hooked on imports and our value-added would be preserved.”

Abbaszadeh also said petrochemical products worth IRR 3200 trillion were offered on the stock market, reiterating the necessity of focusing on engineering products and expanding recycling infrastructure. 

Opportunity for SMEs

More than 20 years ago, NPC initiated “Iran Plast” with a view to bolstering the domestic plastics industry market, supporting and facilitating global marketing efforts, and facilitating entry into international markets. The first four editions of the exhibition were organized with the participation of experienced and skilled exhibition consultants. However, following certain structural changes, the organization of this globally recognized exhibition was handed over to the Public Relations Department of NPC, which has since been responsible for managing the event.

 “Iran Plast” was first held in December 2002 when the exhibition hosted 71 foreign companies from 18 countries and 223 domestic companies. Today; however, “Iran Plast” is being held with the participation of more than 700 domestic companies and 67 foreign companies, of which 49 are directly from China and India, and 18 are representatives of companies from China, India, South Korea, Taiwan, Germany, Austria, Italy, and Turkey.

Addressing the inauguration, Mohammad Moqareh, director of “Iran Plast”, said: “This year, the actual area of the indoor halls was 34,000 square meters, and the outdoor area was about 3,000 square meters, accommodating more than 700 Iranian companies in total. In the international section, about 1,250 square meters was allocated to foreign companies, with Chinese companies still holding the largest portion among foreign participants.”

He said that a significant portion of the exhibitors at this event were small and medium-sized enterprises (SMEs), and the exhibition provided an excellent opportunity for them to enter international markets. Most of the buyers of Iranian products also came from neighboring countries especially Iraq, Afghanistan, and Turkmenistan—which had a strong presence in this edition.

Iran-Russia Strategic Ties

Other keynote speakers at the inauguration ceremony were Iran’s Ambassador to Russia Kazem Jalali, the CEO of Persian Gulf Petrochemical Industries Co. (PGPIC) Mohammad Shariatmadari, and Ahmad Mahdavi Abhari, the secretary general of the Association of Petrochemical Industry Employers.

Jalali said exhibitions provide nations with a good chance to explore their capacities reciprocally, particularly between Iran and Russia, adding: “The

relations between the two nations are strategic and aim to broaden cooperation based on strategic pacts signed between them.”

Another opportunity lying ahead, he said, is the Free Trade Agreement signed with the Eurasian Economic Union (EEU).

“Currently, the volume of trade between Iran and Russia does not match the capacities of the two countries. The public sector is responsible for policymaking, but it is the private sector that must actively step in. Domestic barriers must also be removed with strong determination,” he said.

Mirroring Achievements

Shariatmadari said “Iran Plast” represented an opportunity for exchange of experience and presentation of innovative capacities, adding: “This event reflects achievements and aspirations of the plastics industry and provides an opportunity to take a more comprehensive look at the future of this vital industry. Scientific research and foresight are essential for the petrochemical industry.”

At each hall, the exhibitors showcased their equipment, technologies, and products. Some were engaged in negotiations with visitors from domestic and foreign companies, while others were photographing the displayed items — ranging from heavy machinery and prefabricated products to masterbatch packages, granules, and polymer compounds. Some companies also unveiled their latest scientific, research, and experimental achievements on large screens. Everything on display reflected the full scope of their scientific capabilities and technical expertise.

Iran-Africa Cooperation

On the sidelines of the event, meetings were held between Iranian and foreign officials and businesspersons. Abbaszadeh and Ivorian Ambassador to Tehran Ouattara Tamakolo explored cooperation between Iran and Ivory Coast in the oil and petrochemical sectors. The Ivorian diplomat said his country was firmly willing to benefit from Iran’s oil and petrochemical expertise.

International Links

In every corner of the exhibition, groups of foreign guests could be seen negotiating with others through interpreters. This interaction was also clearly visible inside the halls; above each booth, there were signs indicating various foreign countries whose companies had brought their products to present to the Iranian market, or were engaged in discussions and negotiations alongside Iranian professionals from the plastics and polymer industry.

Majid Boujarzade, director of public relations of Ministry of Petroleum, said: “This year, despite the political and economic conditions resulting from the 12-Day War, the exhibition has been held in a dynamic atmosphere with activity in full swing and with remarkable enthusiasm from industry participants.”

“The strong presence of the community involved in the petrochemical and polymer industries shows that “Iran Plast” holds an important position in showcasing domestic capabilities and strengthening this industry’s connections with both domestic and international markets. By presenting local strengths alongside the participation of foreign companies, this event demonstrated that exhibitions can serve as driving forces to boost production and expand export markets,” he added.

Boujarzadeh said a key point distinguishing “Iran Plast” from similar events pertained to its diversity and extent of audiences.

“Moreover, the presence of around 300 foreign groups from various countries, especially Iran’s neighbors and trade partners, reflects successful planning in the international sector and paves the way for signing new memorandums of understanding and contracts. Local companies, through their perseverance and efforts in production and export, have shown that they are capable of maintaining their position even under difficult circumstances,” he said.

Local Firms

Boujarzadeh said domestic equipment manufacturers displayed remarkable capabilities at the exhibition, equipment that not only rivals foreign counterparts in quality, but is also offered at prices that are more competitive. He stated that it is a matter of pride to witness the significant advancement of Iranian companies in producing equipment needed for the petrochemical industry. Furthermore, the strong presence of downstream companies and participants from the entire polymer industry chain demonstrated that this exhibition is specifically interesting to professionals across all segments of the sector.

In endorsement of Boujarzadeh’s remarks regarding domestic capabilities, the unveiling of the Petrochemical Products Technical Features System on the third day of the event is a case in point.

Tough Economic Conditions

“Iran Plast” was held not long after the recent 12-Day War. MP Morteza Mahmoudi, who is also a member of Production Support Ad Hoc Committee, said manufacturers are in attendance even under toughest economic conditions.

On the sidelines of the event, he said: “This exhibition is being so dynamically while many imagined it would not be held.”

Ali Rabbani, director of energy efficiency at NPC, described “Iran Plast” as a platform that enables Iranian traders and manufacturers to establish closer connections with upstream raw material suppliers. He added that “Iran Plast” was the link connecting petrochemical companies

with downstream industries.

Exports to Eurasia Up 3.5%

On the second day of the exhibition, the Association of Masterbatch and Polymeric Compounds Producers hosted another specialized panel entitled “Examining the Impact of the Iran-EAEU Free Trade Agreement on the Plastics Industry.” In this session, Mir-Hadi Seidi, advisor to the director of Iran’s Trade Promotion Organization (TPO), said that Iran’s exports to the Eurasian region had grown 3.5%.

Iran, Turkey Eye $30bn Trade

In another session on the second day of “Iran Plast”, the topic of “Exploring Barriers to Exporting Compound and Masterbatch Products to Turkey” was discussed. In this session, Abdol Amir Rabi-Havi, director general of the West Asia Office at TPO, announced that consultations and planning are underway to achieve a targeted $30 billion trade cooperation between Iran and Turkey over the next five years.

Among  the other panels held on the sidelines of the 19th “Iran Plast” were some specialized sessions such as “Completing the Value Chain through the Development of BOPP Polyethylene Film Additives”, “Quality Validation Guidelines for Export Products: An Optimal Approach to International Markets”, “Validating Investment Opportunities Using the New FEL Tool”, “The Role of Packaging in Exporting Petrochemical End Products”, “The Future of Molding: New Processes and Emerging Trends” and “The Critical Role of Plastic Films in the Additives Process from Polyethylene.

In addition, during the four days of the exhibition, several training courses were also held, including on “Challenges and Advantages of Polymer Exports: From Production to Delivery”, “Challenges and Opportunities of Tax Credit with the Development of Innovative Polymers” and “Examining Polymer Microstructure Through to Final Production.”

B2B Meetings

Alongside these specialized panels and training courses, B2B meetings were also held simultaneously in other halls. In fact, the targeted participation of foreign traders, addressing downstream challenges, and showcasing innovative products from science-based companies were among the most significant achievements of this edition of the exhibition.

This was also highlighted by Ebrahim Sheikh, a Deputy Minister of Industry, Mine, and Trade. He said: “The enthusiastic participation of specialists, engineers, and visitors showed that this exhibition remains one of the most important events for showcasing the domestic capabilities and potential of the petrochemical industry.”

On the second day of “Iran Plast”, two B2B meetings were held between petrochemical industry producers and foreign trade delegations.

Iraq, KRG Delegates

In the first B2B meeting, a 34-member delegation of exporters, importers, traders, and investors from the Kurdistan Regional Government (KRG) Iraq were present. The KRG has always considered itself a friend and partner of Iran, and throughout the sanctions period, trade cooperation between this region and Iran has never stopped. The export/import delegation, as well as traders and businessmen from the KRG, are striving to continue and expand this cooperation.

The second B2B meeting was with a trade delegation from Iraq, composed of the president and members of the Chamber of Commerce, as well as Iraqi traders, merchants, and business owners, which took place on September 9, the second day of “Iran Plast”.

Ali Alazzam-Hosseini, Chairperson of the Iraqi Chamber of Commerce, said: “This year marked the ninth year in a row that our delegation is attending “Iran Plast”. What stood out to them was the strong and extensive presence of Iranian companies, the booth arrangements, the specialized categorization of producers, the presentation of innovative products and technologies, and the offering of new, diverse equipment and tools, as well as heavy and important machinery.”

Challenges Overcome

On the third day of the exhibition, four B2B meetings were held between Iranian manufacturers and business delegates from Afghanistan, Azerbaijan, Tajikistan, and Pakistan.

A group of Afghan traders, business owners, and manufacturers had come to learn about the latest Iranian technical achievements and equipment during their visit to “Iran Plast” and to sign contracts for purchasing their desired products. The Afghan delegation highlighted the variety of products on display, which allowed them to select their desired items in more detail. One Afghan trader stated: “Machinery and equipment, various types of plastics, polymer compounds, and granules are among the most important raw materials needed in Afghanistan. For this reason, we usually attend exhibitions related to the petrochemical industry to get familiar with the range and quality of products, and then place our purchase orders.”

The Pakistani trade delegation also emphasized the need to find solutions for removing obstacles to trade between Iran and Pakistan. They believe that the sanctions imposed on Iran have had little impact on the trade relations between the two countries. One Pakistani trader attending the meeting said: “I can even say that our country is very eager to trade with Iran. Although today the conditions for this economic and trade cooperation have become more difficult, we can find solutions and ways to make it work.”

Tajiks Interested in Iran Petchem

The meeting between the Tajik trade delegation and Iranian manufacturers was held with the aim of gaining a better understanding of cooperation methods and the export of Iranian products.

What particularly caught the attention of the Tajik trade delegation at the exhibition was Iran’s capabilities and the quality of its products and raw materials. A member of this delegation described Iran’s petrochemical industry as highly capable and up-to-date, noting that it has been very successful on a global level.

Referring to the wide spectrum of Iranian products in this industry, he said: “Overall, the diversity and quality of Iranian export goods to Tajikistan reflect the high commercial and economic potential of both countries, which can contribute to further developing trade and economic relations between Iran and Tajikistan.”

Iran-Azerbaijan Ties

An Azeri trade delegation was also among the participants in the B2B meetings held on the sidelines of “Iran Plast”.

In the meeting, given the importance and extent of the shared borders between Iran and the Republic of Azerbaijan within the North-South Corridor and its significance for regional trade expansion, it was emphasized that any potential obstacles to cooperation between the two countries must be resolved while necessary measures should be taken to develop transportation relations between them.

An Azeri delegate said: “Since the early years of Azerbaijan’s independence, economic and trade relations between the two countries have been established, and Iran has been one of Azerbaijan’s most important trade partners. Although the relationship has at times weakened over the years, we cannot ignore its importance and necessity. Therefore, we must make every effort to expand the economic, trade, and cultural relations between our two countries day by day.”

These meetings were held with the goal of enhancing economic interactions

and developing trade relations between companies involved in plastics, raw materials, and machinery in Iran and other countries.

Willingness for Broader Cooperation

In addition to B2B meetings, negotiations were held between Iranian managers and manufacturers and foreign exhibitors from Azerbaijan, Georgia, Turkey, Afghanistan, Pakistan, Tajikistan, the Kurdistan Region of Iraq, Iraq, Russia, South Africa, Lebanon, Ivory Coast, Oman, Armenia, and Tunisia.

What was mainly heard in the remarks of all the foreign participants was their satisfaction with the capabilities and diversity of Iran’s petrochemical products, as well as their willingness to expand economic and trade cooperation.

Iran Plast, Petchem Driver

In every booth and hall, visitors were engaged in negotiations and tours. Domestic equipment manufacturers also showcased remarkable capabilities that not only rival foreign products but, due to their competitive pricing, are attracting many users toward Iranian goods. This was clearly reflected in the satisfaction expressed by participants and foreign trade delegations.

This point was also echoed in Abbaszadeh’s remarks on the final day of the exhibition. Describing “Iran Plast” as a turning point for expanding trade cooperation with neighboring countries, he stated “The purposeful presence of foreign traders, addressing downstream challenges, and offering innovative products by knowledge-based companies are among the most significant achievements of this exhibition. One of the defining features of the 19th “Iran Plast” Exhibition has been the purposeful participation of experts and professionals from related fields, which has laid the groundwork for effective commercial relations in the petrochemical industry. This reflects the importance and standing of this event for industry actors.”

Giving an account of his own visit to the event, he said: “At the science-based company booths, a wide range of innovative products was showcased, many of which had been produced for the first time. Compared to previous rounds, the quality of downstream industry products has improved, and many of these companies have succeeded in meeting export standards. Conversations with most booth representatives revealed that a significant portion of their products is exported to foreign markets — a clear indicator of progress and the enhancement of industry standards.”

Although the structure and organization of this exhibition followed the format of previous years, the edition stood out with a significant distinguishing feature — the very decision to hold it despite the unpredictable circumstances that emerged for Iran after the Zionist Regime attack.

At the time when planning for the exhibition was supposed to begin, in the tense days following the conflict, many believed it was impossible to organize such an event, considering the situation unsuitable and even calling for its cancellation. However, the officials of the petrochemical industry, along with its stakeholders and participants, decided not to back down despite all the difficulties and to move forward with holding the 19^th “Iran Plast”.

The reputation and vast market of Iran’s petrochemical industry were strong enough that foreign participants were neither deterred by sanctions nor by the threat of conflict, and they visited Iran with the same determination as before. The strong presence of domestic manufacturers and the strong willingness on the part of foreign participants and trade delegations indicated that Iran’s petrochemical industry may serve as a beacon of growth and development, even under the most challenging circumstances.

Combatting Plastic Pollution, Tough but Not Impossible

A one-day conference entitled “Plastic Pollution Crisis: New Challenges and Opportunities”, with the motto of “Responsible Production in the Plastic Value Chain,” was held on 15 September. Organized by National Petrochemical Company (NPC), the event was attended by Shina Ansari, Vice President and head of the Department of Environment (DOE), Hassan Abbaszadeh, CEO of NPC, as well as a group of managers from related domestic and international ministries and organizations.
This conference was held as a continuation of the recent global summit on combating the plastic pollution crisis.

Binding Treaty

In 2022, at its fifth session, the United Nations Environment Assembly (UNEA) adopted a resolution under which the International Negotiating Committee (INC) was tasked with drafting a legally binding treaty. The treaty was required to take an approach that would address not only waste management and recycling, but the issue from the source — namely the design, production, and consumption of plastics.

Here is the text of the relevant paragraph:

Following this resolution, at the previous session (INC-5) held in 2024 in Busan, South Korea, the treaty was expected to be finalized. However, in the end, due to disagreements over several key issues — such as the scope of the treaty, the production of primary polymers, and financing — no agreement was reached, and the drafting of the treaty was postponed to the next session.
The next session was held from 5 to 14 August 2025 in Geneva, Switzerland. The country hosted the INC-5.2 negotiations, which were crucial for finalizing a treaty aimed at reducing plastic pollution and its harmful impacts on human health, the environment, and the global economy, and was attended by 179 UN member states.

Geneva Talks Failure

This round of talks also ended inconclusively due to deep disagreements among the participating governments over the proposed treaty text. On one side, more than 100 countries are calling for limiting plastic production to a sustainable level. The EU members and dozens of countries in South America, Africa, and Asia are among them. They also want to eliminate disposable plastics such as cups and cutlery from the consumption cycle, and to promote the use of reusable plastic products and a circular economy in which the raw materials of a product are reprocessed and reused.
On the other side are the countries that possess the main source of plastic production — crude oil. Among these countries are Saudi Arabia, Iran, and Russia. These countries mainly focus on reducing plastic pollution through enhancing national plastic waste management programs rather than imposing restrictions or changing the production patterns of primary polymer materials derived from petrochemicals.
In this context, Iran, along with other like-minded countries, while emphasizing the need to reach international consensus and understanding on this matter, described the latest draft presented by the chair of the negotiating committee as unbalanced and one-sided. Iran stressed that as long as the treaty does not properly take into account the role of plastics in the growth and development of human society, civilizational realities, and the needs of the global market, and as long as extreme views — which only disrupt the balance between supply and demand and increase prices — are not set aside, reaching an agreement will not be possible.

Next Step

Ultimately, following the negotiations of the Geneva session, the conference “Plastic Pollution Crisis: New Challenges and Opportunities” was held in September 2025 in Iran.

Addressing the conference, Ansari said the petrochemical industry has come to realize that moving toward environmental protection is inevitable.

 “Over the past few years, efforts have been made worldwide to impose restrictions on plastic consumption. Given the risks that plastic pollution — especially in water resources and oceans — has created, it seems that creating global convergence and consensus to combat it is essential. This issue has also been placed as a priority on the agenda of the United Nations Environment Program (UNEP),” she said.

Ansari said Although we use plastic in various industries, including medicine and construction among other sectors, this material, which was produced for human well-being, has also brought pollution along with it. Today, this pollution can be seen in many recreational areas, tourist destinations, and beaches.

Referring to waste management

and the prominent role of industries, particularly the polymer industry, she said: “By adopting an approach focused on developing environmentally friendly technologies, green technologies, and producing eco-friendly products, our industries can minimize the pollution caused by plastic materials.”

Technology Use

The CEO of NPC Abbaszadeh underscored the need for investment in modern technologies to help overcome the challenge of plastic pollution, saying: “Raising public awareness about environmental pollution is essential so that people understand the challenges plastic consumption poses for the world. Organizations such as municipalities must also establish the infrastructure for waste and plastic separation.”

He said by applying technology, chemical and mechanical recycling can be carried out in the cycle, which is of great importance.

Regional Approaches

Some of the participants in the Geneva session believed that the negotiations on the plastic pollution treaty should be conducted in a way that does not negatively impact the economies of developing countries and the livelihoods of millions of people, and that sufficient financial and technological support should be provided to these countries for the effective implementation of the treaty.

Addressing the conference, Ali Mohammad Mousavi, the deputy minister of petroleum for International Affairs and Trade, said “From a broad perspective, beyond the issue of plastic pollution, after several decades of international negotiations, national and international mechanisms have now reached a degree of intellectual convergence where addressing humanity’s multiple needs — including energy, livelihoods, and a clean environment — should be examined within a comprehensive framework and perspective.”

He added: “Approaches to solving global problems need to be designed in accordance with the national conditions of each country or region. Moreover, these approaches must be implementable and trackable on a global scale by all countries; otherwise, it cannot be expected that global goals and programs to address an issue — including plastic pollution, no matter how critical or urgent — will be achieved in a timely manner.”

Mousavi said a look at the relatively long list of deeply disputed issues — such as the “definition of the full life cycle of plastics,” the “definition of problematic and concerning plastics,” the “imposition of limits on the production of primary polymers,” the “unclear scope of the treaty, especially regarding chemical feedstocks,” the “compensation for environmental costs,” and the principle of “common but differentiated responsibilities by developed countries” — shows that the issue of a plastic pollution treaty has broad economic and social implications that seriously challenge the national interests of each country or region, especially those with oil, gas, and petrochemical industries.

Roadmap to Upgrade Iran Status

Davoud Emadi, chair of the policymaking council of the conference, stressed the need for adopting a national roadmap to upgrade Iran’s standing for the purpose of developing the petrochemical industry and protecting the environment.

Regarding the objectives behind the conference, he said: “The main objectives of holding the conference are: reviewing international developments and identifying future challenges and opportunities for government institutions and the private sector; creating a space for dialogue and collaboration among the government, industry, academia, society, and other involved organizations; raising industry awareness about upcoming challenges by examining their environmental, social, and economic impacts; designing a national roadmap to enhance Iran’s position in the path of industrial development and environmental protection; and planning to turn the crisis into economic opportunities through innovation, job creation, development of new markets, and informed product selection.”

Plastic Output at 400mt

Hiroshi Ono, Senior Advisor to Japan’s Ministry of the Environment, Thomas Jahr, head of Norway’s negotiating delegation, Salman al-Ajmi, chair of the LMG Like-Minded Group from Kuwait, and Jyoti Mathur-Filipp, Executive Secretary of the Negotiating Committee, along with representatives from other countries, attended the meeting online.

Mathur-Filipp said global plastic production in 2024 exceeded 400 million tonnes (mt), which represents an increase of 100 mt compared to the previous year.

Noting that a significant portion of this produced plastic has become waste that ends up in rivers and the environment, contaminating soil, water, and even our bodies, he said: “Therefore, the world is now facing the challenges of increasing plastic production and recognizes the need to adopt mechanisms to prevent environmental pollution. Considering the growing population and rising consumerism in the country, without serious actions toward reducing plastic consumption and improving waste management systems, this problem will intensify—especially in urban and industrial areas.”

Jahr said: “Using plastic is unavoidable. We cannot ignore the use of plastic, but given its role and impact on the environment, it is necessary to take action. Of course, we have already been able to take significant steps, but we are still examining and assessing the balance between plastic production and the environment.”

“Regulations can only be effective when they are implemented. In this regard, it is necessary to draw on the experiences of other countries. If we can ensure human health and the environment in this treaty, we will have achieved the goal and vision of these negotiations. Norway is firmly determined to reach an international treaty,” he added.

Minimum Pollution

Al-Ajmi highlighted the current critical and sensitive conditions with regard to plastic pollution, saying: “Recycling requires careful planning. In this regard, industries are expected to show initiative and creativity in their designs, the technologies they use, and also in reducing the use of non-renewable energies. There is also a need for the growth and expansion of knowledge, extensive information exchange, and an up-to-date recycling system. Drafting a treaty alone is not enough. Industries and governments must accept their responsibility to tackle pollution, which is a global challenge.”

“We do not want to stop the plastic production industry, but we can tackle the pollution it causes. In fact, we want to control plastic production in the best possible way with the least pollution and make use of its benefits,” he added.

Comprehensive Approach Needed

Japan has been striving for years to lead the world toward reducing marine plastic waste. Due to its location near the ocean, the country has made reducing plastic waste a central focus of its negotiations. Ono participated online in the conference on the plastic pollution crisis.

Regarding how to counter plastic pollution, he said: “It is necessary to have a comprehensive approach from the time of production to the time of consumption. In addition to managing the production and consumption of plastic, we need to focus on protecting the environment and preventing pollution, especially in riverbeds and oceans.”

According to Ono, in line with treaties to combat plastic pollution, many Japanese companies plan to review their products and take effective measures for their reproduction and recycling. “Our main goal is to control plastic pollution with the participation of all stakeholders—producers and consumers—so that we can achieve desirable outcomes. On the other hand, industries must comply with harmonized regulations. In fact, the regulations and restrictions are not meant to apply to only some countries,” he said.

Referring to the joint meeting of Iran and Japan that had previously been held in Tehran, Ono expressed hope that with flexibility and coordination, these difficult negotiations could be concluded and the treaty finalized. In his view, the treaty to combat plastic pollution is difficult but achievable.

India Refinery Seeks Repair Gear

Russian-backed Indian refiner Nayara Energy is seeking Indian government help to source equipment and materials needed for maintenance as European Union sanctions make it difficult to secure key items, three people familiar with the matter said.

The private refiner has approached the Centre for High Technology, an advisory body under India's oil ministry, seeking assistance in sourcing specialized equipment, catalysts, and other raw materials, the sources said.

Nayara and the Centre for High Technology did not immediately respond to requests for comment.

Nayara, majority-owned by Russian entities including oil major Rosneft operates a 400,000 barrels per day refinery in Vadinar in western India that it has scheduled to shut down for maintenance in February, the sources said.

Refineries typically shut roughly every four years for maintenance that can last 30 to 50 days. Nayara last shut its refinery for maintenance in November 2022.

Indian rules mandate periodic refinery maintenance to ensure operational safety and efficiency. Companies also carry out shutdowns to improve yields.

"They can delay the mandatory shut down by a few months but they cannot postpone it beyond four to six months," the first source with direct knowledge of the situation said.

The sources declined to be identified, as they were not authorized to speak with media.

Nayara is processing only Russian crude after suppliers from Iraq and Saudi Arabia halted deliveries as the EU sanctions imposed in July created payment problems, sources have said.

For maintenance, the refiner requires catalysts for key processing units such as hydrotreaters, hydrocrackers and reformers. While some catalysts can be sourced from China and Russia, others are available only from Western firms, the first and a second source said.

Nayara also needs specialized heavy equipment including compressors, pumps and valves, which are more difficult to procure under current restrictions, the third source said.

“Catalysts are mainly available from the U.S. and European companies. Because of sanctions Nayara may not be able to get them,” said B.N. Bankapur, former head of refineries at state-owned Indian Oil Corp.

Nayara could turn to domestic, Russian or Chinese catalysts, but that would require ensuring that they are compatible and would not adversely impact yields or quality, he said.

Russia Refinery Halts Operations on Vital Unit

A major oil refinery in Kirishi, Russia, stopped a key processing unit after a Ukrainian drone attack. Ukraine is increasing assaults on Russia’s energy infrastructure to weaken its military efforts as peace talks remain stalled.

The Kirishinefteorgsintez plant, run by Surgutneftegaz, was specifically targeted in the drone strike. The governor of Leningrad region reported that three drones were destroyed, and a fire caused by debris was contained with no injuries reported.
An anonymous source stated that the damaged unit, responsible for nearly 40% of the plant’s capacity, was shut down due to the attack, which could lead to a month of maintenance.

To compensate for the lost unit, the plant plans to boost operations at functional sections by 20%, allowing it to maintain about 75% of its processing capacity. In 2024, the plant processed 17.5 million tons of oil, contributing significantly to Russia’s refining output.

Norway First Floating Wind Tender

The first tender to build commercial floating offshore wind farms in Norway has attracted bids from two consortia, the energy ministry said.

The applicants were a group consisting of Equinor and Eni's Vaargronn, and another comprising Deep Wind Offshore Norway AS and EDF Renouvelables International, the ministry said.

Norway in May invited bids for the rights to develop projects of up to 500 megawatts at the Utsira Nord site off its south-west coast.

The country, a major oil and gas producer, is seeking to sharply increase its renewable energy output in the coming decades to meet an expected surge in demand as more industries decarbonize their operations.

“Offshore wind is one of the government's priority areas to ensure enough power in the years ahead,” Energy Minister Terje Aasland said in a statement.

The government will now evaluate the applications and expects to announce whether they fulfil the set criteria in the first half of 2026.

After that, selected participants will have two years to work on the projects before competing in an auction for subsidies in 2028-2029, to be provided as a direct grant to one successful bidder only.

Siri Espedal Kindrem, head of Equinor’s Norwegian renewable energy business, said in a statement that there is yet no financial commitment from the partners in that company's consortium, and that profitability remains a key prerequisite for realizing the project.

Norway has agreed to cap total subsidies at Utsira Nord at 35 billion Norwegian crowns ($3.37 billion), reflecting the technology's relative immaturity.

Floating wind turbines are deemed particularly suitable for greater water depths where fixing the foundation into the seabed is not possible.

Norway awarded a first bottom-fixed offshore wind farm license in 2024, but will focus solely on floating wind farm development when it next announces new tenders.

The government has also set a target of allocating areas for a total of 30 GW of offshore wind development by 2040.

California Resources to Acquire Berry in $717mn Deal

California Resources Corporation said it will acquire Berry Corporation in an all-stock transaction valuing the oil producer at about $717 million, including net debt.

Shares of Berry surged 14.2% in premarket trading following the announcement.

Under the agreement, Berry shareholders will receive 0.0718 shares of CRC stock for each Berry share, representing a 15% premium based on the companies’ September 12 closing prices.

Upon completion, expected in the first quarter of 2026, CRC shareholders will own around 94% of the combined company.

CRC President and CEO Francisco Leon said the deal will create “a stronger, more efficient California energy leader.” He added: “By realizing substantial corporate and operating synergies, we expect to significantly lower costs and generate higher free cash flow.”

Berry Board Chair Renée Hornbaker said the merger “presents a compelling value proposition for our shareholders,” pointing to operational synergies and “strong tailwinds … on the regulatory front.”

The combined company would have produced about 161,000 barrels of oil equivalent per day in the second quarter of 2025 and held roughly 652 million barrels of proved reserves at year-end 2024.

CRC also expects to achieve $80 million to $90 million in annual synergies within 12 months of closing.

CRC will refinance Berry’s debt using cash and credit facilities and may issue new debt to optimize its balance sheet. The merged company will be headquartered in Long Beach, California, led by CRC’s existing executive team.

World Oil Market to See Higher Surplus

World oil supply will rise more rapidly this year and a surplus could expand in 2026 as OPEC+ members increase output and supply from outside the group grows, the International Energy Agency said in contrast to OPEC's own updated outlook.

Supply will rise by 2.7 million barrels per day (bpd) in 2025, up from 2.5 million bpd previously forecast, the IEA, which advises industrialized countries, said in a monthly report and by a further 2.1 million bpd next year.

OPEC+ is adding more crude to the market after the Organization of the Petroleum Exporting Countries, Russia and other allies decided to unwind its second layer of output cuts more rapidly than earlier scheduled. The extra supply has raised concern of a surplus and weighed on oil prices this year.

Supply is rising far faster than demand in the IEA’s view, even though it upwardly revised its forecast for growth in world demand this year to 740,000 bpd, up 60,000 bpd from the previous forecast, citing resilient deliveries in advanced economies.

"Oil markets are being pulled in different directions by a range of forces, with the potential for supply losses stemming from new sanctions on Russia and Iran coming against a backdrop of higher OPEC+ supply and the prospect of increasingly bloated oil balances," the IEA said in the report.

IEA demand forecasts are at the lower end of the industry range, as the agency expects a faster transition to renewable energy sources than some other forecasters such as OPEC.

OPEC maintained its forecast that demand will rise by 1.29 million bpd this year, almost double the rate expected by the IEA, and said the world economy was doing well into the second half of 2025.

The upbeat outlook follows the decision of the wider OPEC+ to further raise its oil output quotas from October as its leader Saudi Arabia pushes to regain market share.

The IEA has been saying the world market looks oversupplied and the report said global inventories would rise by an “untenable” 2.5 million bpd on average in the second half of 2025 as supply far outstrips demand.

Next year, the report implied that supply might exceed demand by about 3.3 million bpd, with growth from OPEC+ and producers outside the group such as the U.S., Canada, Brazil and Guyana, and a limited expansion in demand, up from almost 3 million bpd last month.

OPEC, in contrast, forecasts a slower rate of supply expansion outside OPEC+ of 630,000 bpd next year. The drop in oil prices this year, partly due to OPEC+ output hikes, has put pressure on the economics of U.S. shale output, analysts say.

Rather than the IEA's implied surplus in 2026, OPEC's report implies a deficit of 700,000 bpd if OPEC+ keeps pumping at August's rate of 42.4 million bpd, according to a Reuters calculation based on the report.

China continues to stockpile crude, the IEA said, which is helping to keep Brent crude prices for immediate delivery higher than those for later contracts, a structure known as backwardation, which indicates a tight market.

The IEA said its implied surplus may not materialize.

"There are a number of potential twists and turns ahead – including geopolitical tensions, trade policies and additional sanctions on Russia and Iran – that could yet alter market balances," it said.

China Rejects US ‘Bullying’ Over Oil Threats

Beijing described the US call to G7 and NATO countries to impose tariffs against China and other countries importing Russian oil as a “typical act of unilateral bullying” and “economic coercion”, and threatened countermeasures if Washington’s call is heeded.

China’s rejection of the US push came even as the Chinese and US delegations reconvened in Spain for the second day of their talks on economic and trade issues.

At a regular news briefing, Chinese Foreign Ministry spokesperson Lin Jian said that China’s normal economic and energy cooperation with countries around the world, including Russia, is legitimate, lawful, and above reproach.

He made the remarks when asked to comment on reports that the US has asked G7 and NATO members to collectively impose additional tariffs on China for purchasing Russian oil to pressure Beijing to play a role in ending the Russia-Ukraine conflict.

“The US move is a typical act of unilateral bullying and economic coercion, which seriously undermines international trade rules and threatens the security and stability of global industrial and supply chains,” Lin said.

“Facts have proven that coercion and pressure are unpopular and will not solve the problem. China’s position on the Ukraine crisis is consistent and clear. Dialogue and negotiation are the only viable way out,” he said.

US President Donald Trump said NATO countries should impose 50 to 100 per cent tariffs on China and stop buying oil from Russia to help end the Ukraine conflict.

On the same day, Treasury Secretary Bessent, during a call with G7 finance ministers, reiterated President Trump’s call to the bloc’s partners about joining the US in imposing tariffs on countries purchasing oil from Russia to end the war in Ukraine.

Lin said since the very first day of the Ukraine crisis, China has been taking an objective and impartial stance, promoting peace talks.

“We firmly oppose parties directing the issue at China and firmly oppose the imposition of unlawful, unilateral sanctions and long arm jurisdiction,” he said, adding that if China’s legitimate rights and interests are harmed, it will take resolute countermeasures and firmly safeguard its sovereignty, security and development interests.

He said, “The majority of countries, including the US and Europe, continue to engage in trade with Russia. The normal exchanges and cooperation between Chinese and Russian enterprises comply with WTO (World Trade Organization) rules and market principles, are not targeted at any third party, and should not be subject to interference or influence from any third party.”

China’s Foreign Minister Wang Yi also rebuffed the US call to G7 countries, saying that war cannot solve problems and sanctions only complicate them.

While Bessent’s statement did not name any country, the US has often blamed India and China for purchasing Russian oil even when there are no tariffs on Beijing for it.

The Trump administration has imposed 50 per cent tariffs on India, including 25 per cent for Delhi’s purchases of Russian oil.

 

China Renewable Auction Signals Challenges

Solar power prices in China’s first provincial auction under its new renewable pricing mechanism were so low they could discourage new project investments there, analysts said.

The auction in Shandong province, seen as a bellwether for nationwide auctions, signals that renewables prices in the future will be lower than under the previous system — though not necessarily as low as in Shandong, where a glut of solar investment has driven prices down.

Based on the results, “I wouldn't be optimistic in other provinces unless it's in coastal provinces with strong power growth,” Jefferies analyst Alan Lau said.

The auction was part of a reform announced in February aimed at introducing market-based pricing in the world's dominant producer of renewable energy.

Previously, renewables projects in China enjoyed a guaranteed rate of return fixed to the coal price benchmark. That gave developers valuable certainty but risked over-investment.

From June, local transmission grid operators will award new renewable projects contracts for most of their generation using an auction that sets a clearing price based on the highest bid, after selecting bids from lowest to highest until the province's target volume is met. Renewable generators must sell into the market but will be compensated if the price falls below the auction clearing price, or strike price.

Shandong, a top renewables builder, was the first to hold auctions.

The clearing price for solar was 225 yuan (R547.98) per MWh, according to a state media report citing Shandong's grid operator. Developers could submit bids between 123 yuan/MWh (R299.59) and 350 yuan/MWh (R852.55).

Investors would struggle to make an acceptable rate of return at that price, Lau said.

Many of the Shandong projects were already completed so were “desperate” to sell their power at a fixed rate, said Lauri Myllyvirta, co-founder of the Helsinki-based Centre for Research on Energy and Clean Air.

The system offers more certainty than the alternative of selling into Shandong's spot market.

Recent average spot prices in the province have been as low as 116 yuan/MWh (R282.59) because of its ample solar supply, said David Fishman, principal at consultancy the Lantau Group, in a post on LinkedIn.

 

SOCAR Buys Oil Refiner Italiana Petroli

Italiana Petroli’s founding family is nearing the sale of the oil refiner to State Oil Company of Azerbaijan (SOCAR) in a deal that would hand the group control of one of Italy's largest petrol station networks, three sources said.

A deal with SOCAR is expected to be signed soon, two of the people said, barring any last-minute postponement.

The sources did not disclose the financial terms of the agreement.

People close to the matter had previously told Reuters Italy's Brachetti-Peretti family was seeking an enterprise value of around 2.5 billion euros ($2.9 billion) for their company, which holds some 500 million euros in cash.

SOCAR and Italiana Petroli did not respond to requests for comment.

SOCAR is being advised by Italy's Intesa Sanpaolo IMI CIB with UniCredit advising the owner of IP.

IP has a total refining capacity of around 200,000 barrels per day and operates a network of more than 4,500 fuel stations. It also owns important storage and transport assets in Italy, including for jet fuel.

Last year it posted an adjusted core profit of nearly 500 million euros.

The expected deal would follow the sale by Italy's Moratti family of its controlling stake in oil refiner Saras to global commodity trading house Vitol last year.

These transactions underscore a broader trend of private investors retreating from Europe's refining sector, which has become increasingly volatile.

The acquisition would boost SOCAR's presence in the Mediterranean fuel market. The company already owns the 200,000 bpd STAR refinery in Turkey.

IP currently owns a refinery in Ancona in eastern Italy, as well as the SARPOM refinery in Trecate in the north. It also has a tolling contract for the Alma refinery in Ravenna.

IP increased its refining and fuel storage capacity in 2023 when it finalized the acquisition of Exxon Mobil's Italian assets.

Mexico €5bn Bond to Fund Pemex Buyback

Mexico launched a three-tranche bond issue for up to 5 billion euros ($5.88 billion) to partially finance a $9.9 billion bond buyback from state-run oil company Pemex, LSEG’s fixed-income news service IFR reported.

The issue consists of four-year bonds for up to 2.25 billion euros, eight-year bonds for 1.5 billion euros, and 12-year bonds for 1.25 billion euros.

The proceeds will be used for the general purposes of the Mexican government, as well as to "make a capital contribution to Petroleos Mexicanos (Pemex), which in turn will be used by Pemex partially repay, redeem and repurchase certain of its outstanding securities," IFR said.

Pemex said in early September that it was looking to repurchase some $10 billion worth of global bonds with cash raised by the Mexican government. Mexico already sold $12 billion in debt to support Pemex this year in the form of pre-capitalized securities, or P-Caps, which allowed the sovereign to support the oil company while keeping those obligations off its books.

The latest sale also comes after a record $8.5 billion offer in January. Mexico’s external central bank government debt totaled $237.5 billion as of July.

Mexico follows Colombia in issuing euro debt this month. It was the first time the latter had done so in almost 10 years.

“Given the high demand for the recent Colombia EUR bond issuance, Mexico is taking advantage of the appetite for EUR bond debt,” said William Snead, a strategist at Banco Bilbao Vizcaya Argentaria.

Fitch Ratings in August said the P-Cap transaction will be broadly neutral on the sovereign’s credit rating of BBB-.

“However, Pemex’s challenges could eventually weigh on the sovereign’s credit profile if greater support is needed to cover growing operational losses, increasing sovereign debt without decreasing company debt,” Fitch analysts including Todd Martinez wrote in the report.

Exxon to Offer Auto-Voting to Counter Shareholder Activism

Exxon Mobil is introducing a unique shareholder voting mechanism that will allow retail investors to automatically cast ballots in step with board recommendations during annual meetings, a move that may help the top U.S. oil producer fend off activist campaigns.

The U.S. Securities and Exchange Commission said in a letter that it would not object to the plan from Exxon as long as the company met certain conditions, including providing annual reminders to investors who opted into the mechanism about their participation. The SEC's response could prompt other companies to follow suit.

The oil major has fought back aggressively against activists in recent years, and could shore up more support from its unusually large base of retail shareholders - who typically have lower turnout rates but vote overwhelmingly in support of Exxon’s board.

Individual investors currently "lack access to numerous services that make voting fast and easy for larger institutional investors. Activist groups often exploit this gap to push political goals at the expense of shareholder value," Exxon said in a statement.

In the coming weeks, retail investors will be notified through their brokerages that they can enroll in a free program to vote their shares in line with management recommendations, Exxon said in a statement.

If investors change their minds, they can override the program and cast their votes manually according to instructions in the proxy materials. Exxon said it is the first U.S. company to offer such an option.

"As a matter of fairness, it's time to level the playing field," the company said.

Individuals nearly hold 40% of the company’s shares, but just a quarter of them vote during proxy season, though they mostly support the board, Exxon said.

Retail investors hold about 30% of most large U.S. companies. They are a sought-after pool when companies face close board elections or campaigns for ideologically charged shareholder resolutions. Only a few other iconic U.S. brands approach Exxon's level of retail ownership including Apple and Tesla.

Exxon has faced several high-profile activist shareholder campaigns tied to climate issues in recent years, notably in 2021 when three dissident directors were elected to its board.

Last year, it continued to pursue litigation against activist investors Arjuna Capital and Follow This, even after the groups withdrew their proposal calling on Exxon to cut its greenhouse gas emissions.

In a statement in May last year after a judge dismissed Exxon's lawsuit against Follow This, founder Mark van Baal said Exxon was attacking the rights of all shareholders to put forth proposals about emissions, the cause of climate change.

Exxon's most recent annual meeting in May featured no qualifying shareholder resolutions for the first time since 1958, following its aggressive campaign against resolution-filers.

In the statement, Exxon noted a number of top fund managers have created similar options allowing their investors to vote with corporate boards, although the fund firms also allow users to select other policies like choices that support more climate and social measures.

During an energy conference in Austin, Exxon CEO Darren Woods said the company wanted to stop activists from submitting the same proposal year after year.

"My view is, if you are going to play that game, we can play too," Woods said.

Syria Renewed Oil Exports and Ramifications

Shuaib Bahman

Intl. Affairs Analyst

Prior to the 2011 crisis unfolded in Syria, oil had a central role in its economy, accounting for around 40% of export revenues and 24% of gross domestic product (GDP). However, war, sanctions, and the severe destruction of infrastructure weakened the country’s energy sector. Against this backdrop, resumption of Syrian oil exports after a 14-year hiatus marks a turning point in its economic trajectory. In 2025, shipment of 600,000 barrels of heavy crude from the port of Tartus was seen by some pundits as a signal to Syria’s re-integration into global oil markets. Nevertheless, many questions remain unanswered regarding the transparency, sustainability, and economic as well as political consequences of this development.

Aspects of Exports

Oil has historically been one of the main pillars of Syria’s economy. Until 2011, the country produced around 380,000 b/d, of which about 150,000 b/d was exported, generating annual revenue exceeding $3 billion. However, war and sanctions reduced production to less than 30,000 b/d, transforming Syria from an oil exporter into an importer.

The recent export of 600,000 barrels, valued at an estimated $45 million, could, if sustained, generate up to $540 million in annual revenue. Although modest compared to pre-war levels, this income could help plug the trade deficit and provide financing for reconstruction projects.

The resumption of Syrian oil exports carries significant implications for the Levant region. Prior to the war, 90% of Syria’s oil exports was destined to the European Union, but now, amid shifting geopolitical dynamics, new markets such as China are emerging.

Challenges Ahead

The resumption of Syrian oil exports carries significant implications for the Levant region. Before the war, 90% of Syria’s oil exports destined to the European Union, but now, amid shifting geopolitical dynamics, new markets such as China are emerging.

Removal of the US and European sanctions in June 2025, enabled Syria’s legal return to the global oil markets. It also allowed signing agreements with American companies such as Baker Hughes, Hunt Energy, and Argent Corporation, as well as an $800 million contract with DP World for the development of Tartus, which could accelerate the rebuilding of oil infrastructure and boost production; however, Syrian oil exports still face numerous challenges:

1. SDF Grip on Oil Fields: Many Syrian key oil fields, such as al-Omar and Rumailan—with a combined production capacity of around 80,000 b/d—remain under the control of Kurdish forces known as Syrian Democratic Forces (SDF).This is while the government has access only to areas producing about 20,000 b/d. This significantly limits the state’s ability to scale up production and exports.
2. Damaged Oil Infrastructure: Fourteen years of conflict, coupled with non-standard extraction methods, has severely damaged wells and pipelines, including the vital Hasakah-Tartus line. Repairing these facilities requires major investment and advanced technology.
3. Technical Limitations of Refineries: The Homs and Baniyas refineries are unable to process heavy crude, making the export of this grade of oil unavoidable. This constraint reduces the country’s capacity to meet domestic demand for refined petroleum products.
4. Lack of Transparency in Oil Transactions: The identity of the buyer, destination of the export shipment, and the source of the 600,000 barrels of exported crude remain unclear. Such ambiguity can undermine public trust and fuel speculation about corruption.
5. Dependence on Oil Imports: Current production of around 30,000 b/d meets only about 15% of domestic demand, which stands at 200,000 b/d. This reliance on imports—costing an estimated $2 billion annually—places significant pressure on the country’s foreign currency reserves.
6. Political and Security Tensions: Ongoing frictions with Kurdish forces and broader security concerns stemming from years of conflict make it difficult to attract foreign investment and ensure stable oil operations.
7. Legacy of Previous Sanctions: Although sanctions were lifted in June 2025, their long-term effects—including a 70% reduction in export capacity and the destruction of institutions—continue to hinder full recovery of the oil sector.
8. Regional Rivalries: Complex relations with neighboring countries such as Turkey, Iran, and Iraq, combined with geopolitical competition and external interventions, risk disrupting plans for pipeline development and oil exports.
9. Underinvestment and Poor Technology: To restore pre-war production levels of 380,000 b/d, Syria’s oil sector requires substantial foreign investment and modern equipment. Limited funding and decrepit infrastructure slow down this process considerably.
10. Environmental Concerns: Years of non-standard extraction and refining practices have caused significant environmental damage. Addressing these problems will require decades of effort and large-scale investment.

Production and Export Vision

As far as an outlook for Syria’s oil production and exports is concerned, it should be noted that while the country could, through investment in infrastructure rebuilding and cooperation with international companies, restore output to pre-war levels of 380,000-400,000 b/d, this would require the workover of wells, repairing pipelines, and overhaul of refineries, as well as application of modern technologies.

In case exports continue—such as the 600,000-barrel shipment valued at $45 million—annual revenues could reach $540 million. With the regaining of key oil fields and an increase in production, export earnings might return to around $3 billion per year, similar to pre-2011 levels. Moreover, by boosting oil output, Syria could revive its petrochemical industry, which supplies raw materials for the production of 500,000 different products, including fertilizers, plastics, and paints. This would reinvigorate the country’s industrial production cycle and contribute to economic diversification.

However, realizing this outlook depends on overcoming challenges such as political tensions with Kurdish forces, the lack of modern infrastructure, and the need for greater transparency in oil transactions. In addition, aligning oil policy with broader macroeconomic strategies and adopting sustainable environmental practices will be essential. If managed properly, the oil sector could once again become the driving force of Syria’s economic recovery and restore the country’s position as an oil exporter.

US Pressure on India; Trade War & Oil Ban

Shuaib Bahman

Intl. Affairs Analyst

In the turbulent cycle of international relations, India, which is one of the world’s emerging economies, has become a focal point for major powers. With the outbreak of the Ukraine war in 2022 and the escalation of Western sanctions against Russia, India has faced both diplomatic and economic challenges. Prime Minister Narendra Modi, confronted with threats from the US President Donald Trump to impose tariffs on Indian exports, took a firm stance and emphasized support for local industries. At the same time, Modi’s government maintained its trade policies by refraining from issuing an order to halt the purchase of Russian oil for Indian refineries.

Economic and Geopolitical Impacts

The recent Indo-American tensions stem from the Trump’s trade policies. The Trump administration imposed a 50% tariff on Indian exports to the US while also threatening further action if India continued purchasing oil from Russia. These threats form part of the Washington’s broader strategy to pressure Russia into ending the war in Ukraine. Accordingly, Trump’s decision to impose additional tariffs on Indian imports can be examined from two main perspectives: economic and geopolitical.

1. From an economic standpoint, this move reflects Trump’s “America First” policy, which focuses on reducing the US trade deficit with foreign partners. In his posts on the Truth Social platform, Trump criticized India’s customs tariffs—claiming they are “the highest in the world”—and described its non-tariff barriers as “frustrating and unpleasant.” Statistical evidence shows that US trade deficit with India has widened in recent years, and tariffs could serve as a tool to rebalance trade relations. However, this economic approach addresses only part of the issue; Indian exports to the US mainly textiles, pharmaceuticals, and technology—represent only a small portion of India’s overall exports, limiting the broader impact of these measures on India’s economy.
2. From a geopolitical perspective, this decision is primarily linked to Western sanctions against Russia. The US accuses India of purchasing Russian oil both directly and indirectly, and even of reselling it on global markets for substantial profit—an act it views as “circumventing” sanctions and indirectly supporting Russia’s war in Ukraine. Trump argues that continued oil trade with Russia undermines the effectiveness of sanctions and helps finance the war. This strategy, echoing the aggressive trade policies of his first presidency, targets not only India but also any country engaging in critical sectors such as oil and gas with Russia.

Future Prospects

India, as the world’s third-largest oil consumer and an emerging economy, supplies over 85% of its energy needs through imports. Since the start of the Ukraine war, its oil imports from Russia have risen dramatically now accounting for 35% of total imports, or roughly 1.75 mb/d whereas before the conflict they made up less than 2%. The increase in Russian oil imports is driven not only by lower prices but also by independent commercial decisions taken by both state-owned and private Indian refineries.

Ukraine and its allies, including the US, argue that these purchases allow Russia to sustain its war effort, as India’s oil imports from Russia effectively undermine Western sanctions against Moscow. India, however, emphasizes the economic dimension, justifying its purchases on financial and logistical grounds. For this reason, despite the US pressure, the Indian government has issued no directive to halt Russian oil imports. The main reason is that India’s reliance on discounted Russian oil shields its economy from global market volatility, while a sudden suspension of these imports could trigger energy inflation and pose serious challenges to the Indian economy.

From a diplomatic perspective, India’s relations with Russia are rooted in the Cold War era. Since that time, Russia has been one of the largest suppliers of arms to India, and their bilateral partnership is often described as “time-tested.” Indian Foreign Ministry spokesperson Randhir Jaiswal has stressed that relations with other countries are built on their own merits and should not be viewed through the lens of a third party, such as the US. Another key element is India’s effort to project its diplomatic independence. Despite the US criticism, India continues to seek an active role within BRICS.

For years, the US overlooked India-Russia relations in order to leverage India as a counterweight to China. Now, however, Trump has chosen to target India as a means of pressuring Putin. This shift in tone reflects a strategic change in the US policy, in which Trump appears willing to risk relations with India in order to intensify pressure on Russia.

From a commercial perspective, raising tariffs to 50% could have far-reaching consequences for India’s economy. With annual exports to the US exceeding $50 billion—including pharmaceuticals, jewelry, and information technology—India may face a decline in competitiveness. Moreover, this move could derail negotiations for a bilateral trade agreement that had been expected to conclude in the fall of 2025.

Despite these negative consequences, the reality is that India, with its growing economy and 1.4-billion-strong population, cannot afford to ignore its dependence on low-cost Russian oil even at the expense of straining ties with the US. In the longer term; however, India will inevitably need to make serious investments in renewable energy in order to reduce its reliance on oil imports, withstand external pressures, and diversify its energy sources.

An In-Depth Story of Oil

(Part I: Ancient and Middle Era)

Elaheh B.S.

Whenever there is any talk of political and economic decisions, undoubtedly oil is cited. Ever since flowing through the veins of the earth, it has shaped countless narratives for nations. From the days when sacred texts spoke of coating ships with bitumen, to the discovery of oil in America and across the Near and Middle East, oil has been both a savior and scourge. Intermittently, it has fueled growth and prosperity and brought colonial domination. In addition, in more recent history the same as a distinguished diplomat, it became a turning point for a territory like Iran, marking March 20, 1951, and August 19, 1953, into the nation’s memory.

Looking further back into history, when we examine oil’s political role in this country, we encounter either contracts that bartered away Iran’s oil to foreigners, or acts of courage that fought for the liberation of this national wealth. Oil, then, is not merely a substance formed by chemical reactions beneath the earth; rather, it has always served as a politician, a diplomat, and a force that shapes history on a global scale.

Ancient ‘Nepta’

Let us turn back to the years before Christ, when the simplest foundations of civilization were formed around mighty rivers and fertile soil. Yet what often determined the endurance and legacy of those civilizations was their remarkable connection to a thick, black substance hidden beneath the earth. Today we know this substance as oil, though the precise origins of the word in Persian remain uncertain. According to some archaeologists, the term derives from the Persian verb nâb, meaning “to be moist,” while in Avestan it was called nepta, and among the Chaldeans, Jews, and Arabs it was known as nefta. Another archaeologist, however, traced the word’s roots to the Akkadian verb teptu, meaning “to ignite,” later used in Assyrian and Babylonian languages. What is certain from all these findings is that in the Avesta, “naft” referred to mineral oil, and during the Achaemenid era, it was used both for lighting and for medicinal purposes.

In general, when relating the history of oil and its impact on this land, it must be noted that the Elamite civilization, benefiting from the abundance of rich oil resources that naturally seeped to the surface, was instrumental in utilizing oil and its derivatives, which has been confirmed by archaeological findings. While oil cannot be considered one of the primary reasons for the rise of civilizations in Persia and Mesopotamia, it undoubtedly contributed greatly to the prosperity and development of these regions.

Ancient Persia Use

The ancient Iranians, who regarded fire as a sacred element, revered the natural gas from oil that in some places seeped from the earth and ignited. Because it burned perpetually, they considered it the “eternal flame.” Other excavations reveal that as early as the Sumerian period, some 5,000 to 6,000 years ago in Susa, bitumen was in use. It served as a mortar between stones and bricks in construction, was used to mount jewelry, and coated ships and ceramic vessels for protection.

Some sources recount that the inhabitants of the southwestern Iran during the Neolithic period were among the first people to become familiar with the properties of natural bitumen and to use it in various ways. They exploited its adhesive qualities to haft tools such as composite sickles, adzes, and bone awls. Traces of natural bitumen found on the stone blades and wooden or bone handles of these tools show that this substance was used for fastening them together. The oldest evidence of natural bitumen being used to attach stone cutting tools to wooden handles in Iran was discovered in the Kaldar Cave and dates back about 54,000 years. In those eras, bitumen was collected naturally from surface and subsurface layers of the earth.

Studies of oil use during the urbanization period in Iran indicate that with the rise of urban life in the Susiana plain, and specifically in the Susa Acropolis in the fourth millennium BC, the use of natural bitumen entered a new phase. By mixing natural bitumen with other materials, people could create new substances with which they could manufacture a variety of objects and vessels.

Hills of Blazing Bitumen

Greek historian Herodotus, in his Histories about oil in Persia, puts it as follows “At a distance of 22 kilometers from Susa, there is a place called Ardericca. Here are wells from which oil, bitumen, and salt are drawn with wheels and skins, poured into a reservoir, and after some time the bitumen and salt settle to the bottom while the oil remains as a liquid.”

According to these historical writings, oil has long existed in Iran and in neighboring lands now known as the Middle East, where people used it for various purposes. Among the earliest traces of oil in warfare can also be found in Herodotus’s accounts, where he notes: “The Persians hurled blazing bitumen from the hills onto the Greek fortifications, and it is evident that their arrows were smeared with oil; otherwise, they would have been extinguished in flight.”

In Book VI of The Histories—known as Erato—the Greek historian Herodotus recounts the fate of a group of Roman prisoners in Persia. What stands out in this account are the references to natural oil seeps and the indigenous techniques of extracting and utilizing oil and bitumen—what Herodotus describes as “wells of bitumen, salt, and oil” in the land we now call Khuzestan.

In one passage, regarding the settlement of Greek captives who had been brought to Susa, he writes: “The only punishment King Darius inflicted upon them was to settle them on one of his estates in Ardericca (or Arderikka), where there are wells that yield three different products. From these wells come bitumen, salt, and oil. The method of extraction is as follows: the liquid from the well is drawn up with a kind of seesaw pump, to which half of a wineskin is attached in place of a bucket. It is poured into a basin, from which it flows off into another place, and there it separates into three forms. The bitumen and the colorless salt solidify, while the oil—called rhadinace by the Persians—remains, a black liquid with a disagreeable odor.”

Oil and Shipping

A Roman historian named Ammianus Marcellinus puts it as follows: “The Persians soaked the leaves of a special plant in oil. Then they added another liquid called naphtha to it. After that, they dipped their war arrows in the mixture, set them on fire, and shot them toward the enemy. Wherever these arrows landed, they caused a blaze, and the fire could not be extinguished with water — only sand and gravel could put out the flames.”

The creation of a navy, the arming of fleets, and the construction of warships constituted another major sphere in which the Iranians employed oil and its derivatives. It is said that Achaemenid soldiers, during their crossing of the Hellespont—known today as the Dardanelles Strait carried blazing torches on their ships, the fuel of which was a petroleum-based substance. Malcolm College likewise points out that “in the Parthian era, the Iranians also defeated their enemies through the use of oil. During the Roman assault led by Septimius Severus on the city of al-Hadr, the cavalry of the Hadhris struck the Roman supply columns, while the defenders of the city destroyed nearly all the siege equipment and tormented the soldiers by unleashing baskets of insects and the so-called ‘Hadhr fire,’ which was burning petroleum.”

Time passed, and broader avenues of economic exchange and trade began to open. Inventions were being registered one after another across various lands, and at the dawn of the eighteenth century, a Scotsman’s harnessing of coal and steam power gave rise to an unparalleled industrial, economic, social, cultural, and political revolution in European and American societies. This development culminated in the invention of the steam engine. Not long afterward, in the late nineteenth century, oil was discovered in the US. These unprecedented transformations spurred a rapid growth in Europe’s population, and in their quest to secure essential resources, Western powers turned their gaze toward the immense wealth of the East. The peoples of the East, lacking the scientific and industrial advantages of the West, were easily subjected to exploitation.

Last but not least, oil had undergone a profound transformation in its role: no longer merely a tool for kindling fire in warfare or a substance for medicinal use, it had become a coveted resource whose control and concessions sparked wars, shaped negotiations, and emerged as a pivotal force in major political decision-makings by nations.