2025, Oil Industry Development on Track

Iran’s petroleum industry is closing out 2025 carrying a wealth of experience and development—a year that could be described neither as one of excessive optimism nor as a period of chronic pessimism. December 2025, above all, is a month of consolidating realities: realities that show the Iranian oil industry, contrary to oversimplified external narratives, remains active, continues to attract investment, and stays connected to the global energy market—albeit within its own specific constraints and rules.

The year 2025 was marked by severe tests and strategic decisions for Iran’s oil industry. Donald Trump’s return to the White House and the revival of the maximum pressure policy, the outbreak of the 12-Day War, the activation of the snapback mechanism, and the continuation of economic sanctions created a high-risk environment for the country’s energy sector. Nevertheless, the historical experience and institutional capacity of the oil industry demonstrated its ability to actively adapt to external pressures; its trajectory not only did not come to a halt, but continued with a realistic and intelligent approach.

During this year, the upward trend in the country’s oil and gas production was maintained despite all constraints. A focus on sustaining production, technical reservoir management, and the implementation of infill drilling and production optimization projects ensured that Iran’s share in the global energy market remained reliable. Record-breaking gas production at the South Pars field in the closing months of the year once again solidified the field’s position as the backbone of the country’s energy security—an achievement that is less about a production figure and more a sign of the technical and managerial maturity of Iran’s gas industry.

In the development sphere, the commissioning of development projects across the oil, gas, refining, and petrochemical sectors, as well as the inauguration of the second train of CTEP at the jointly owned South Azadegan field, symbolized a targeted move toward reducing processing bottlenecks, increasing production flexibility, and completing the value chain. These projects send a clear signal to the market: Iran’s oil industry remains capable of bringing operational projects to completion—even under conditions of financial and technological constraints.

At the same time, in that year, energy policymaking also entered a new phase. The launch of reforms in fuel consumption patterns—particularly in the areas of gasoline and diesel—signaled a shift in perspective from an exclusive focus on supply toward intelligent demand management. This approach will play an important role in reducing fuel smuggling, increasing energy efficiency, and ensuring the long-term sustainability of Iran’s energy balance.

In the energy diplomacy domain, Iran maintained an active and purposeful presence in 2025. Engagement with neighboring countries, proceeded with its efficacy in OPEC and OPEC+, and the preservation of Iran’s position in international energy institutions demonstrated that the oil industry remains one of the country’s effective tools of foreign policy.

Overall, the record of Iran’s oil industry at the end of 2025 closes with one key reality: Iran’s oil and gas industry has not come to a halt. Relying on the determination of its managers, engineers, and workforce, the industry remains one of the pillars of stability and reassurance in the global energy market and continues along its path of development with realism and resilience.

Petropars Helps Boost Azadegan, SP11 Output

The CEO of Petropars Hamid Reza Saqafi says “Petropars Group” is currently operating a number of high-valued oil and gas projects chiefly inside Iran, aimed at boosting national production and ensuring energy security. In an interview with “Iran Petroleum”, he said that Petropars is actively involved in infrastructure development and construction, thereby contributing to increased oil and gas products. Sagqafi stated specifically that Petropars has succeeded in enhancing production from the Azadegan oil field by 75,000 b/d, while at the same time, through just Phase 11 of the giant offshore South Pars gas field, it has helped raise gas supply to over 20 mscf/d. He added that production from Phase 11 has increased by about 60% over the past year.

What follows is the full text of “Iran Petroleum” interview with the CEO of Petropars:

Could you tell us about the level of progress in your priority projects?

One of the projects that has gained particular importance for us is the Farzad gas field, which we share with Saudi Arabia. We decided to lay special focus on this field. Both offshore and onshore engineering activities have already started. We have also conducted a cost-benefit assessment. Recently, we have designed and prepared the topside entirely from scratch. Our operational teams are working around the clock on the jacket. Geotechnical studies and positioning tests have been completed, and following seabed sampling, a Leg Penetration Analysis (LPA) has been prepared. Once the jacket is ready, load-out operations will be carried out and the structure will be transferred for seafastening prior to final installation. Installation will be performed by lifting, and the pile hammers and carrier barge are already in place and ready.

How long will jacket installation take?

In offshore operations, sea conditions are decisive. At times, adverse weather does not allow work to proceed. Based on two decades of my experience in offshore operations, during this season our operational window is limited until June. We will certainly make full use of this limited weather window and install the jacket. On the onshore side, however, everything is ready and all arrangements have been made. After that, it will be time to mobilize the drilling rig. Negotiations for the rig have been finalized by the Ministry of Petroleum, and once the jacket is installed, the rig will be positioned and drilling will begin.

If current weather conditions persist, when do you expect drilling to start?

The jacket will definitely be installed within the next two months, and the drilling rig will be stationed on the installed jacket by the end of the current year. The challenge of the Farzad field lies in the fact that drilling there is extremely difficult and complex due to geological conditions and stratification. Saudi Arabia has been prospecting in its share of the field for years. We plan to install two wellhead platforms, comprising one living quarters platform and one central facilities platform that final engineering study is going on. Produced gas will be transported via a 100-kilometer pipeline to Pars III for processing. Energy Industries Engineering & Design (EIED) is responsible for constructing the onshore facilities. The Farzad project is being implemented under a buyback contract, with financing provided by Petropars. Over the past year, Petropars has received no financing from NICO and has invested its own revenues into its projects. Today, our financial resources are limited; therefore, we must spend where there is a clear return on investment.

What is your production estimate for the Farzad field, and when will development be completed?

The Farzad-B field, which we are discussing, is owned approximately 70% by Iran and 30% by Saudi Arabia. The Minister of Petroleum instructed Petropars to pursue the Farzad project as a priority. From a reservoir perspective, both static and dynamic models must be developed, in line with international standards. The static model includes geophysical data, and we have interpreted geological data to strengthen it. Logging results have also been interpreted to determine saturation. The reservoir is the core of development. As the saying goes, a reservoir engineer lives with uncertainty; the art lies in narrowing those uncertainties. Petropars’ highly capable team has worked thoroughly and effectively on the reservoir modeling. Ultimately, we decided to drill eight wells and reach a production capacity of 1 bscf/d (equivalent to 28 mscm/d), which will be processed onshore. Our objective is to reach production within five to six years. Processing facilities are being designed to handle 1 bscf/d of gas.

Do you mean initial production from Farzad is expected in 2030 or 2031?

Yes, that is exactly what we have anticipated in our planning.

Could you also tell us about the Belal field project?

We have begun drilling operations with the goal of reaching production. Our target is eight wells. One appraisal well has already been drilled, and seven additional wells are planned. The Belal jacket has been fabricated and installed, and the DCI drilling rig is already on site. The critical element at Belal is the topside. Once gas production begins, processing will be essential. The topside is currently close to 40% complete. We estimate that drilling will be completed within 21 months, while topside completion will take 18 months. Accordingly, the topside will be installed immediately after drilling is completed. Gas from Belal will be transported via a 30-kilometer pipeline to Platform SPD12A, and from there to shore. Our plan is to produce from Belal for 13 years.

What will be Belal’s production capacity?

Production capacity will vary and depends on wellhead pressure. In gas wells, production is increased by reducing wellhead pressure, which leads to a drop in flowing pressure and necessitates compression. At Assaluyeh, the gas delivery pressure to onshore facilities must be maintained between 68-75 Bar. Below this range, processing would stop, as sweetening requires high pressure and low temperature. Additionally, the relatively high onshore receiving pressure around 75 Bar is also used to reduce temperature by pressure drop. At Belal, we will not require compression for the first approximately 10 years, as production will occur under natural pressure. Compression will be required thereafter. Initial production from Belal will be 500 mscf/d, equivalent to about 14 mscm/d.

Is this figure the result of revising previous estimates?

Yes. In fact, we have extended the recovery period. The original plan was five years at 500 mscf/d followed by three years at 300 mscf/d. However, we now plan three years at 500 mscf/d ,and seven years at 300 mscf/d to extend the field’s productive life. The key

factor was preventing a sharp decline in flowing pressure. As a result, we designed a new production profile that delivers a 9% increase in natural recovery.

Please explain your gas compression projects signed under IPC contracts, given financial constraints.

We did not wait for the contract to become effective, we began work immediately. Our approach is based on Concept-Based FEED, and for now we are proceeding with our in-house engineering team to finalize the best concept. In the next phase, we will need to engage a capable consultant in this field. In my view, engineering must be pursued very seriously. In terms of construction, the first three hubs are prioritized.

At what stage is South Pars Phase 11?

We are the operator of SPD11A, SPD11B and in the near future the operator of the compression facilities for SPD11A, SPD11B, SPD12A and SPD12B. In SPD11A, following a successful roll-up operation and completion of jacket fabrication over the past year, the jacket has now been transferred to Assaluyeh and is awaiting suitable weather conditions for installation. A total of 15 wells are planned in SPD11A, six initially, followed by nine. In SPD11B, drilling of the tenth well has been completed, with two wells remaining. The rig will then be moved to SPD11A. Over the past 14 months, we have drilled one well every three months in Phase 11, which represents a record achieved by our team. Despite sanctions, we have successfully carried out smart pigging on the pipeline from SPD11B to shore. I have repeatedly emphasized that Pipeline Integrity Management Systems (PIMS) must be taken seriously nationwide. With the successful completion of the tenth well on the SPD11B platform, production from Phase 11 has increased from 530 to approximately 860 mscf/d representing a 70% capacity increase over about 15 months.

Will you reach your targets once the compression contract becomes effective?

We have not waited for the contract to take effect. The Ministry of Petroleum is following up on the matter. Sometimes obtaining permits from certain authorities is time-consuming, but we have already started the work.

Can you bring compression facilities for the Hub 1 into operation within the scheduled timeframe?

Hub 1 is extremely important to us because we act as both financier and operator. We will begin work as soon as we are able to place orders for the required equipment. The gas compression platform jacket weighs approximately 6,000 tonnes, the topside weighs approximately 9,000-10,000 tonnes, the power generation jacket weighs approximately 3,500 tonnes, the power generation platform weighs approximately 4,500 tonnes, and the living quarters jacket weighs about 3,000 tonnes, with the platform itself weighing around 3,500 tonnes.
In total, the equipment weighs approximately 30,000 tonnes, equivalent to nearly half of a hub, and this requires extremely precise engineering.

Is Petropars involved in other gas projects?

Yes. We have the Sefid Baghoun / Sefid Zakhour project, for which the Delivery Program and Operational Plan (DPOP) has been extensively developed. Our plan was to develop these fields together with Shahini and Halegan, but ultimately two of the fields were awarded to private companies by National Iranian Oil Co. (NIOC) to enhance the lev el of private sector participation. In Sefid Zakhour, we plan to drill 9 to 10 wells, four of which have already been drilled. In Sefid Baghoun, the target is four to five wells, with one already drilled. Initial production will be around 160 mcf/d, to be increased gradually.

How much will oil and gas production increase once these projects come on stream?

Petropars is responsible for infrastructure, including the construction of jackets, topsides, and surface facilities. We are currently constructing CTEP with a capacity of 320,000 b/d. CTEP consists of four 80,000-b/d crude trains and two gas trains that dehydrate associated petroleum gas using tri-ethylene glycol (TEG) before sending it to NGL 3200. One train was commissioned at the beginning of the new Iranian calendar year, and I hope all units will be completed by the end of the current year. Over the past 15 months, oil production in the South Azadegan field has increased by approximately 60,000 b/d. We have also added approximately 14 mscm/d to South Pars gas production capacity.

Is Petropars active in renewable energy as well?

Yes. For example, in Saveh, we have plans to develop a 500-600 MW solar power plant.

Are the Petropars activities limited to Iran, or are you pursuing international projects?

We are currently active in Venezuela, where we are repairing storage tanks as well as screw and centrifugal pumps. We have made arrangements to ensure that our financial resources are not blocked there, and we receive payments in line with project progress.

Have you participated in international tenders for field development?

Given the energy imbalance in the country, our primary focus is on domestic gas projects. However, Petropars has extensive experience partnering with leading international companies. Domestically, we allocate resources toward quick-yielding projects. At the same time, we have held discussions with several Central Asian countries and Iraq.

Largest Processing Facility Launched

$350mn CTEP to Double Azadegan Processing Capacity

On 25 December, under instruction of President Masoud Pezeshkian and Minister of Petroleum Mohsen Paknejad, the second train of the South Azadegan gas field’s central treatment/export plant (CTEP), as the country’s largest oil and gas processing installation, officially came online. Realized with reliance on 85% domestically manufactured equipment, the achievement enhances crude oil processing capacity there to 160,000 b/d, and marks the removal of a key production bottleneck in South Azadegan. This strategic project not only ensures sustainable production, but also, through planning for the capturing of associated gas by next calendar year, paves the way for green and economic development in West Karun

As one of the National Iranian Oil Co. (NIOC)’s strategic infrastructure in West Karun, CTEP is highly significant in the petroleum industry. The project has been designed and implemented with the aim of creating sustainable capacity for the processing, transportation, and sustainability of crude oil from the South Azadegan field and other neighboring fields. This indicates that once completed, the project will not only meet its primary requirements but also will have the capability to support other oil projects in the region.

At present, 180,000 b/d of crude oil is recovered from the South Azadegan field, the majority of which is processed at CTEP. The operation of this unit has also freed up approximately 60tb/d of capacity from other processing units and increased operational flexibility in the West Karun region. About $350 million has been spent on the construction of CTEP. Overall, the increase in processing capacity from South Azadegan, in addition to supporting domestic development, sends a clear message to regional markets that Iran has the capability to convert crude production into sustainable exports.

At the ceremony, President Pezeshkian expressed his appreciation for the diligent efforts made by the Ministry of Petroleum, as well as the specialists and engineers who made this major achievement possible in the shortest possible time. “I hope that with the continuation of this same strong determination and deep conviction, the path ahead will likewise, with the same speed and momentum, lead to brilliant and anticipated results,” he said.

Sustainable Production

Minister Paknejad said serving as General Contractor for South Azadegan development; Petropars Co. has increased output there by more than 50 tb/d over 14 months.

“The company, acting as the EPC contractor, has successfully completed two trains of CTEP facilities, all of which were achieved under the guidance and leadership of NIOC and Petroleum Engineering and Development Co. (PEDEC),” he said.

Regarding CTEP features, he said, “South Azadegan’s CTEP is the largest oil and gas processing facility in Iran, comprising four processing trains with a total crude oil processing capacity of 320tb/d (80t b/d per train) and about 200 mcf of associated gas. At present, part of this gas is being flared due to the incomplete processing capacity.”

“We expect that this volume of gas would have been captured by the end of next calendar year for delivery to the Hoveyzeh Persian Gulf Gas Refinery (NGL 3200) in order to complete the refinery’s capacity and prevent the flaring of this volume of associated gas,” he said.

Referring to the project as one of the key infrastructures in the West Karun region, Paknejad stated that with the completion of its processing trains, sustainable production capacity in the area will be ensured.

“We have also other fields in the West Karun area, and with the commissioning of CTEP, these capacities will be unlocked, making it possible to increase production in the West Karun region. The processing unit

comprises the main sections of crude oil processing and compression,” he said.

Noting that the first train of this processing unit had come online early this calendar year(to March 2026), he added: “Today, with the commissioning of the second processing train of this unit, the total crude oil processing capacity reaches approximately 160tb/d, and the commissioning of the two remaining trains is expected in the coming months.”

The Minister said at present, in the South Azadegan field, out of a total of 190 drilled wells, 160 wells are in production with an average output of 180tb/d, which is planned to reach 190tb/d by the end of the current calendar year(to March 2026).

“If we track the production increase process over the past 14 months up to now and continuing through the end of the year, we will effectively witness an increase in production of more than 62tb/d,” he said.

Paknejad noted that the produced fluids from this field is received through two gas and oil separation plants (GOSP), each with a capacity of 160 tb/d, located in the northern and southern sections of the Azadegan field. He added that after the initial separation operations, the oil and gas are transferred separately via flow pipelines to CTEP.

“One of the positive effects of commissioning this unit has been the release of 60  tb/d of capacity from other processing units, which makes it possible to increase production in other fields in the region through the drilling of new wells or by carrying out workovers and technical measures on existing wells,” the minister said.

Regarding plans for the gas sector, he said, “The necessary planning has been carried out to complete and put into operation the facilities related to the gas section, with the aim of collecting about 5.6 mcm/d of associated petroleum gas from this field, and sending it to the Hoveyzeh Persian Gulf Gas Refinery (NGL 3200), which is expected to be achieved by the end of next calendar year.”

On the job-creating feature of this project, Paknejad said: “During the construction and implementation phase of the project, on average, employment was created for 1,500 direct workers and more than 2,500 indirect workers through contractors and domestic manufacturers. With the commissioning of this unit, sustainable employment will be provided for 700 local people from the region and Khuzestan Province, which has been one of our long-standing demands in this area so that residents can have jobs and secure their livelihoods.”

Oil Processing Accelerates

For his part, Hamid Bovard, the CEO of NIOC, said CTEP was not merely a plant. “This project is a large industrial complex that has been constructed on an area of approximately 70 hectares,” he said.

He stated that the commissioning of the new processing train at the South Azadegan shared field is an effective step toward strengthening infrastructure, accelerating crude oil processing, and supporting the balanced development of shared fields. He emphasized that more than 85% of the equipment used in this project is domestically manufactured, and about 80% of the workforce employed in it consists of local personnel from the region.

Strategic Significance

Nasrollah Zarei, the CEO of PEDEC, touched on the 25-year record of PEDEC in major petroleum industry projects, saying,“The Company is proud to have brought one of the country’s largest upstream development projects to its final stages and into operation—a project whose completion, after several years, represents a significant milestone in increasing oil production.”

On the significance of this project, he said: “After 2016, this is the first major project in the oil industry focused on increasing production, and the realization of a megaproject or super-project at this point in time carries high strategic importance for the country’s oil industry.”

He noted that, in this project, the localization of manufacturing non-metallic pipes was, for the first time, placed on the agenda of PEDEC, and fortunately this effort has now entered the production phase. He added that the main equipment of this specialized unit, including the desalters and furnaces, has been manufactured in Ahvaz.

Symbol of Management

Hamid Reza Saqafi, the CEO of Petropars Group, touched on the significance of expanding processing infrastructure in South Azadegan, saying, “The central processing unit of this field is responsible for carrying out the processes of separating water, salt, and sediments, controlling hydrogen sulfide levels, and regulating vapor pressure.”

“With the commissioning of the second train of CTEP and the gradual return of wells to operation, the pace of sustainable production at this field has accelerated,” he added.

“Over the past 15 months, Petropars Group, in cooperation with the Ministry of Petroleum, NIOC, and PEDEC, has carried out numerous projects in the areas of drilling, completion, and acidizing of 12 wells, as well as the commissioning of wellhead facilities for 30 wells,” said Saqafi.

Referring to complementary measures in the well sector, he stated that pump installation operations will begin soon, and with the gradual return of wells affected by production fall-off or shutdown to operation, the field’s production capacity will increase on a sustainable basis.

“Today, South Azadegan is regarded as a symbol of effective construction management, the safeguarding of national resources, and reliance on domestic expertise and capabilities,” he added.

The commissioning of Phase II of the CTEP stands as a symbol of the oil industry’s commitment to the balanced development grounded in indigenous capabilities. With an investment exceeding $350 million and the extensive employment of local labor, this project will have a significant impact on the economy of the West Karun region and on achieving national production targets. Overall, this megaproject is not merely a numerical increase in oil processing capacity; it is a decisive affirmation of Iran’s industrial self-sufficiency in supplying key equipment for this industry and critical infrastructure for attaining the country’s long-term oil field development objectives.

Bahregan, Strategic Hub of Iran Offshore Oil Supply

The Bahregan oil area, with a history dating back to the first offshore oil exploration contracts in the 1950s, is recognized as one of the key and strategic hubs for oil production and export in Iran. Today, through the implementation of projects such as production and export operations, flaring mitigation, and environmental protection initiatives, the region underscores its commitment to sustainable development.

Iranian Offshore Oil Company (IOOC) is responsible for prospecting and recovering from oil and gas fields across a vast area of the waters of the Persian Gulf, as well as the Gulf of Oman. The company operates six oil zones: Bahregan, Kharg, Siri, Lavan, Kish, and Qeshm.

Meanwhile, the Bahregan oil region (located between the ports of Genaveh and Deylam in Bushehr Province) is regarded as one of the important areas with a rich historical and strategic background in oil production and exports.

From a historical perspective, in 1951 the contract for the exploration and exploitation of offshore oil concluded between National Iranian Oil Co. (NIOC) and the Italian company AGIP Mineraria. On 24August 1957, the relevant legislative bodies: the National Consultative Assembly and the Senate approved the contract.

Under this agreement, the parties jointly established an Iranian company, with equal capital contributions, named the Iran-Italy joint venture SIRIP. Three areas – the continental shelf of the Persian Gulf, the eastern slopes of the central Zagros Mountains, and the coastal region of the Gulf of Oman – covering an approximate area of 22,900 square kilometers, were placed under the company’s control to carry out oil exploration, production, and sales for the benefit of both parties in these regions.

The contract also included the development and exploitation of the oil resources of the Bahregansar oil field, which effectively came to fruition in 1960. In order to ensure regular production and export of Bahregansar oil, permanent export facilities became essential; therefore, the Bahregan Oil Center, which served as the export base for Bahregansar oil, was made operational and officially inaugurated on 19 April 1964. After the Islamic Revolution, this area was expanded and currently includes several important oil fields such as Soroush, Norouz, Hendijan, and Bahregansar.

Gholam Hossein Emami, the head of Bahregan production operations, told “Iran Petroleum” that the Bahregan region, as one of the country’s most strategic hubs for offshore oil production and processing, is implementing numerous projects aimed at reducing flaring and paying due attention to environmental concerns.

Oldest Offshore Area

Referring to the historical background of Bahregan, Emami said: “The Bahregan area is the oldest offshore oil region on Iran’s continental shelf. The first well in this area was drilled in 1960, and crude oil processing operations began in 1961. At that time, there was no formal organizational structure for IOOC, and the islands of Kharg, Bahregan, Siri, and Lavan each operated under the supervision of multinational companies.”

He added that these companies were merged in 1979, leading to establishment of IOOC, which would include Qeshm and Kish, too.

Emami said that Bahregan was organized as the first and oldest region run by IOOC. Subsequently, fields such as Hendijan and Norouz, and later in the post-revolutionary period Soroush as well, were added to this complex. Prior to the Revolution, Soroush was managed under the Kharg region, but after the implementation of the comprehensive development plan for the Soroush and Norouz fields, and due to the similarity in the quality of crude oil from these two fields, they were incorporated into the Bahregan region.

Current Structure

Emami said that currently, the four fields of Bahregansar, Hendijan, Soroush, and Norouz are under the production operations of the region. Oil extracted from the Bahregansar and Hendijan fields is combined and, after initial gas separation, is transferred onshore, where it undergoes further processing in desalting units. In line with these operations, there are two routes for exporting the crude oil from these two fields: either it is exported offshore via a Single Point Mooring (SPM), or it is sent to the Gureh pumping station (a village in the Imam Hasan district of Deylam County, Bushehr Province), and from there transported to Kharg Island.

Noting that Soroush and Norouz crude oil was unique in terms of processing, he said: “In the Norouz oil field, initial gas separation is carried out offshore, after which the crude oil is transferred to the Soroush oil platform. There, the desalting of Norouz crude oil is performed, and the gas separation and desalting processes for Soroush crude oil are also carried out. Ultimately, the oil produced from both the Norouz and Soroush fields is transferred to the Persian Gulf floating terminal, where it is stored. Export tankers receive their crude oil cargo from this terminal. Therefore, these two oil fields have no processing dependence on onshore facilities and rely on land facilities only for logistical support.”

“In the Bahregansar and Hendijan oil fields, crude oil is transported onshore via a 16-inch pipeline. At the Bahregan facility, once final desalting operations

are completed, the oil is dispatched through two routes: either exported offshore via an SPM, or sent to the Gureh region through a 24-inch pipeline,” he added.

Bahregan Area Advantage

Touching on the relative advantage of Bahregan, Emami said: “The region has the strategic capability to serve as both an inbound and outbound hub for crude oil. In addition, the Bahregan region may function both as a receiver of crude oil from other areas and as an exporter. For example, for a period we received and stored crude oil from the Azadegan oil field via the Omidiyeh pumping station. We are also able to receive and export oil by SPM. For these reasons, it is a strategic region that can act as a central hub for imports and exports. Moreover, during the eight years of the imposed war, this region received petroleum products from abroad and from here supplied the front lines with fuel.”

“During the period of sanctions as well, we received South Pars gas condensate via SPM, then stored it and blended it with the extra-heavy crude oil from the Azadegan field. The resulting blend, marketed as synthetic light crude oil, was sent to domestic refineries such as the Isfahan refinery, refineries in northern Iran, Tehran, and in some cases the Abadan refinery. In fact, Bahregan was the only region in Iran that carried out this operation,” he added.

Moreover, crude oil from the Bahregansar region falls into the category of medium-light to medium-heavy crudes, whereas Soroush and Norouz crude oils are classified as extra-heavy. In fact, out of Iran’s five export crude oil grades, two belong to the Bahregan region.

Active Wells

Emami stated that there are 71 active wells in the Bahregansar region and noted that production from the Bahregansar and Hendijan fields is carried out under natural reservoir pressure. He added, however, that fields such as Soroush have produced oil using downhole pumps from the outset, and that the Norouz field requires the installation of downhole pumps.

Stating that plans are underway to install downhole pumps in five wells in the Norouz field in order to maintain and enhance production, he said:” the installation of these pumps will boost the field’s output by 3,000 b/d”. Overall, an increase of approximately 3,900 b/d in production is expected in the Bahregan operational region within the next year.

Enhanced Recovery Investment

A key point underscored by Emami is the continuous erosion and degradation of equipment in offshore wells. In this regard, he explained that older platforms need to be reinforced so that drilling rigs may safely berth alongside them. Electrical panels and downhole pumps also need to be procured. After these steps, a permanent rig must be stationed in the area to carry out pump replacements. Emami identified the most significant challenge in field development as securing domestic and foreign investment, stating that modern enhanced oil recovery (EOR) methods such as polymer injection or other state-of-the-art technologies require substantial capital as well as foreign equipment.

Flare Gas Recovery

On flaring in Soroush and Norouz, Emami said: “In these two fields, the rate of flaring is very low because the sweet gas is fully consumed in the turbines, and any surplus is sent to the Abuzar platform. The gas from these fields is completely sweet and could be used in the turbines without any issues. Overall, flaring in the Soroush and Norouz fields is minimal.”

Gas Production

Emami stated that the Soroush field produces about 4.5 mcf/d of gas, of which 3.5 mcf/d is consumed by turbines, and only 1 mcf/d to 1.5 mcf/d is sent to the Abuzar platform.

The Nowruz field produces 8 mcf/d of gas per day, with 7 mcf/d delivered to Abuzar. The Hendijan field also has a production of about 6 mcf/d.

Emami said that, in total, Hendijan and Bahregansar fields produce around 17 mcf/d to 18 mcf/d of gas, and with the completion of ongoing projects, the majority of this gas will be removed from the flaring cycle.

Environmental Concerns

Asked what measures have been undertaken to reduce flaring, Emami said: “The country’s overarching policy, particularly under the current administration, is to move toward reducing and ending gas flaring. In line with this approach, turbine exhaust gases are continuously monitored, and the Department of Environment (DOE) conducts periodic sampling. If emission levels exceed established standards, we are notified, and when necessary, the required filters are installed.”

Regarding industrial wastes, he said: “Fortunately, in the Norouz field there is no direct discharge or release of industrial effluent into the sea. All outgoing water and industrial wastewater are transferred to the Soroush field, where, by using disposal wells, all effluent is disposed of in a controlled and standard manner, ensuring that no pollution is released into the marine environment.”

He went on to say that in the onshore section as well, industrial and sanitary wastewater is under continuous monitoring, and in case any parameters fall outside the authorized limits, immediate corrective actions are taken.

Emami described Bahregan as one of the most successful offshore regions in terms of green space development, stating that over recent years Bahregan  ranks the first in terms of planting trees among offshore regions. In addition to internal areas of the region, tree-planting initiatives have also been implemented along roadsides and in the surrounding areas as part of the company’s social responsibility efforts. He emphasized that while environmental requirements urge them to comply with standards, their activities go beyond mere compliance, and they have undertaken extensive voluntary measures, as well.

Energy Efficiency

Touching on measures aimed at saving on water and electricity consumption, Emami said: “Over recent years, serious improvements have been made to consumption patterns, leading to a significant reduction in water and electricity use, with consumption in some sectors declining to a considerable extent.”

Emami’s remarks indicate that, in addition to its historical legacy, the Bahregan operational region is today one of the country’s most critical hubs for offshore oil production and processing. It is a region where all oil production operations in the Soroush and Norouz fields are conducted entirely offshore, flaring-reduction projects are progressing rapidly, and in the environmental domain, continuous monitoring is in place with no wastewater discharged into the sea. Moreover, development of greenery and efficient energy use are considered among the core priorities.

Soroush Oil Platform, a Gem in Persian Gulf

Soroush oil field, one of the largest in Iran, lies southwest of Kharg Island and approximately 110 kilometers from Bahregan, near the country’s southern borders in the Persian Gulf. Oil production in this area dates back to the 1960s. Before the 1979 Islamic Revolution, this oil platform was part of the Kharg region, and after the Revolution, it was annexed to the Bahregan region along with the Nowruz field.

With the outbreak of the imposed War and the damage caused by military attacks, operations at this platform halted. The reconstruction and development project of the Soroush oil field began in 1999, and finally, with the cooperation of Shell and Iranian specialists, production resumed in 2001. Possessing vast energy reserves, the Soroush oil field plays a vital role in the country’s crude oil production and export cycle.

Over the past decades, through precise management of extraction and development, the field has been able to maintain stable production and continuous exports despite sanctions and technical limitations.

The sea journey to the Soroush oil platform was a pleasant experience, an encounter with personnel who seemed, with genuine kindness, to have formed a large family known as “Soroush.” Their friendliness was evident in their eyes and words. From the calligraphy adorning the doorways of the rooms to the flowers planted on the industrial structures, I felt a deep sense of care and affection.

As one of the Soroush personnel put it: “Our organization is more than just a workplace; a sense of family prevails among the employees. Colleagues eat together; engage in group activities such as watching movies and playing games in their leisure time, and stand by one another during various occasions and ceremonies, whether in times of joy or in other events. Fortunately, this solidarity and collective spirit have been preserved as the organization’s most valuable asset.”

In such an atmosphere, I met with Alireza Nezamian, the manager of the Soroush oil platform, for an exclusive interview with “Iran Petroleum”, in which he discussed the geographical and historical background of the field and outlined the most important measures taken in the areas of processing, extraction, and oil export.

Water Borders

Stressing the strategic position of the Soroush oil platform, Nezamian stated: Soroush is located about 80 kilometers from Kharg Island and is considered our closest oil field to the shared borders of Saudi Arabia and Kuwait. Unlike the jointly-owned Forouzan and Arash fields, this field lies entirely within Iranian waters and contains one of the country’s largest oil reserves.

“The Soroush field entered the production cycle in the early 1960s. Before the 1979 Islamic Revolution, the central platforms (also known as Old Soroush) and the Pasargad terminal played a central role in processing the heavy crude oil of this region,” he said.

On the capacity of these facilities, he said: “With an estimated reserve of more than 11 billion barrels of oil in place, the field ranks among the largest oil fields in Iran.”

Unique Features

Nezamian highlighted a major technical challenge associated with the oil recovered from Soroush, saying: “Due to the extremely high viscosity and complex nature of this crude oil, it cannot be transported to shore by pumping. In most of the country’s oil platforms, the extracted oil is transferred to onshore facilities via pipelines; however, in the Soroush field, because of these unique technical characteristics, all stages of processing and oil transfer are carried out entirely offshore.”

Oil production from the Soroush field was halted in the early 1980s due to Iraqi strikes and damage inflicted on several wells, and this situation continued until 1999 when the development project of the Soroush and Nowruz fields was launched with the participation of Shell.

“Due to its proximity and an approximate distance of 50 kilometers from Soroush, the Nowruz field carries out part of its degassing processes there (at Soroush), and the remaining stages of crude oil processing are completed at the Soroush field,” Nezamian said.

Regarding the structure of Soroush, he explained: “The production platforms, along with the residential and operational platforms, were first constructed onshore and then installed on the jackets at sea using heavy equipment. The weight of the main platform together with its components reaches 11,000 tonnes, a mass that makes relocation with conventional cranes impossible and necessitated the use of heavy-lift installation vessels.”

Extraction, Processing and Export

Nezamian noted the multipurpose role of this platform, saying: “At the Soroush platform, in addition to carrying out the processing and export of oil from the Nowruz field, the extraction, processing, and export of oil from the Soroush field itself are also performed.”

“At present, 18 wells are active in this field. Soroush is among the fields that have used downhole pumps for oil production from the very beginning,” he said.

He also touched on solutions for increased production, saying: “Managing the oil production rate from each well is critically important. If production exceeds the permissible limit, the percentage of water produced alongside the oil, technically referred to as “water cut”, increases, causing the well to quickly start producing water. This, in turn, leads to a sharp decline in production rates. To maintain the current production capacity, we closely monitor both the drilling of new wells and the precise management of existing ones.”

“Our current operational plan includes drilling two new wells to enhance production

capacity. In addition, academic studies aimed at enhancing the ultimate oil recovery factor are under review; however, implementing this approach will require substantial investment and the application of advanced technologies,” he said.

Technical Self-Reliance

Nezamian said Iranian engineers proved to be self-reliant despite restrictions caused by sanctions. 

“In the early 2010s, with the imposition of restrictions, procuring foreign spare parts became a severe challenge, to the extent that many critical pieces of equipment, such as turbines and instrumentation systems, were left without any technical support. Nevertheless, relying on indigenous expertise, domestic specialists succeeded in carrying out major overhauls on turbines, compressors, and other vital equipment. Thanks to the range of measures implemented by Iranian experts on the platform, production at the Soroush field has continued without any interruption,” he said.

This level of technical self-sufficiency clearly demonstrates the high capability of Iranian engineers in maintaining production stability under the most challenging operational conditions.

HSE Regulations

Given their complex operating environment, characterized by extremely high operating pressures, elevated temperatures, and multiphase conditions (oil and gas), the Soroush platforms require the use of advanced safety systems. Accordingly, fire suppression systems, gas detection systems, and emergency shutdown (ESD) systems have been installed across all facilities to ensure the immediate halt of production in critical situations and to minimize potential risks to personnel and equipment.

“Sensor and control systems continuously (24/7) monitor vital parameters such as pressure, fluid flow rate, and liquid level, and any deviation beyond permissible limits will trigger activation of the emergency shutdown system,” said Nezamian, adding: “This accumulated operational experience over many years has been a fundamental factor in maintaining the successful track record of these platforms and preventing the occurrence of any serious and high-risk incidents.”

Underscoring the role of manpower, he said: “For many years, our specialists have succeeded in maintaining these systems in ideal operating conditions despite equipment limitations and the lack of external support. For example, if a pressure drop occurs in a pump, protective switches immediately take that unit out of service to prevent further damage. In fact, the intelligent management and maintenance of these safety systems are considered a hallmark of the skill and expertise of the personnel stationed on the platforms.”

Nezamian stated that Soroush heavy crude, despite challenges arising from sanctions, has always attracted loyal and well-defined buyers, stressing that even in the most difficult years, such as 2019, Soroush oil consistently maintained its buyers. He added that even if production costs in the Soroush field have increased, the field is still considered one of the lowest-cost offshore oil production areas in Iran.

Overview of Soroush Platform

After concluding the interview, I visited the complex’s control room. According to those working in this unit, the gas separation, dehydration, and desalting operations are carried out in an integrated manner in the control room to ensure that the crude oil meets the required export standards in terms of salt and water content. The recovered gas, after softening and pressure regulation processes, is used as fuel for the turbines and for supplying the platform’s power generation needs, with part of it being transferred to the Abuzar platform for power generation purposes.

One of the beauties of the Soroush platform on the seabed was its structural design, which shone like a yellow jewel in the turquoise waters of the Persian Gulf. Moreover, the movement of personnel in red and blue uniforms across the yellow industrial structure against the vast blue expanse of the sea was like a divine painting upon the earth.

“Some platforms are designed with a tiered structure, while in others the platforms are arranged at different elevations without a clearly defined deck layout. For example, the Salman platform employs a specific design style, whereas the Soroush platform is implemented as a fully multi-deck structure, a feature that also creates advantages in certain technical aspects,” said a staff member.

This type of design is instrumental in operations, maintenance, and even safety; details such as equipment layout, evacuation routes, prevailing wind direction, and safety requirements have all been determined based on a systematic and well-engineered design.

Another technical attraction of the platform was the offshore well-drilling operation, which had to be carried out with great precision and sensitivity. In a sense, the very raison d’être of the platform lay in the presence of the wells, which required daily review and analysis by the technical team. During a visit to one of the wells, the platform’s technical team referred to “Christmas tree” to describe the wellhead’s visual appearance, as it stood firmly on the platform like a Christmas tree with many branches.

Nezamian said: “Production wells are equipped with numerous control devices to ensure safe production operations. These include pistons that shut off the flow of oil in the event of any problem, as well as throttling valves that regulate the flow to the required level, ensuring that the production process remains balanced and stable.”

In response to a question about power supply to downhole pumps, he said: “This is carried out through three supply phases, and optimal reservoir production is managed based on engineers’ assessments and natural or artificial pressure conditions, to ensure the safety and stability of oil production.”

Another section of the platform was the electrical room, similar to the control room. The flow of oil, water, and gas production is continuously measured and monitored in the electrical room. According to the person in charge of this unit, data from each well are transmitted via flowlines to the separators, and parameters such as the percentage of water, salt, and gas in the oil are monitored, based on which the required decisions are made to reduce and/or increase the production flow.

The final section I visited was the mechanical maintenance unit. Whereas a large portion of the parts had to be manufactured on the platform itself, the work of this unit was of great importance. When I asked the personnel about their work, one of them, with oil-stained and blackened hands, said, “The Soroush platform is self-sufficient.” That single sentence encapsulated their efforts toward self-reliance and production for Iran.

Conclusion and Future Vision

Soroush oil field is a prominent instance of the successful management of an oil reservoir under complex conditions filled with technical and political challenges. This significant achievement is the result of a combination of deploying advanced operational technologies, precise management of well production rates, the capability of domestic specialists to maintain and repair equipment, and the strict adherence to safety standards.

Accordingly, this field has managed to play a vital role in the country’s sustained oil production and exports. The outlook of the field, with a focus on operations such as drilling new wells, will bring about enhanced production capacity, and further solidify its position as one of the main pillars of Iran’s oil industry.

Persian Gulf FSU, Beating Heart of Oil Exports

Younes Sadeghi

Across the calm, azure expanse of the Persian Gulf, in the vicinity of the Soroush oil platform, lies a vast facility known as the Persian Gulf Floating Storage Unit (FSU), a haven for the storage and transfer of millions of barrels of Iran’s crude oil. This colossal vessel, built and commissioned by the skilled Iranian specialists, has shouldered the nation’s ceaseless export load since the very first days of its operation, and stands as a shining symbol of resilience, self-reliance, and national technical expertise in the tough era of sanctions.

Introduction

The Persian Gulf FSU, which is one of the largest terminals of its kind ever built in the world, is located adjacent to the Soroush oil platform in the Bahregan region of Bushehr Province. This facility is 337 meters long, 60 meters wide, 33 meters high, and weighs more than 51,400 tonnes. It is equipped with 21 storage tanks, with a final storage capacity of up to 2.2 million barrels. Considering the defined service life of this floating export terminal and its double-hull structure, the likelihood of accidents, oil leakage, and pollution of the waters of the Persian Gulf is kept to an absolute minimum.

Iranian Offshore Oil Company (IOOC), which operates the six regions of Bahregan, Kharg, Lavan, Siri, Kish, and Qeshm and the crude oil production platforms in the Persian Gulf, transports its produced oil via pipelines to operational areas, and from there ships it to export destinations. However, the oil produced from certain fields, such as Soroush and Nowruz, after production and processing on offshore platforms, is sent to FSU for storage and direct export from the sea.

The facility designed in line with state-of-the-art technology and in compliance with global standards. It was completed at the end of 2011, with Samsung of South Korea as the main contractor, and STX as the vessel construction contractor.

Given the global conditions, and the sanctions imposed on Iran at the time of the terminal’s deployment, the completion of the pipeline and manifold (PLEM) operations, and the connection lines to the Soroush platform, as well as the mobilization of manufacturers of specialized equipment to carry out final commissioning tests and bringing the terminal into operation, was delayed two years.

For the installation of the massive FSU, extensive and complex operations were carried out by domestic specialists under the guidance of experts from Samsung of South Korea. In the course of these demanding and intricate operations, in addition to various pipeline installations, the connection between the PLEM manifold and the terminal was also successfully established.

With its green-colored deck and interwoven industrial structures, the FSU is itself a narrative of the historic efforts of the Iranians in the realm of international trade. This colossal vessel, set against the azure shores of the Persian Gulf, evokes a storied era in the Bahregan region, when textiles known as Seneezi were exported from this land to the Islamic world. Today, it is IOOC that holds the helm of offshore oil exports, inheriting and carrying forward this legacy of distinction in the energy sector.

In early December, after a five-hour journey from Bahregan, I arrived at the Persian Gulf FSU at a captivating sunset. From the very first step, the sheer mass of pipelines and large industrial components spread across the ship’s calm deck attracted my attention. Strict safety regulations and warnings broadcast over the vessel’s loudspeakers were mandatory for everyone. The rotational lifestyle of the personnel, along with the friendly conversations flowing in the dining hall and along the multilayered corridors leading to the living quarters, painted a clear picture of the cohesion and solidarity that define the complex’s working structure.

With the sunrise and the beautiful reflection of the ship’s deck shimmering on the azure waters of the Persian Gulf, I went to meet Ali Reza Afrasiabi, director of the Persian Gulf FSU, so that in an exclusive interview with “Iran Petroleum”, he could elaborate on the key activities of the facility in the oil storage and export domains.

No Halt in Oil Exports

Referring to the history of export infrastructure in the zone, Afrasiabi said: “Before the commissioning of the Persian Gulf FSU, oil export operations in this region were carried out through a terminal known as Sorena. However, with the escalation in export capacity in the area, it was decided that a larger floating terminal would replace Sorena.”

While referring to the overhaul and equipment maintenance as one of the challenges of this FSU, Afrasiabi added that unlike conventional oil tankers, this vessel does not have the ability to periodically return to shore, which makes the maintenance and repair process significantly more completed.

Specifically referring to the design of the FSU facility, he said: “In the initial design of the Nowruz field, the objective was for the oil from the Soroush and Nowruz fields to enter separate tanks through independent pipelines and be exported in a segregated manner. However, with the increase in production at a certain

point in time, the oil from these two fields was blended in the tanks, resulting in a single grade known as Soroush crude. Today, this grade is fully exported and is recognized as a well-known brand on the global market.”

“At present, Soroush crude is considered primarily an export oil; however, at certain times and in response to strategic needs, a portion of it has been supplied to domestic refineries,” he said.

Offshore Processing

Afrasiabi touched on the unique role of Soroush and Nowruz fields’ oil that is delivered into the FSU, saying: “In this facility, unlike the common practice across the country, all stages of crude oil production, processing, storage, and export are carried out entirely at sea. The extracted oil, without the need to be transferred onshore, is prepared directly for export loading.”

“In most of the country’s oil fields, the produced oil is first transported to shore and then processed before being made ready for export. By contrast, in the Soroush and Nowruz oil fields, the separation of water, salt, and gas is performed offshore, and once the crude reaches the required quality, it is prepared for delivery to global markets,” he added.

Exports Up and Running

Afrasiabi said: “Despite all the restrictions imposed by sanctions, over the past 10 to 12 years not a single instance of stoppage or delay has been recorded in the oil storage and export chain at the Persian Gulf FSU, and export operations have continued in a fully uninterrupted manner.”

He identified human capital as one of the greatest strengths of this complex, stating that in the early years of the development of the Soroush and Nowruz fields, extensive specialized training and technology transfer programs were implemented.

“This coherent planning enabled Iranian personnel to assume full operational management of these sites within a short period of time,” he said, adding: “Even today, despite all the challenges and difficulties, it is this same skilled and committed workforce that stands on the front line and prevents any interruption in oil exports from the FSU.”

Control Room

During the visit, in the control room, filled with large and small monitors and staffed by several operators seated at the relevant systems, Mr. Khabbaz, the shift supervisor of the Persian Gulf export terminal, kindly explained the operational processes. He noted that the incoming oil is stored in the storage tanks. Although these tanks are interconnected by pipelines, their operation and storage processes are managed independently and in a segregated manner.

Reiterating the significance of precise planning in storage and loading, he said: “The distribution of oil among the tanks and the sequence of pumping to the tankers are planned in such a way that no abnormal stress or pressure is imposed on the hulls of the receiving vessels. All of these critical decisions are made in real time in the control room, based on prevailing operational conditions.”

On the vital importance of the control room, he said: “All stages of loading, from the selection of storage tanks and the sequence of oil transfer to the precise control of pumping and cargo balance, are monitored and managed in real time in the terminal’s control room.”

Referring to the operational flexibility of the FSU, he said: “The Persian Gulf FSU has the capability to berth and load oil tankers of various sizes, and the loading volume is always adjusted and carried out in accordance with the issued guidelines.”

Engine Room

One of the most striking sections of this floating export terminal is its engine room. According to the head of the unit, the engine room functions as the ‘beating heart of the terminal.’ After descending a series of multi-part stairways, it becomes evident that this section extends to a depth of 15 meters below the water surface and is considered one of the most robust parts of the floating structure.

One of its main functions beneath the sea is cooling the machinery. Below this unit, several storage tanks have been installed for internal use and wastewater collection. In addition, based on the explanations provided, the vessel has a double-hull structure, which uses seawater for maintaining balance and for storage purposes.

The noise of the engines was so loud that I could barely hear what the engine room supervisor was saying. We entered this engine room in the last month of autumn, when the weather is cool, yet I believe the temperature inside the engine room was very high. The engine room supervisor, whose voice I could hardly make out because of the running engines, said: “The energy required for pumping crude oil to the export vessels is supplied in this section. The fuel used by the complex includes fuel oil and diesel; by generating steam and electricity, the export turbopumps are put into operation, ensuring a stable crude oil export process.”

Referring to the tough operating conditions of the FSU, especially during the hot months of the year, he emphasized: “During the hottest hours of summer, particularly in August, the ambient temperature in the engine room can reach between 50 and 55 degrees Celsius, and the heat index can rise to as high as 120 degrees Celsius. Under such conditions, no one can stay in this environment for more than 20 minutes. For this reason, precise technical measures have been put in place to control thermal conditions and ensure the safety of both equipment and personnel.”

After this conversation, I stepped onto the most beautiful part of the vessel—the green-colored deck. On this deck, a dense network of interwoven pipes stood out like a magnificent peacock against the azure waters of the Persian Gulf. Although the deck was completely silent, oil processing operations were still underway. Even so, the sea evoked in me a sense of calm and security, a calm born of the fact that, despite the many constraints imposed on this industry by sanctions, the workers of Iran’s oil sector have consistently managed not only to enhance their own capabilities but also to prevent any halt in the production and export of Iranian oil.

The Persian Gulf FSU is more than a simple technical infrastructure; it is a symbol of expertise, team cohesion, and resilience in the face of harsh environmental conditions. The terminal’s uninterrupted and stable operation for more than a decade, relying on skilled and dedicated human capital, highlights its vital role in sustaining Iran’s oil exports and supporting economic development more clearly than ever.

An on-site visit to the advanced control room, the challenging engine room, and the operational deck clearly revealed the depth of technical expertise and the round-the-clock efforts of the personnel in an environment constantly affected by the sea’s motion and fluctuations. This facility is not only a masterpiece of petroleum engineering, but also a symbol of national commitment to safeguarding national energy flow.

Refining Industry Output Up 9 ml/d

Mobina Mahinkhaki

A review of the developments observed in the refining industry over the past year shows that even without implementing new development projects; it is possible to increase the production capacity of key petroleum products significantly by relying on targeted maintenance, rebuilding critical units, and improving feedstock stability. The set of measures taken in the country’s refineries during this period presents a clear picture of technical capability, sustainable management, and effective use of existing capacities, a trend now reflected in gasoline and diesel output, which has played an important role in strengthening the nation’s energy balance.

Output Hike Equal to New Refinery

Over the past year, production of gasoline and diesel has been one of the most notable achievements in the national refining industry. Such growth, achieved without adding any new refineries but through improved efficiency, upgrading of process units, and uninterrupted feedstock supply, has led to a significant rise in output of these two major products. Official data show that from September 2024 to September 2025, gasoline and diesel production increased by 9 mb/d. According to Mohammad-Ali Dadvar, a deputy CEO of the National Iranian Oil Refining and Distribution Co. (NIORDC), this increase is “equivalent to the daily output of a 100,000 b/d crude oil refinery.”

According to the refineries’ performance report, motor gasoline production over the past year increased 4.3 ml/d to reach 102.3 ml/d.

A similar trend was recorded in diesel output: average production during the same period grew by 4.7 ml/d, increasing from 111 ml/d to 115.7 ml/d.

This simultaneous growth in both key products has occurred despite the fact that no capacity-expansion projects came online during this period. Dadvar explains that this achievement “has been realized entirely through improved unit performance and enhanced equipment reliability,” demonstrating that, with timely maintenance and stable operations, the actual production capacity of the country’s refineries has considerable potential for further increase.

A comparison of the data pertaining to the first half of the current and past calendar years confirms the same trend. Gasoline production during this period, despite the complete shutdown of the Shazand Arak refinery’s RFCC unit for overhaul, increased from 98 ml/d to 98.5 ml/d. In the diesel sector, average output rose from 112 ml/d in the first half of last calendar year to 115 ml/d in the same period in the current calendar year (to 21 March 2026).

Together, these figures show that the country’s refining industry, during a time when consumption peaked in many phases, such as Nowruz, summer, and emergency conditions caused by the recent 12-Day War, managed not only to maintain production but to increase it, helping to ease some of the pressure on the nation’s energy balance.

Feedstock Supply

The increase in the refinery feedstock over the past year has been one of the main pillars behind the growth in gasoline and diesel production. This improvement, achieved without launching new development projects but through increasing the share of crude oil delivered to refineries and ensuring more stable supply, has strengthened the country’s production capacity. Official data show that the average refinery feedstock from September 2024 to September 2025 rose by 72,000 b/d, increasing from 2.287 mb/d to 2.359 mb/d.

This increase in feedstock, an amount considered significant in the refining industry, has paved the way for higher operational capacity at refineries and directly boosted the output of major petroleum products. According to Dadvar, “the higher feedstock levels, especially during the months when the main units were operating at full capacity, played a decisive role in offsetting the pressure from high consumption and demand fluctuations.”

A comparison of performance in the first six months of the current and past calendar years confirm the same trend. In the first half of last calendar year, the feedstock delivered to refineries averaged 2.302 mb/d while during the same period in the current calendar year, this figure increased by 19,000 barrels to reach 2.321 mb/d.

This sustained growth reflects the stabilization of feedstock flow and optimal management of pipeline capacity and upstream facilities. Alongside higher production, it has enabled a better response to domestic demand and reduced pressure on operational inventories.

The increase in feedstock has also played a key role in strengthening refinery flexibility, helping offset short-term constraints, especially during the overhaul of critical units. This trend shows that the refining industry, without relying on new development projects, has been able to enhance its operational capacity through effective resource management and improved performance.

RFCC Reconstruction

Alongside increased production and higher refinery feedstock, the complete overhaul of the RFCC unit at the Imam Khomeini (Shazand Arak) refinery has been among the most important technical achievements of the refining industry in the recent period. This unit, which in the past years had experienced a noticeable decline in gasoline and diesel production capacity due to the lack of long-term major maintenance, required a fundamental intervention for its continued operation.

This unit, which over the past 13 years had undergone only emergency repairs, had begun to show signs of declining performance in recent years, and its gradual loss of efficiency was affecting the country’s gasoline production balance. According to Dadvar, “continuing under these conditions, in the medium term, could have led to the unit’s shutdown and a significant reduction in gasoline supply. Therefore, its full overhaul was a necessity, not a choice.”

According to the planned program, the overhaul was carried out on a scale that included the complete renovation of all components, equipment, and internal and external parts of the two main reactors of the RFCC unit. This operation, which was implemented despite the challenging consumption conditions in the first half of the current calendar year, prevented the risk of a long-term shutdown of the unit.

Because of this extensive overhaul, the Arak RFCC unit was out of gasoline production from early August 2025, a fact clearly reflected in the refineries’ performance data. Nevertheless, despite the shutdown of this major unit, the refining industry was able to maintain, and in some months even increase, total gasoline output, an outcome directly driven by higher feedstock supply and increased production from other refinery units.

The complete overhaul of this unit will reestablish the Shazand’s position on the country’s gasoline production map. According to expert assessments, once it fully returns to operation, the Arak refinery’s gasoline production capacity will increase significantly, helping to ease part of the demand pressure during peak-consumption months.

The set of actions taken over the past year shows that, without increasing nominal capacity and relying solely on overhauling key units, optimizing feedstock, and improving efficiency, the refining industry has managed to raise total gasoline and diesel production by an amount equivalent to that of a 100,000-b/d refinery. The complete overhaul of the Arak RFCC unit, the sustained growth in the feedstock, and the maintenance of production during peak-consumption periods form a set of policies that have strengthened fuel supply stability and stabilized the country’s energy balance in the first half of the current calendar year. These achievements demonstrate that focusing on maintenance, improving the performance of existing units, and utilizing domestic capabilities has been the most effective short-term path for increasing production and managing seasonal demand.

Kermanshah Refinery Headed to Throughput Upgrade

The Kermanshah oil refinery was established in 1922, only two years after the Abadan refinery began operations, and as the Iran’s second refining unit, it played a historic role in shaping the country’s refining industry. Initially, the refinery had a capacity of only 2,000 b/d, with its feedstock supplied from the Naft-Shah field (present-day Naftshahr). In the 1960s, as the fuel demand grew in western Iran, a modernization and expansion program began with the cooperation of the American company UOP and European contractors, increasing its nominal capacity to 15,000 b/d by 1971.

In the years following the 1979 Islamic Revolution, especially during the Imposed War, the Kermanshah refinery, as the main fuel supply center for western regions of the country, was targeted by numerous airstrikes. Despite severe damage, the Ahvaz-Asmari and Serkan-Malehkuh pipelines were constructed in 1983 to supply crude oil to the refinery so that its operations could continue without interruption. After reconstruction, the refinery’s operational capacity reached around 19,000 b/d, and with the development of new units, its role in regional energy stability was gradually reinforced.

Current Capacity

The Kermanshah refinery currently operates with an operational capacity of 25,000 b/d, supplying more than 60% of Kermanshah Province’s energy needs. The refinery’s feedstock is a blend of light crude from the Naftshahr field and heavy crude from southern Iran.

In addition to producing major petroleum products such as motor gasoline, diesel, kerosene, fuel oil, and liquefied petroleum gas (LPG), the refinery is also the only refining unit in the country capable of producing pentane and normal hexane products that serve as strategic solvents in the petrochemical industry.

Geographically speaking, the Kermanshah refinery is located in a position that enables it to serve as a link between the refining, transportation, and downstream industry chains in western Iran. Its easy access to the Iraqi border, along with its proximity to the Sumar and Naftshahr oil fields, has created the potential for Kermanshah to develop into a regional energy hub.

Exploration & Refining

As part of the Petroleum Ministry’s policies to increase crude production and ensure stable feedstock supply for refineries in western Iran, a development project for the Sumar, Saman, and Delavaran oil fields has been launched with a direct investment of $235 million. The project, whose construction work was recently initiated in the presence of the Petroleum Ministry officials and the provincial governor of Kermanshah, is designed to maximize resource recovery, develop the region’s economic infrastructure, and provide a reliable long-term feedstock supply for the Kermanshah refinery.

The Sumar field is located 30 km southwest of Gilan-e Gharb, the Saman field is 17 km southeast of Naftshahr, and the Delavaran field is in Ilam Province. The total in-place oil reserves of these three fields are estimated at around 410 million barrels. Under this development plan, 10 new wells and 2 workover wells will be drilled, and wellhead facilities, flowlines, separators, and surface installations will be constructed.

It is estimated that full implementation of the mentioned field-development plan will create more than a thousand direct and indirect job opportunities and giver rise to up to 10,000 b/d increase in the country’s crude oil production. One of the central goals of this plan is to ensure a stable supply of light crude oil to the Kermanshah refinery and to restore its operating conditions to the designed capacity.

Refinery Quality Upgrading

As part of the Ministry of Petroleum’s ongoing strategic programs, the Kermanshah refinery has entered a phase of reconstruction and quality enhancement over recent years. The project to increase capacity from 25,000 b/d to 40,000 b/d has begun. This project includes the construction of vacuum distillation units, hydrotreating units, benzene-removal units for gasoline, light naphtha treating and isomerization units, hydrogen production units, sulfur recovery, acid-gas treating, and sour-water treatment units.

The goal of implementing this project is to bring product quality up to the Euro-5 standard, increase refining efficiency, and reduce the share of fuel oil in the production mix. With the commissioning of the new units, the share of fuel oil in the refinery’s output will be reduced by up to 50%, and the capacity to produce light and clean products will increase.

Fuel Oil Quality

One of the most important ongoing projects is the fuel oil quality-upgrade plan, which entered the execution phase last calendar year (to21 March2025) and aims to reduce the sulfur content from 3.2% to 0.8%. In addition, through the use of domestic technology, about 30 percent of the fuel oil will be converted into diesel.

The implementation of this project not only helps reduce environmental pollutants and increase profitability, but also paves the way for enhancing the position of the Kermanshah refinery as one of the leading units in the field of green refining. Sulfur reduction, in line with the Ministry of Petroleum’s macro policies, is a fundamental step toward producing clean products and increasing Iran’s share in the prospective export markets.

Tech Localization

The Kermanshah refinery is one of the country’s first refining units to adopt a cooperative approach with knowledge-based companies. Under the new projects; the design and construction of heat exchangers, corrosion-monitoring systems, the production of hydrocarbon solvents, and the development of corrosion-resistant coatings; have been carried out by local companies.

According to the CEO of the Kermanshah Oil Refining Company, these projects represent an effective step toward indigenizing refinery equipment and reducing dependence on imports. Cooperation with the Research Institute of Petroleum Industry (RIPI) is also continuing in the design of new processes, and the technical knowhow for the polymer-grade hexane production unit is planned to be fully developed domestically.

West Energy Economics

In addition to its technical standing, the Kermanshah refinery also plays a decisive economic and social role in the region. This industrial unit has directly created jobs for more than one thousand people, and hundreds of indirect employment opportunities have been generated through local contractors and downstream industries.

It has also enabled the development of the value chain in Kermanshah Province by supplying feedstock to petrochemical complexes and producing specialty solvents. The refinery’s geo-economic position near the Iraqi border also offers significant potential for exporting petroleum products to the regional markets.

Future Vision

With the implementation of modernization, capacity-expansion, and quality-upgrade projects, the Kermanshah refinery is on the verge of entering a new stage of development. Once the ongoing projects come onstream, the refinery’s processing capacity will reach 40,000 b/d, and its products will comply with international standards.

The simultaneous development of the Sumar, Saman, and Delavaran oil fields will also provide a reliable source of feedstock for the refinery and increase the western region’s share in the national energy production.

Looking ahead, the Kermanshah refinery will be recognized not only as one of the key hubs in Iran’s energy map, but also as a symbol of revitalizing domestic capabilities and sustaining long-term, sustainable development in the country’s oil industry.

Iran-Russia Strategic Agreement to Take Effect

President Masoud Pezeshkian has stressed Tehran’s determination to implement the Comprehensive Strategic Cooperation Agreement between Iran and Russia, “We are firmly resolved to put the agreement we have signed into effect and make it fully operational, and we expect the Russian side to also accelerate and finalize the process of implementing these agreements,” he said in a meeting with Russian President Vladimir Putin in Turkmenistan’s capital.

Expressing satisfaction with the very good and expanding level of relations between Tehran and Moscow, he lauded Russia’s support of Iran in international forums and said: “We are determined to implement and operationalize the strategic cooperation agreement between the two countries that we have signed.”

Noting that cooperation, particularly in the fields of power plants, transportation, and corridors, is being pursued, he said: “Regarding corridors, the necessary groundwork for the full implementation of these projects will be prepared by Iran by the end of the current calendar year (21 March 2026). We expect the Russian side to also accelerate and finalize the implementation process of these agreements.”

“Furthermore, the development of the North-South and East-West corridors is of great importance. The pursuit of these routes is moving forward swiftly, and your directive will certainly lead to the acceleration of these vital and strategic projects,” he added.

Pezeshkian described agricultural cooperation between the two countries as very beneficial, saying: “This model can also be expanded to other fields. We have no option but joint cooperation, especially through international and regional organizations such as the Shanghai Cooperation Organization (SCO) and BRICS, to confront unilateralism.”

For his part, Putin described the signing of the comprehensive strategic cooperation agreement between the two countries as a turning point in bilateral relations, saying: “Trade relations between Iran and Russia increased by 13% in 2024 and by 8% in the first three quarters of 2025. Joint cooperation in the power-generation and the development of corridor infrastructure will continue, and we are currently reviewing cooperation in the transfer of gas and electricity to Iran.”

Stressing that there are also close contacts and coordination between the two countries regarding international issues, he said: “Russia has always supported Iran at the United Nations, and these stances will continue.”

Arrangements Made for Winter Fuel Supply

Minister of Petroleum Mohsen Paknejad has underscored the full readiness of the petroleum industry to safely get through the cold days of the year.

“Through careful planning, continuous coordination, and the round-the-clock efforts of oil industry personnel, the required measures have been put in place to ensure a stable supply of winter fuel for the country, and there is no cause for concern in this regard,” he said.

Citing experiences of past years and stressing the necessity of intelligent management of energy resources, the minister said: “Ensuring a stable supply of gas and petroleum products during winter is one of the main priorities of the Ministry of Petroleum. And accordingly, for months in advance, preventive and operational measures have been taken to improve infrastructure readiness, strengthen fuel reserves, and enhance coordination among various sectors.”

He noted that fuel production, transmission, and distribution across the country are being continuously monitored, adding: “Fortunately, thanks to the efforts of employees of the companies affiliated with the Ministry of Petroleum, power-plant gasoil reserves are in a favorable condition, and fuel deliveries to power plants are proceeding according to plan, and even beyond forecasts, which plays an important role in maintaining the stability of the country’s electricity grid during the cold days of the year.”

Paknejad, while expressing his gratitude to the employees of the oil industry across the country, said: “The petroleum industry staff involved in the production, refining, transmission, and distribution sectors, with a high sense of duty, work around the clock to provide the energy needed by the people. The result of these efforts is an increased reliability coefficient in the supply of winter fuel.”

Referring to the close coordination between the Ministry of Petroleum and other executive bodies, including the Ministry of Energy and related organizations, the minister said: “This coordination has enabled demand management, fuel supply to power plants, and responses to peak winter consumption to be carried out with greater precision and cohesion.”

“The Ministry of Petroleum under the 14^th Administration, relying on sound planning, demand management, and maximum use of existing capacities, considers ensuring the country’s energy stability a strategic duty and is moving forward with full determination so that people can get through the winter calmly and without concern,” said Paknejad.

Feedstock Supply to NGL 3100 Facility Underscored

The CEO of Iranian Central Oil Fields Co. (ICOFC) Peyman Imani has called for accelerated transmission of gas to the NGL 3100 facility in Dehloran.

“The transmission of associated gas from the Dehloran field via the Bayat gas compressor station, and the direct delivery of gases from the Cheshmeh-Khosh field to this processing facility, should be expedited,” he said during a visit to the facility.

“The Bayat compressor station is key to feedstock supply to NGL 3100,” he said.

“Fortunately, with the commissioning of phases 3 and 4 of the compressors at this station in November, 48 mcf/d of associated gas is currently being captured and sent to the NGL plant,” he said, adding: “With the launch of phase 1 and 2 compressors in January 2026, all associated gas from the Dehloran field—amounting to approximately 75 mcf/d—will be fully fed into the compression cycle and transmitted to the NGL 3100 facility.”

Imani said: “The wellhead separator gases of the Danan operational area are also carried via a 12-inch pipeline to the Bayat compressor station and, after compression, are ultimately directed toward the Dehloran NGL 3100 facility.”

During a visit to the Cheshmeh-Khosh gas field, he said: “Based on the plans made to complete the processing capacity, the majority of the associated gases from Cheshmeh-Khosh will also be sent directly to the NGL 3100 plant to prevent the wastage of this national resource.”

He said that regular visits to fields and facilities would be instrumental in accelerating projects, optimizing transmission routes and upgrading safety of pipelines.

$13bn Absorbed for 7^th Plan Petchem Projects

The CEO of National Petrochemical Co. (NPC) Hassan Abbaszadeh has said $13 billion has so far been attracted for financing petrochemical projects under the 7^th Five-Year National Economic Development Plan.

“Of the total $24 billion in capital required for petrochemical projects under the 7^th Development Plan, approximately $13 billion has been invested so far, demonstrating the strategic importance of this value-creating industry,” he said.

Addressing the ceremony for the signing of the “Memorandum of Understanding on Energy Consumption Reduction Projects”, he stressed the need for synergy among different sectors, saying: “I am pleased that, through a collective decision, we are continuing on the path of joint action. This shared understanding between the Administration, unions, and the private sector is a valuable asset for advancing the industry’s goals.”

He noted that the 7^th Plan, as the government’s overarching program, is strongly emphasized by the President, and that the Minister of Petroleum has once again stressed the necessity of achieving the goals and provisions of this plan.

“Along this path, leveraging the country’s media capacity and the cooperation of trade associations play a decisive role, and I appreciate this cooperation. Unions are the true voice of the private sector, and it is a source of pride that the private sector’s demands are properly articulated through these associations, reflecting the existence of a strong support base in the petrochemical industry,” he said.

Referring to the role of the petrochemical industry in downstream value chains, Abbaszadeh added: “This industry is not limited to the production of basic products; for example, we see significant value creation in the pharmaceutical chain, and various industries have emerged from petrochemicals that play an effective role in production, employment, and economic development.”

He stated that, in order to make maximum use of existing capacities, specific programs have been designed, including gas consumption management.

“In this regard, negotiations have been held with the Central Bank, and in two rounds of talks it was agreed that incentives would be provided by the government and the Central Bank for companies that move toward optimizing energy consumption and producing products, in such a way that gas consumption leads to product output and the development of exports,” he said.

Touching on the development of clean energies, Abbaszadeh said: “Another important aspect of the 7^th Development Plan is the development of renewable power plants. Currently, only one petrochemical company has a plan underway to develop 2,500 MW of renewable electricity, which can play a significant role in ensuring a stable and sustainable energy supply.”

|What we have begun today requires the participation of investors, the cooperation of civil society organizations, and the responsible role of the media. The majority of shareholders in the petrochemical industry are the people—either directly or indirectly through national, military, teachers’, and oil industry employees’ pension funds. This industry plays an important indirect role in employment, foreign exchange earnings, and the country’s economic stability,” he said. “Public trust is our main asset, and any commitment or incentive program must be implemented with full adherence, as public participation cannot be achieved without trust.”

Abbaszadeh also heaped praise on the petrochemical companies that had effective cooperation during the current calendar year, saying: “The continuation of these collaborations and collective action will help pave the way for optimizing energy consumption and achieving the sustainable development of the petrochemical industry.”

Massive Investment in Gas Transmission

Minister of Petroleum Mohsen Paknejad has announced the planned construction and commissioning of more than 1,000 kilometers of gas transmission pipelines by March 2026.

“Expanding the gas transmission network is instrumental in strengthening national energy security and sustainability, especially during peak consumption periods,” he said.

While touching on  the Ministry of Petroleum measures aimed at solidifying gas transmission network infrastructure, he said: “Through the efforts made by the petroleum industry staff, particularly National Iranian Gas Co. (NIOC) and by relying on the capabilities of contractors and application of domestically manufactured equipment and commodities, the construction and commissioning of over 1,000 kilometers of gas transmission pipelines have been targeted by the end of the current calendar year.”

“The development of transmission infrastructure and the strengthening of the gas network’s stability are among the main priorities of the Ministry of Petroleum under the 14^th Administration, and are being pursued seriously within the ministry’s implementation programs,” said Paknejad.

The minister referred to accelerating the development and completion of new gas transmission pipelines and compressor stations, noting that pipelines are key to strengthening the country’s energy security and that these measures will further reinforce the infrastructure for domestic energy supply.

“The commissioning of more than 300 km of gas transmission pipelines in the western and southwestern corridor of the country; the completion and operation of more than 170 km of pipelines in the northern provinces; enhancing gas transmission capacity to Ardabil Province and enhancing the stability of gas transmission lines in northwestern Iran through the construction of more than 50 km of the Chelvand-Ardabil pipeline; and the completion and commissioning of 154 km of gas transmission pipelines in the southern part of Sistan and Baluchestan Province are among the Ministry of Petroleum’s measures to develop and upgrade gas transmission infrastructure,” he said.

Gas Sector Investment Plans Eye Value Generation

The CEO of National Iranian Gas Co. (NIGC) Saeed Tavakoli has stressed the need to revise approaches to attracting investment.

 “NIGC’s investment and business team has carefully reviewed and conducted feasibility studies on 68 plans and projects, and that the rate of return on these projects is considerable, demonstrating their reliability and attractiveness,” he said.

“If NIGC is able to implement part of these projects based on priorities and in line with the country’s existing capacities, an important pathway will be opened for creating added value across the national energy value chain,” he added.

Noting that reforming and strengthening the approach to investment is of particular importance, he said: “As is customary worldwide, the gas industry must make maximum use of capital and resources from outside the public sector. Achieving this is merely possible when investment risks are allocated between investors and investees in a precise, rational, and fair manner.”

He described proper risk allocation as the most important principle in forming investment partnerships, adding: “Even in the smallest transactions, if one party seeks to transfer excessive risk to the other, the relationship will be disrupted; therefore, the primary condition for success is fair and appropriate risk sharing.”

Reviewing the company’s successful experiences with various contractual models, including the implementation of one of the country’s largest BOT projects, Tavakoli said: “There is no need to create new mechanisms; existing frameworks and tools could be used properly and to their full extent. Holding such specialized meetings may enhance colleagues’ knowledge, enabling them to become an ambassador for investment in the gas industry.”

Euro-4 Diesel Supply Up under 14^th Administration

The head of Coordination and Supervision of Operations at National Iranian Oil Refining and Distribution Co. (NIRODC) has announced increased supply of Euro-4 and Euro-5 gasoil under the 14^th Administration.

“With the hydrocracker unit of Abadan oil refinery coming on stream in December 2024, and the start-up and full operation of the hydrogen gasoil desulfurization unit at the Shiraz refinery this December, the share of Euro-4 and Euro-5 gasoil production in the total gasoil output will increase by 10 percentage points—from 54% in 2023 to 64% now,” Siamak Tavousi said.

“For the first time, 420 million liters of low-sulfur fuel oil was produced by the Imam Khomeini Refinery in Shazand and distributed among major consuming power plants,” he added.

He said with the commissioning and operation of the hydrogen gasoil desulfurization unit at the Shiraz refinery, the quality of all gasoil produced at this facility—amounting to 4 ml/d—will be upgraded to Euro-5 grade. He added: “With the RFCC unit of the Imam Khomeini refinery coming back on stream after overhaul, and the completion of the Shiraz refinery isomerization project under the 14^th Administration, Euro-4 and Euro-5 gasoline production by refining companies reached 40 ml/d in December, representing increases of 25% and 8% from the two preceding years, respectively.”

He emphasized that 90% of the motor gasoline produced in the country contains levels of aromatics, sulfur, and olefins that comply with Euro-4 and Euro-5 standards, saying that under Clean Air Act, the distribution of diesel fuel and motor gasoline in the country’s major cities is carried out in compliance with Euro standards.

Tavousi said the Tehran refinery quality upgrade project, with an investment of more than €320 million, has so far had 79% physical progress, and is expected to be commissioned in the first half of next calendar year, which would add 1.5 ml/d to motor gasoline production. He added that with the implementation of this project, all gasoline produced by the refinery will be upgraded to Euro-5 grade, and through this measure, 8 ml/d will be added to the country’s Euro-4 and Euro-5 gasoline production and distribution mix.

He said 420 million liters of low-sulfur fuel oil (ATR-140) was produced for the first time by the Imam Khomeini refinery with a sulfur content of 0.5% by weight as a clean fuel, and distributed among major consuming power plants under the supervision and cooperation of the Department of Environment.

“The measures taken reflect the priority given to improving fuel quality in the refining industry under the 14^th Administration, a goal that is being pursued seriously through the round-the-clock efforts of all the hardworking employees of this industry,” he added.

Azar Oil Field to Undergo 2^nd Phase Development

The project manager of the Azar oil field development has said the second phase of the Azar oil field development will be implemented in two stages.

“With the implementation of these stages, a production increase of about 30,000 b/d is targeted, and we are striving to achieve this goal within the timeframe set thereto,” said Keyvan Yar-Ahmadi.

“The kick-off meeting for the second phase of development and production of the Azar oil field, following the ratification and official notification of the contract commencement, was held in the presence of Nasrollah Zarei, CEO of Petroleum Engineering and Development Co. (PEDEC), the company’s Board, the construction team, and other key project stakeholders, during which the objectives of the new phase of the field’s development were outlined,” he said.

“At the meeting, the CEO of PEDEC stressed the need to submit the 2026 plan and budget as soon as possible, complete the related technical and contractual documentation, and carry out precise planning for holding the first JMC meeting of the second phase, so that the project’s implementation can begin in the shortest possible time,” he added.

Yar-Ahmadi, at this meeting, presented a report on the performance of Phase 1 of the Azar Field development and the activities carried out within the framework of the Preliminary Agreement (PAA) for Phase Two, and outlined the main plans anticipated for the implementation of the new phase.

Outlining the two stages of Phase 2 development, he said: “In the first stage, the plan includes drilling 12 wells, installing downhole pumps in all new and existing wells, carrying out acid fracturing operations in the new vertical wells, constructing wellhead facilities and pipeline, and building drilling locations and access roads.”

“In the second stage, drilling seven new wells, installing downhole pumps, carrying out acid fracturing operations, and completing the wellhead facilities are also planned,” he added.

Sepehr/Jofair Output Tops 34.5 MMbbl

Cumulative oil production from Sepehr and Jofair oil fields has exceeded 34.5 MMbbl, according to the report from the 24^th Joint Management Committee (JMC) meeting for the development and production enhancement project of these fields.

The meeting, on December 15, was attended by committee members, including representatives from National Iranian Oil Co. (NIOC), the project manager, and contractor representatives. During the session, a comprehensive report on the project’s physical and operational progress was presented, and the progress of drilling programs, production operations, and the development of surface facilities was reviewed. Furthermore, committee members evaluated the contractor’s performance and, following a review, approved the project’s latest financial statements.

The JMC, emphasizing the strategic importance of the Sepehr and Jofair fields in the country’s oil production portfolio, stressed the need for balanced development, production from the Ilam Formation, and an increase in heavy oil production alongside light oil from Sepehr and Jofair fields, considering this an effective factor in ensuring production sustainability and reservoir conservation.

It was further announced during the meeting that cumulative oil production from these fields has so far exceeded 34.5 MMbbl, a figure that reflects the effective role of the project’s implementation in increasing production and achieving the overarching objectives of national petroleum industry.

In another part of the meeting, issues related to HSE requirements, optimization of execution processes, and enhancement of coordination among technical and operational units were reviewed, and the necessary decisions were made to accelerate the implementation of development programs.

In conclusion, it was decided that the resolutions of this meeting would be followed up within the specified timeframes, and the results of the actions taken would be presented and evaluated at the next meeting of the JMC.

Successful Bidders Named in Yadavaran Project

The project manager of the Yadavaran oil field development project announced that, following the licensing round for the surface work packages of the development project, the final results have been announced.

Ali Akbar Moshtaqi said the implementation of two major operational packages—covering the construction of wellhead facilities and pipelines—has been awarded to Bina Design & Construction Co. and Khatam al-Anbia Construction Headquarters.

“The tenders were held in accordance with the Ministry of Petroleum’s guidelines, with emphasis on three criteria: price, technical capability, and execution track record. The proposals submitted by Bina Design & Construction Co. and Khatam al-Anbia Construction Headquarters met the required economic and technical criteria to be selected as the successful bidders,” he said.

Regarding the division of the packages, he said that the package covering 14 wells is mainly located in the southern part of the field, where, due to the high groundwater level, construction operations face greater challenges. In contrast, the package covering 10 wells is situated in the northern and northwestern areas of the field.

Moshtaqi said distribution of work between the two contractors was intended to accelerate the construction of surface facilities and pipelines and to reduce the field’s development timeline. He added that both contractors will enter the site mobilization phase in December, and that the installation of wellhead facilities and the construction of flowlines will begin early January 2026.

Referring to the special conditions of the Yadavaran field, he said that the contractors are required to use blowout control systems, H₂S-resistant piping, and to comply with stringent HSE requirements.

He said that PEDEC’s supervisory team—comprising HSE, quality control, engineering, and operations experts—will be continuously present on site, and that progress control indicators have been defined for each contractor, adding that upon completion of these 24 wells, the production capacity of the Yadavaran project is expected to increase by 42,000 b/d, playing a key role in achieving the production targets of the Ministry of Petroleum and NIOC.

Shahr-e Rey Solar Plant Comes Online

The 6MW Shahr-e Rey 2 solar power plant has been inaugurated in the presence of Vice President for Executive Affairs Mohammad Jafar Qaem-Panah and CEO of Pasargad Energy Group Ali Reza Sadeq-Abadi.

“The development of renewable power plants is the government’s strategy to compensate for the country’s electricity imbalance and reduce power outages, and this path is being pursued seriously with the participation of the private sector and the support of executive agencies,” Jafar-Panah said.

“This solar power plant, with a generation capacity of 6MW of electricity, has been connected to the national grid for the past few months and is now in operation, which is considered an important step toward strengthening the supply of reliable electricity,” he added.

For his part, Sadeq-Abadi said: “From the time the land was handed over until connection to the grid, this power plant became operational within two months, and at other sites as well, depending on the scale of the project, a construction and installation timeline of between two and six months has been scheduled.”

Noting that Pasargad Energy has potential to develop solar power plants, he added: “From the time of allotment of land to the connection to the grid, this power plant was commissioned within two months. At other sites as well, depending on the scale of the project, the construction and installation of the power plants have been scheduled to take between two and six months.”

He said that Pasargad energy is involved in financing, constructing and installing a total of 1,500MW of solar energy, adding: “The most significant challenges facing the projects are connecting the power plants to substations and transmission lines, as well as certain local disputes. While respecting the rights of stakeholders, addressing these issues requires cooperation and facilitation by executive bodies to accelerate investment.”

Stressing the necessity of development of renewables, Sadeq-Abadi said: “The country is facing imbalances in electricity, fuel, and water, as well as the issue of accumulated pollution, and solar power plants—without consuming gas, with minimal water use, and without emissions—play an effective role in reducing these imbalances in both summer and winter.”

Hamid Reza Azimi, deputy CEO of Renewable Energy and Electric Power Efficiency Organization (REEPEO), said: “Using resources from the National Development Fund of Iran (NDFI), around 200MW of solar power plants have been planned in cooperation with Pasargad Energy Group, of which 36MW have already become operational, and another 6MW were inaugurated today.”

“With the continuation of this cooperation, the full 200MW capacity is expected to come online by the end of the current calendar year, and according to the plans in place, the country’s renewable power plant capacity will increase to 5,000MW by next February and to 11,000MW next calendar year,” he said.

New Roadmap to Woo Investors into Petchems

The first Petrochemical Investors Conference was held in Tehran in the final days of December, with the participation of the CEO of National Petrochemical Co. (NPC) Hassan Abbaszadeh and key industry stakeholders. The event aimed to examine the required mechanisms for attracting investment, and to address the challenges of investment attraction in Iran’s petrochemical sector. The conference is a sign of a shift in policymaking within the petrochemical industry—from a sole focus on production management toward the design of sustainable mechanisms for attracting investment. This approach, relying on feedstock discounts, foreign-currency funds, and ownership structures, positions Iran’s petrochemical industry as a driving force of the national economy.

At present, Iran’s petrochemical industry has a production capacity of nearly 100 million tonnes (mt), and according to Abbaszadeh, it is expected that another 7 mt will be added to this capacity within the next three months. Abbaszadeh has stated that the industry currently exports about 70% of its products and accounts for nearly 30% of the country’s total non-oil exports.

60% Progress in Petchem Sector

At the conference, Abbaszadeh stated that the capacity of the petrochemical industry should reach 131.5 mt by the end of the 7^th National Five-Year Economic Development Plan. He noted that achieving the plan’s targets requires an investment of $26 billion in the industry, of which about $13 billion has been already attracted, and that now these projects have had around 60% progress.

Referring to the fact that 100% of the targets for the first year of the 7^th Development Plan in the petrochemical industry were achieved last calendar year, he added that the industry also performed well in the first six months of the current year. Abbaszadeh expressed hope that by the end of the year, with new projects coming on stream, the industry would achieve a 7 mt increase in capacity.

He also said that 44 petrochemical projects were planned under the 8^th Development Plan, noting that financing these projects would be prioritized.

Abbaszadeh stated that currently about 15% of the petrochemical industry is in the hands of the genuine private sector, while the rest is owned by pension funds. He added that the 7^th Development Plan aims to make these funds leave the sector and then transfer the ownership to the real private sector, marking the second phase of privatization, and stressed that greater support is needed to be provided to the private sector.

Noting that around 70% of petrochemical products are exported, he stressed that this makes the industry the best venue for establishing project-based foreign-currency funds.

Underlining the role of the petrochemical industry in boosting economic growth and job creation in downstream industries, Abbaszadeh said that the sector has led to the activation of a large number of domestic manufacturers and engineering consultants across the country.

The official stated that tiered discounts under the 7^th Development Plan are being introduced in the form of settlement bonds. He explained that under the previous tiered discount system, an investor had to make a direct investment, whereas with these bonds there is no requirement for integrated investment, and chain projects could receive feedstock discounts of up to 30%.

Abbaszadeh added that projects might also obtain project financing once they reach 40% progress. Holdings, meanwhile, may benefit from feedstock discounts by reinvesting 40% of their profits.

Petchem Income Fed into Economy

On the sidelines of the event, Abbaszadeh told reporters that petrochemical exports is expected to reach $13 billion by March 2026, adding that more than 98% of hard-currency revenue by petrochemical companies had been fed into national economic cycle.  

“Even the small portion that returns with a delay does so within the 80-day deadline and under strict supervision. Since 2018, there have been no problems in this regard, and this year the situation of foreign-exchange repatriation has been better than last year,” he said.

Regarding the difference between the exchange rates in the primary and secondary markets and its impact on production and exports, he said: “In the secondary foreign-exchange market, negotiations have been held with the Central Bank of Iran (CBI), and incentives have been considered—under certain conditions—to encourage the supply of part of petrochemical companies’ foreign currency in this market. Petrochemical companies that export beyond their planned targets may offer their surplus

foreign currency in the secondary market. In addition, foreign currency earned from products manufactured through investments in flare-gas capturing, as well as from some loss-making companies, is also covered by this policy.”

8% Share of GDP

Hamid Reza Ajami, NPC’s investment director, said the petrochemical sector accounts for 7-8% of gross domestic product (GDP).

“About 30% of the country’s non-oil exports come from this industry, and with the current trend, the petrochemical industry’s annual revenue could amount to roughly 60% of oil revenues,” he said.

Stressing that the government is obligated to provide the necessary groundwork and policy framework for private-sector participation in the industry, he said, “NPC is also required to address the challenges facing the development of the petrochemical industry so that investors’ activities could continue in a desirable manner.”

Stressing the continued implementation mechanisms and guiding role of NPC in developing the petrochemical industry, Ajami said, “The Company will continue to oversee the complexes and resolve challenges.”

Referring to the activities of NPC’s Directorate of Investment in two fields, he said: “The first field of activity covers the overall process of issuing and renewing investment licenses through various methods, and the second field focuses on facilitating the provision of financial resources by the Directorate.”

Petchem, Pioneer in Wealth Generation

Masoumeh Aqapour, presidential advisor for economic cooperation, said the petrochemical industry would generate significant wealth for the country.

“Undoubtedly, the industry is one of the three pioneering industries that has received special attention from the 14^th Administration,” she said.

Stating that investment in the petrochemical industry is shaped around three pillars—political security, public trust, and the national economy—she added: “In the arena of political security, international efforts are underway. Although unjust sanctions have been imposed on us, we can overcome these difficult conditions through perseverance.”

Noting that all required tools must be made available to this industry, she said, “It is even necessary to fAnchororm a task force for investment so that the petrochemical industry can begin its investment activities without going through complex procedures.”

“In this regard, governors have been instructed that, in petrochemical investment projects, files and permits be issued anonymously, so that when an investor comes forward, these files can be transferred to them in the shortest possible time,” said Aqapour.

Banks Facilitating Investment

Hadi Akhlaqi-Feyz Asar, the CEO of Bank Tejarat, emphasized the strategic significance of the industry in the national economy, saying, “The petrochemical industry is one of the key sectors of the economy. Over the past decade, it has not only been recognized as one of the leading sources of foreign-exchange earnings from exports, but its value chain—from upstream to downstream—has also provided significant capacity for job creation and the development of related industries.”

Touching on the steering role of NPC, he said, “The Company may define the investment strategy across various segments of the petrochemical industry and clarify the roles of all stakeholders—including banks as facilitators—so that projects move forward based on the investors’ actual capabilities.”

He referred to the experiences in the oil and petrochemical sector, saying: “Today, nearly 50% of the country’s banking system capacity is active in the oil, gas, and petrochemical sectors, and with national-level planning, all stakeholders could participate in the development of this industry in line with their respective capabilities.”

“In the second half of the current year, Bank Tejarat has planned to allocate $1.05 billion to support the petrochemical industry by investing in seven petrochemical projects across the country (mostly contracted with the Persian Gulf Holding). In addition, it has a new agreement worth approximately $1 billion underway with domestic and foreign investors for petrochemical projects,” Akhlaqi-Feyz Asar said.

He described the purpose of these measures as facilitating investment and concentrating resources to enhance the production capacity of the petrochemical industry, adding: “Given the high rate of return on investment in the petrochemical sector, this field may generate significant returns in less than two to three years.”

Stressing the need to establish focused and well-coordinated teams to fully capitalize on investment opportunities, the top banker said: “Our efforts are aimed at providing new financial instruments to encourage and facilitate investment in this industry.”

Akhlaqi-Feyz Asar also announced the issuance of foreign-currency transaction bonds and said that foreign-currency project funds have been considered for each specific project, making it possible to use these capacities for smaller-scale projects as well, including oil rigs and petrochemical projects.

He also referred to the foreign-currency pre-sale instrument, stating that in addition to stabilizing the market and the exchange rate, this tool enables investors to gain early access to foreign-currency resources generated from exports, allowing them to complete their development and investment projects.

“Leveraging the capacities of the capital market may help boost production and promote the country’s economic development, and by making use of these instruments, the petrochemical industry may become a driving force and engine of national economy,” he said.

Holding the first Petrochemical Investors Conference was an important step toward synergy among the government, the private sector, and the banking system. The achievements of this conference showed that despite international challenges, Iran’s petrochemical industry not only has a high capacity to attract investment, but may also serve as one of the main engines of national economic growth and sustainable employment. Coordination among policymakers, financial facilitators, and investors may pave the way for a bright future in the sustainable development of this industry.

Untapped Gas Fields, an Unrivalled Upstream Opportunity

Iran’s gas reserves are among the largest in the world; however, a significant number of gas fields are yet to be developed. Last May, Iran moved to introduce them as opportunities for investment in a bid to woo investors and bring in technology. The four gas fields of Kangan, Rag-e Sefid, Cheshmeh-Shour and Shahidan were among them. They enjoy great potential for investment to complete of the energy value chain.

Located in the provinces of Bushehr, Khuzestan and Khorasan Razavi, these fields have their own specific technical and infrastructure specifications, forming a segment of the perspective of Iranian upstream gas industry development. From significant reserves to geographical position and proposed contracting models, conditions have been prepared for the realization of development projects in the mid and long-term.

Kangan Salt Field

The Kangan Salt Field, discovered in 1977 in Bushehr Province, is known to be one of the country’s key offshore gas reserves. The field has come under the limelight for the development of its Dehram and Faraqun reservoirs, and so far, one well has beAnchoren drilled there. The field is estimated to hold 0.6 tcf of gas in place with final reserves estimated to reach 0.48 tcf.

The field’s gas condensate production ratio is 40 barrels per mcf, which is considered an economic advantage. The required foreign investment for implementing the project is estimated at around $80 million, and the proposed contract type for development is EPCF/EPDF. Iranian Central Oil Fields Company (ICOFC) has been designated as the investee company of this project.

According to the contractual terms, reimbursement of the investor’s capital and non-capital expenditures will take place after achieving the objectives of the work packages. Full cost recovery will be ensured during the contract’s implementation, along with the payment of financing costs to the investor throughout the contract period, in line with conditions provided therein.

Rag-e Sefid, Sweet & Sour

The Rag-e Sefid field, discovered in 1976, is one of the important onshore fields in Khuzestan Province. The main objective of its development is exploitation of the Fahliyan reservoir. So far, 52 wells have been drilled in this field, highlighting the importance and extent of previous exploration activities in the area.

The in-place and recoverable reserves of the Rag-e Sefid field are estimated at 0.2 and 0.12 tcf, respectively. The gas sourness level of the field is 800 parts per million (equivalent to 0.08%), meaning that in every one million units of gas, 800 units are corrosive and toxic compounds that require sweetening. The field’s gas condensate production ratio is 53 barrels per mcf. The required foreign investment for its development is estimated at $50 million, and the proposed contract type is EPCF/EPDF.

National Iranian South Oil Company (NISOC) is responsible for undertaking this project. The contractual terms are similar to those of other fields and include cost reimbursement after the achievement of work package objectives, cost recovery, and payment of financing expenses.

Cheshmeh-Shour Field

The Cheshmeh-Shour field, discovered in 2023 in Khorasan Razavi Province, is one of the newest onshore gas fields in the country. The field is planned for development with a focus on the Mozdouran reservoir, and so far, one well has been spudded there.

The in-place and recoverable reserves of this field are estimated at 0.19 and 0.13 tcf, respectively. For every 1mcf of gas produced from this field, about 5 barrels of condensate are extracted. The gas sourness level is a significant 30,000 parts per million (3%), meaning that 30,000 units of its compounds are corrosive and toxic. This issue places the field among those with very high sulfur gas content, posing unique technological challenges and underscoring the need for advanced sweetening facilities.

The required foreign investment for developing the Cheshmeh-Shour field is estimated at around $50 million, with the proposed contract type being EPCF/EPDF. ICOFC is the designated beneficiary. Contractual terms include reimbursement of the capital and non-capital expenditures, cost recovery, and payment of financing expenses to the investor.

Shahidan Field

Discovered in 2016, the Shahidan field is located in Khuzestan Province. One well has been drilled in the field, and its main development objective is the exploitation of the Asmari reservoir.

The field’s initial in-place reserves are estimated at 0.4 tcf, with a final recoverable reserve of 0.22 tcf. Its gas condensate production ratio is 43 barrels per mcf. The required foreign investment for development is estimated at 50 million dollars, and the proposed contract type is EPCF/EPDF.

NISOC is the designated beneficiary of this project. Under the contractual terms, the investor will be able to recover the capital and non-capital expenditures after achieving the objectives of the work packages, along with the financing costs.

Untapped Reservoirs

Each of the four gas fields described hereabove has its own unique geological and technical characteristics, representing part of Iran’s untapped gas industry potential. The combined reserves of these fields, along with their diverse geographical locations stretching from the Bushehr coast to the northeast of the country, create multiple opportunities for both domestic and foreign investors.

The availability of defined contractual models, transparent reimbursement terms, and the involvement of major domestic companies as investees outline a clear path for project implementation. Development of these fields, in addition to boosting gas and condensate production capacity, will be instrumental in strengthening energy security, reducing raw sales, and creating a foundation for sustainable exports. With 17% of the world’s gas reserves located in Iran, the country holds significant potential for attracting investment.

Part 2: Iran Offshore Ambitions

Path to Offshore Oil Resilience

By Reza Abesh Ahmadlou

Materials and Energy Expert

Lessons from Global Deepwater Projects

Looking abroad provides valuable templates: Brazil’s Pre-Salt Fields. In Brazil’s Santos and Campos basins, Petrobras discovered the Tupi (Lula) pre-salt in 2006 – one of the largest recent finds. The oil lies under 2 km of rock and salt beneath ~2–3 km of water, making drilling extremely expensive and complex. Brazil met this challenge by investing heavily in R&D and buying state-of-the-art rigs. Hundreds of FPSOs and advanced drill ships were deployed, and Petrobras’s in-house technical teams worked with international partners to master the ultra-deep wells. The pre-salt experience shows that sustained commitment and innovation are key factors: Petrobras had to endure a steep learning curve and high upfront cost but now produces hundreds of thousands of barrels per day from these fields. Iran can draw on this: it will need similar patience, skill-transfer with partners, and willingness to absorb R&D expenses to succeed in its own thick-salt, deep reservoirs.

- Gulf of Mexico (US): The Gulf is the world’s most active deepwater basin, with prolific fields like Thunder Horse and Perdido. The US example emphasizes safety and regulation. Modern Gulf wells rely on advanced well-control systems, BP’s improved BOP designs, and remote-operated vehicles. Critically, US regulators impose stringent requirements: a Gulf project might require on the order of 17 federal permits and compliance with about 90 sets of federal/state rules. The industry also follows hundreds of API safety standards that often become de facto law. Iran can emulate this framework with enacting clear offshore drilling regulations and enforcing them with inspections. The Gulf example also shows the importance of robust emergency plans: after 2010, BP and other firms formed the Marine Well Containment Company to ensure relief wells can be drilled if needed. Iran should similarly establish dedicated spill-containment resources for its waters.

- North Sea (UK & Norway): Decades of harsh weather and high costs in the North Sea have driven technology leaps. By the 1980s, operators were spending on well engineering and safety technology at levels comparable to a moon-landing program, reflecting the industry’s R&D intensity. The North Sea taught advanced seismic (including time-lapse monitoring), multilateral drilling, and extensive use of enhanced oil recovery (water and gas injection) to maximize output. For example, the field decay rates (about 10% annual offshore decline) led to widespread use of waterfloods and CO₂ injection on platforms. These techniques are now mature in Europe. Iran’s older onshore fields already need EOR; the same mindset will be needed for offshore fields. Additionally, Norway pioneered offshore carbon capture (the Sleipner CO₂ storage under the sea floor). In the future, linking enhanced oil recovery using CO₂ injection (turning waste CO₂ into an asset) could be an option. Iran can follow the North Sea model by planning long life cycles: drilling satellite appraisal wells around a discovery, implementing EOR early, and preparing for decommissioning after production.

Current Capabilities and Gaps

Iran’s energy industry is experienced in onshore and shallow offshore work, but deepwater know-how is just developing. The state oil company, NIOC and its subsidiaries have been expanding offshore infrastructure: for example, in 2025 NIOC signed deals to significantly increase the number of offshore drilling rigs, potentially reaching a dozen rigs for Persian Gulf operations. Iran has also invested in new drilling equipment onshore and awarded large domestic contracts to build local capacity. Partnerships have been pursued to bridge technology gaps – for instance, Iran once contracted with China’s COSL to operate the semi-submersible Alborz platform in the Caspian, and it encourages Chinese and Russian companies to bid in oil tenders. Yet significant gaps remain. Years of sanctions have blocked many Western firms and cutting-edge tools from Iran’s projects. As a result, some Iranian efforts have seen equipment failures and limited success in frontier wells. To compensate, Iran is pushing more self-reliance as it recently emphasized developing “AI-oriented” oil fields and is calling for domestic R&D in drilling technology.

Environmental and Safety Considerations

Deepwater drilling is associated with high environmental risk, so Iran must adopt stringent safeguards. Rigorous well-control standards (blowout preventers, real-time monitoring and emergency shutdown systems) are mandatory; learning from the Gulf, Iran is aligning with international best practice (e.g. API’s offshore safety guidelines). Iran’s agencies also emphasize spill preparedness as any offshore project must have contingency plans (boom deployment, capping-station contracts, etc.).

Another focus is the carbon footprint. Iran has joined global climate frameworks (it is a signatory of the Paris Agreement), and increasingly discusses Carbon Capture & Storage (CCS). Offshore, CCS could eventually pair with oil development – for example, using CO₂ injection for enhanced recovery and storing some CO₂ under the seabed, as is done in Norway. More immediately, Iran aims to minimize venting of methane and flaring; its Seventh Five-Year Plan (2024–28) even mandates expansion of renewables and efficiency in the energy sector. Finally, marine ecology must be protected. The Persian Gulf’s coral reefs and fisheries are sensitive to pollutants, and the Caspian’s unique endemic species (Caspian seal, sturgeon) need careful protection. Environmental regulations require minimizing seabed disturbance from pipelines and discharges, and post-drilling monitoring of water quality. In practice, Iran will likely require an independent environment agency review of any project and could contract third-party inspectors to verify compliance with spill-prevention standards.

Economic Viability and Investment Needs

Deepwater projects are capital-intensive, often with long lead times. Drilling and development costs per barrel are significantly higher than onshore – partly because of the technology needed. For perspective, Petrobras notes that reaching Brazilian pre-salt oil involves penetrating 2,000 m of salt under another 2,000–3,000 m of water, a challenge that makes each well “very expensive.” Iran can expect similarly steep costs, especially if multiple appraisal wells and extensive subsea infrastructure are required. This means break-even oil prices for ultra-deep fields are typically well above global averages (often cited in the $50–70 barrel range, depending on geology and scale).

Given the costs, Iran will need robust financing models. Joint ventures with foreign oil companies (similar to Brazil’s Production-Sharing Contracts or Russia’s Rosneft deals), can bring in cash and expertise. Iran could carve out specific deepwater blocks under attractive terms (e.g. generous production shares or cost-recovery rules) to entice investment.

The government can also help via incentives. Tax breaks or guarantee schemes (even taking risk-allocating IPC structures) would improve project economics. In short, economic viability hinges on aligning the huge upfront CAPEX with a credible long-term reward, which likely means a mix of national funding, strategic partnerships, and institutional reforms in its oil-contract framework.

Future Prospects and Innovations

Looking ahead, several trends could tip the balance in Iran’s favor.

• Automation and AI: The oil industry worldwide is moving toward autonomous operations – sensor networks, robotics, and machine learning for predictive maintenance. Iran has already announced plans to make dozens of fields “AI-oriented” to cut costs and boost output. Applying AI-driven monitoring on rigs (to detect drill-bit wear or mud anomalies early) could enhance safety and reduce downtime in deepwater wells.
• Advanced Drilling Techniques: Research into novel drilling methods (e.g. “wormhole” drilling through salt, laser drilling, or high-torque drilling motors) may, over the coming decade, lower the cost of penetrating hard formations. Iran’s technical institutes are beginning to explore these areas, potentially in collaboration with European or Chinese researchers.
• Energy Integration: Iran’s offshore strategy may eventually link with its clean energy goals. For example, offshore wind farms could provide power for peripheral platforms, lowering emissions from diesel generators. The Iranian Seventh Plan’s emphasis on renewable energy and efficiency suggests that future offshore projects will consider such integration at the design stage.

Conclusion

Deepwater oil holds both promise and peril for Iran. On the one hand, the Persian Gulf and Caspian Sea contain significant untapped reserves that could extend Iran’s status as a top oil producer, and fuel its economy for decades. On the other hand, tapping these reservoirs demands mastering complex engineering, marshaling vast investments, and adhering to strict environmental safeguards. Iran’s strategy will need to blend domestic initiative (building rigs, training engineers, reforming contracts) with selective international partnerships. By learning from Brazil’s pre-salt ingenuity, and the North Sea’s tough-environment innovations, Iran can chart a course into deep waters. If it succeeds, the nation will have turned a strategic necessity – shifting into frontier fields under adversity – into a technological and geopolitical asset.

EU Sanctions Russia-Linked Oil Traders

The European Union adopted fresh sanctions against the Russian oil interests, targeting traders Murtaza Lakhani and Etibar Eyyub for helping Moscow to circumvent Western sanctions on crude exports that help to fund Russia’s war in Ukraine.
The EU has imposed 19 packages of sanctions so far, but Moscow has managed to adapt to most measures and is still selling millions of barrels of oil to India and China, albeit at discounts to global prices. Much of this is transported using a so-called shadow fleet of vessels operating outside of the Western maritime industry.
The latest EU sanctions prohibit the bloc’s citizens from doing business with the listed companies and individuals, reducing their access to shipping and insurance providers. The EU has listed more than 2,600 individuals and companies in total.
The EU has targeted nine individuals and entities supporting Russia’s shadow fleet of oil tankers, the Council of the European Union and the EU’s Official Journal said, referring to businesspersons linked to oil companies Rosneft and Lukoil as well as shipping companies that own and manage tankers.
The EU is expected by analysts to list more than 40 ships in Russia’s shadow fleet this week, bringing the total to about 600 vessels.
Russia’s Permanent Mission to the EU, in a statement quoted by Russian news agencies, said the new measures would only hurt citizens of European Union countries and prove ineffective.
“We note with regret Brussels’ inability to recognize a simple truth: if the same action is repeated over and over and does not produce the desired result, it means the original strategy fundamentally does not work and is flawed,” it said.
The measures, it said, would amplify “the growing socio-economic problems and the declining standard of living for European citizens”.
Among those targeted by the EU is Canadian-Pakistani oil trader Murtaza Lakhani, CEO of trading company Mercantile & Maritime.
“Through his companies, he enables shipments and export of Russian oil, notably from the Russian state-owned oil company Rosneft,” said the listing in the EU’s Official Journal.
“In particular, Murtaza Lakhani controls vessels transporting crude oil or petroleum products originating in Russia or being exported from Russia.”
Lakhani, Mercantile & Maritime, Litasco Middle East DMCC and 2Rivers Group did not respond to a request for comment.
Lakhani, 63, runs mid-sized trading house Mercantile & Maritime Group with offices in Singapore and London.
He started his career at global trader Glencore, where he worked on Iraqi oil exports during the Saddam Hussein era and later moved to Iraq’s Kurdistan region, where he acted as an intermediary between the oil ministry and international companies to sell oil independently of Baghdad.

Probe Into Eni Plenitude Unit Dropped

Italy’s competition authority (AGCM) has closed an investigation into alleged unfair commercial practices concerning energy group Eni’s unit Plenitude and will take no further action, the regulator said in a weekly bulletin.
The investigation, launched in March, looked into the methods used by Eni’s retail and renewable business when renewing contracts.
Between May and September 2024, clients had complained that their electricity and gas supply contracts were renewed with different terms and conditions and without any prior notice from the company, the authority said at the time.
Italy’s competition watchdog also polices consumer rights.
Eni has pledged to sharpen efforts - including by sending emails, SMS texts and registered letters - to warn customers of changed terms and conditions, and offer partial compensation to those who have lost out from them, the AGCM bulletin said.
About 90,000-110,000 customers should be eligible for compensation, at a cost for Eni of 2-6 million euros ($2.35-7.05 million), the regulator said.
“The commitments proposed by Eni Plenitude are suitable for remedying the potential illegality of the commercial practice contested (in March),” the agency concluded.
Separately, German state-owned utility Uniper will launch the sale of its 20% stake in the natural gas pipeline Opal, one of Europe’s largest transmission corridors, the company said.
Uniper’s disposal of the asset was a condition set by the European Commission when it approved Berlin's bailout of the utility in December 2022, at the height of the European energy crisis triggered by Russia’s invasion of Ukraine.
In a statement, the company invited interested parties to submit their expression of interest by no later than January 29, 2026.
Opal stretches around 740 kilometers from Lubmin in Germany to Brandov in the Czech Republic.
Uniper’s stake in Opal is held by subsidiary Lubmin-Brandov Assets GmbH & Co. KG. The remaining 80% is held by GASCADE Gastransport GmbH.

Kenya Signs $311mn Power Lines Deal 

Kenya has signed an agreement for the investment of $311 million in the construction of two high-voltage electricity transmission lines with a pan-African infrastructure fund and PowerGrid Corporation of India, the finance ministry said.
The East African nation has turned to public-private partnerships, and securitization of some revenue streams, to provide funds for infrastructure projects in the face of high public debt and tight fiscal space.
Under the power lines deal, Africa50, a Morocco-based infrastructure fund that is mainly owned by African states, will join forces with PowerGrid to design, finance, construct and operate the transmission lines and associated sub-stations, the ministry said.
The project company will “undertake the entire lifecycle of the transmission infrastructure, from construction to operation—over a 30-year concession period”, Africa50 said in a statement.
The two lines would “unlock cleaner, affordable, and more reliable power for millions of Kenyans,” it said.
The breakdown of investment, and the expected boost to transmission capacity, were unclear.
Kenya Electricity Transmission Company Limited (KETRACO), a state firm, will be the contracting entity.
The project would “enhance system stability, reduce technical losses and load shedding, and facilitate the integration of renewable energy,” the finance ministry said.
High demand-driven overloads have been blamed for tripping up the electricity grid in the past, leading to nationwide blackouts. The government has sought to address that by expanding infrastructure to accommodate demand increases without straining the network.
However, Kenya's debt burden and resistance to new tax hikes has closed off traditional sources of financing for such infrastructure, and President William Ruto has responded by crafting deals with the private sector.
Critics say that strategy exposes the state to additional liabilities through opaque contracts. The government has rejected the criticism.

US Demands EU Exempt Gas from Methane Emissions Law

The U.S. has demanded that the European Union exempt its oil and gas from obligations under the bloc's methane emissions law on fuel imports until 2035, a U.S. government document seen by Reuters showed.
Starting this year, the EU requires importers of oil and gas to Europe to monitor and report methane emissions associated with those imports, in a bid to curb emissions of the potent planet-warming gas.
The world-first climate policy has faced opposition from U.S. Energy Secretary Chris Wright, who has called it impossible to implement and warned it could disrupt U.S. gas supplies to Europe. European countries have increased imports of U.S. liquefied natural gas as they phase out oil and gas from Russia.
The U.S. document said that in the absence of a "full repeal" of the EU law, Washington was asking the EU to "delay requiring U.S. emissions data reporting under the EUMR [EU Methane Regulation] until October 2035."
"The EU Methane Regulations is a critical non-tariff trade barrier that imposes an undue burden on U.S. exporters and our trade relationship," said the document, circulated to EU member governments ahead of a meeting of their energy ministers in Brussels.
The U.S. Department of Energy did not immediately respond to a request for comment on the document.
EU Energy Commissioner Dan Jorgensen told reporters the bloc was in talks with the U.S., but would not weaken the methane law, which will impose increasingly tough obligations on fuel imports over time.
“We are trying to be as helpful as we can, with regards to implementation, but the legislation stands,” Jorgensen said.
"We are not considering withdrawing the legislation or an exemption to the legislation."
Methane emissions are the second-biggest cause of global warming, after carbon dioxide.
The U.S. document also asked the EU to deem U.S. methane emissions laws equivalent to its own – meaning U.S. producers would automatically comply – and for Brussels to commit to not apply penalties if U.S. oil and gas imports breach the rules.
Industry sources said it was unlikely the U.S. could be granted this "equivalence", since the Trump administration has moved to roll back its federal emissions reporting requirements, including by suspending some for the oil and gas sector until 2034.
A joint paper by U.S. and EU oil and gas industry groups, seen by Reuters, also called for changes to the policy, including delaying tougher obligations due to apply from 2027.
Dan Byers, vice president for policy at industry group the U.S. Chamber of Commerce, said the EU methane law was "uniquely complicated for the United States, where you have all of these countless producers, molecules being co-mingled".

Imperial Oil Lifts 2026 Forecast for Spending, Output 

Canada’s Imperial Oil said it plans to increase capital spending and upstream production in 2026 as it doubles down on higher-return oil sands projects, aiming to lower costs and generate stronger cash flow.
Oil companies have been tightening spending and focusing on efficiency as oil prices soften, prioritizing high-return projects and reliability improvements over large new developments.
The oil producer had said in September it would cut about 20% of its workforce by end-2027 as part of a restructuring that will scale back its Calgary presence, amid weaker crude prices from higher OPEC+ output and trade policy uncertainty.
“Our 2026 plan builds on Imperial’s strong foundation and positions the company to structurally increase cash flow, by progressing towards volume and unit cash cost targets at Kearl and Cold Lake,” said CEO John Whelan. Imperial, which operates major oil sands assets in Canada, including Cold Lake, Kearl and Syncrude, sees its capital and exploration expenditures for 2026 between C$ 2.0 billion and C$2.2 billion, up from C$1.9 billion to C$2.1 billion estimated for this year. The company forecast 2026 upstream production in the range of 441,000 to 460,000 barrels of oil equivalent per day, compared to 433,000 and 456,000 boe/d it forecast for 2025. 
However, it expects throughput to be between 395,000 and 405,000 barrels per day in the downstream front, down from 405,000 and 415,000 barrels per day, dragged down by planned turnaround activity at its Sarnia and Strathcona refineries.

German Regulator to Allow Higher Power Grid Earnings 

Germany’s energy regulator has proposed new rules that would let power grid operators earn at least 1.4% more from 2029, when the next five-year regulatory period begins.
In exchange, about 900 qualifying companies will face tougher efficiency targets under stronger incentives, the Bundesnetzagentur said ahead of a media call.
“Investments in the German electricity grids are becoming more attractive. At the same time, we are ensuring that grid operators manage their operations more efficiently,” said Bundesnetzagentur president Klaus Mueller, referring to a draft that also includes provisions for gas grid firms from 2028.
The regulator oversees earnings for electricity and gas networks, which are natural monopolies.
The statement set out steps to reform a system of spending returns for new five-year frameworks for power and gas, respectively.
The new framework continues to cap allowed returns over multi-year periods but will track global interest rates more closely, it said.
The 1.4% figure reflects changes under the agency’s NEST process, it said, adding that companies could earn more from rising investment volumes and higher interest rates independently of that process.
Germany’s power grids need major upgrades to handle surging demand from AI-driven data centers and the electrification of heating and transport.
Gas operators, meanwhile, face shrinking customer bases as fossil fuel use declines, even as they invest in hydrogen-ready infrastructure.

The U.S. Treasury Rejects Bid for Lukoil Assets

The U.S. Treasury has rejected an offer from a group led by U.S. bank Xtellus Partners for the foreign assets of Russian oil company Lukoil, four people close to the matter told Reuters.
Xtellus had been competing against U.S. oil majors Exxon Mobil and Chevron, Abu Dhabi group International Holding Company, Hungary's MOL and  the U.S. private equity firm Carlyle, all of which still remain in the race.
Lukoil offered to sell the assets after the U.S. imposed sanctions on it and Kremlin-controlled rival Rosneft in October to try to push Russia towards a peace deal with Ukraine.
More than a dozen companies have bid for Lukoil’s assets, which are valued at about $22 billion. The assets include upstream oil and gas projects, refining and more than 2,000 filling stations across Europe, Central Asia, the Middle East and the Americas.
Xtellus had offered to organize a swap of Lukoil securities held by U.S. investors in a cashless deal to return them to Lukoil in exchange for the Russian company’s global assets, sources told Reuters.
The sources said Lukoil had favored the Xtellus bid but it was complex to execute. Xtellus is advising bid partners American billionaire Todd Boehly and Emirati investor group Allied Investment Partners. One of the sources said Lukoil and the Xtellus-led group have already signed a share purchase agreement.
The Treasury told the group that it does not have permission to use sanctioned securities in a transaction and that was why their proposal was rejected, the source said.
Now the plan is to try to escalate their offer to a more senior decision-maker and get the rejection reversed. The group will also apply for a license to access these securities, they said.
The U.S. investment funds own large holdings of Lukoil shares that were frozen and written down after Russia's 2022 invasion of Ukraine, losing the funds billions of dollars. The idea was to transfer the shares back to Lukoil in exchange for the assets, sell the assets to energy companies and pay the investors.

India Landmark Nuclear Law to End State Monopoly 

 India set in motion steps to end decades of state control over nuclear power, by introducing a bill in parliament that would allow private firms to build and operate plants as the government seeks to make atomic energy central to its clean energy push.
Foreign companies in a joint venture with Indian companies could apply for a license if selected to do so by the government.
India’s nuclear sector has been tightly guarded since its first reactor went online in 1969, shaped by Cold War politics and fuel-technology restrictions after its 1974 nuclear test.
State-run Nuclear Power Corp of India Ltd (NPCIL) owns and operates India's current fleet of nuclear power plants but Reuters reported last year that India was looking to invite domestic private firms such as Tata Power, Adani Power and Reliance Industries to invest about $26 billion in the sector.
The new bill, which must be approved by the lower and upper houses of parliament to become law, would allow any “person expressly permitted by the central government” to apply for a license to enter the nuclear sector, a major shift from decades when only state-run companies could operate reactors.
The world's third-largest greenhouse gas emitter plans to expand nuclear power capacity to 100 gigawatts (GW) over the next two decades, more than 12 times the current 8.2 GW.
The new bill, named the Sustainable Harnessing of Advancement of Nuclear Energy for Transforming India Bill, 2025, drops a rule that let operators sue suppliers for equipment defects, a provision foreign suppliers have long opposed. Foreign suppliers include General Electric Co, Westinghouse Electric Co and France's EDF.
The bill doubles operator liability for large reactors to 30 billion rupees ($330.75 million), retains the overall compensation cap at previous levels and proposes a nuclear liability fund to cover accident claims in line with global norms.
Private firms will be allowed to import and process uranium, according to the bill. The government has kept strategic activities such as uranium mining, nuclear fuel enrichment and fuel re-processing under government control, and all operators would require licenses.

Phillips 66 to Focus on Midstream, Refining Projects

Phillips 66 has approved a $2.4 billion capital budget for 2026, slightly above its forecast for this year, as it shifts growth spending toward expanding its midstream natural gas liquids (NGL) network and higher-return refining projects.
The spending plan underscores the U.S. refiner’s focus on shareholder returns as it invests in assets aimed at improving margins and cash flow across its integrated business, CEO Mark Lashier said.
The company’s acquisition of full ownership of WRB Refining, which operates major refineries in Illinois and Texas, from Cenovus Energy in September, is expected to increase its crude processing options.
Its capital budget for the midstream and refining units of $1.1 billion each compares with the estimated expenditure of $975 million and $822 million, respectively, in 2025.
Key investments in its midstream segment include the Iron Mesa gas processing plant, a 300-million-cubic-feet-per-day facility in the Permian Basin that is expected to start up in the first quarter of 2027.
It also includes the expansion of the Coastal Bend NGL pipeline, which will raise capacity to 350,000 barrels per day by the fourth quarter of 2026.
Besides, Phillips 66 is planning a new fractionator in Corpus Christi that would add 100,000 barrels per day of NGL fractionation capacity. A final investment decision is expected in early 2026, with completion targeted for 2028.
A fractionator separates mixed NGL into individual products such as ethane, propane and butane, allowing them to be marketed, transported or exported separately.
The growth capital plan for the refining segment includes Humber gasoline quality improvement project, expected to start up in the second quarter of 2027, and more than 100 smaller projects aimed at improving crude flexibility, feedstock optimization and clean product yields.

Nigeria Issues Permits for Gas-Flaring Project

Nigeria has issued permits to 28 companies under a program that aims to end routine gas flaring to cut carbon emissions and use some of the gas to generate power.
The Nigerian Gas Flare Commercialization Program (NGFCP) marks a major step toward ending flaring and monetizing wasted gas, NGFCP officials said.
The projects could capture 250 to 300 million standard cubic feet per day (mmscfd) of gas currently flared, cut about 6 million tonnes of CO₂ annually, and unlock nearly 3 gigawatts of power generation potential, an NGFCP document showed.
Nigeria expects the initiative to attract up to $2 billion in investment and create more than 100,000 jobs. It could also produce 170,000 metric tonnes of LPG annually, providing clean cooking access for 1.4 million households.
The permits follow a competitive bid round that awarded 49 flare sites to 42 bidders after the program was restructured post-COVID-19 and the Petroleum Industry Act.
Gbenga Komolafe, head of the Nigerian Upstream Petroleum Regulatory Commission, attended and presented the certificates to the 28 companies.
“The NGFCP is a pillar in our quest to eliminate routine flaring, reduce emissions, and enhance Nigeria's global credibility in energy transition commitments,” an NGFCP official said.
The program aligns with Nigeria’s Energy Transition Plan and aims to turn flare gas from an environmental liability into an economic asset.
The 28 companies have signed key agreements, including Connection, Milestone Development and Gas Sales Agreements, and now qualify for permits to access flare gas.
Producers will benefit from reduced liabilities, improved ESG performance and alignment with the government's decarbonisation agenda.
Development partners, including Power Africa, KPMG, World Bank’s Global Gas Flaring Reduction initiative, USAID and financiers, have supported the program with technical and commercial frameworks.
The official said while the permits mark a milestone, engineering, construction and financing must begin “in earnest.”
“The real work starts now”, the official added. “This program will create economic, industrial and environmental value while strengthening Nigeria’s energy transition”.

COP Impact on Global Oil Demand

Ehsan Jenabi

Senior Energy Analyst

The UN Climate Change Conference (COP 30) held in Belém in 2025 concluded with a mixed and polarized outcome. While it demonstrated a continued global desire for climate action, deep divisions on finance and fossil fuels prevented the strong, implementation-focused results many had hoped for.

The UN Climate Change Conference in Belém wrapped up on Saturday 22 November 2025 with decisions that reflect both a shared desire for global action and increasingly polarized interests.

COP 30, which the Presidency had framed as the “implementation COP”, aimed at focusing less on what the world must do, rather on how to make it all happen. Given the major commitments submitted by the active countries in the COP meetings to tackle global warming and ensure we can adapt to the worsening impacts of climate change, negotiators were expected to pin down tools, indicators, and processes to turn aspirations into action. 

However, deep divisions on finance, trade measures, mitigation pathways, and other areas hindered progress on these decisions until the very last moment. The outcome of the conference is somehow difficult to achieve shortly. More than 80 countries pushed for a roadmap to transition away from fossil fuels in the final deal. Those who supported a stronger outcome on climate finance for developing countries were equally discouraged.

 “While deep divisions were on display in Belém, we also saw strong ambition from countries to continue working together on the transition away from fossil fuels—this work will go beyond COP 30.”

Climate adaptation also took up much of the attention at the conference, which in itself is positive. “Political battles compromised what could have been stronger outcomes on the technical work of implementation, but these efforts will continue through National Adaptations Plans and other processes.”

A New Climate Finance Work Program

Although climate finance was not on the official agenda, it was the center of attention at COP 30, with discussions focused on how countries would deliver the promise of the New Collective Quantified Goal on Climate Finance that was adopted in Baku last year, including through scaling up the provision of public finance under Article 9.1 of the Paris Agreement. 

The COP 30 GCAA mobilized a whole-of-society Mutirão, aligning everyone around shared goals and clear timelines for real-world delivery. More than 30 countries are leading initiatives and 190 are engaged across the six axes, supporting implementation of nationally determined contributions (NDCs), national adaptation plans (NAPs), and national biodiversity strategies and action plans (NBSAPs). Businesses play a central role in scaling and financing climate action, with nearly 200 business initiatives representing thousands of businesses already involved, and most PAS relying on private-sector innovation and implementation. Financial institutions — from multilateral development banks (MDBs) and development finance institutions (DFIs) to investors, insurers, and philanthropies — are aligning capital flows to climate action. Thousands of local and regional governments engaged in the COP 30 GCAA via dozens of city and subnational networks.

The CHLCs will continue to work with all initiatives on accelerating implementation of solutions and supporting Parties in achieving the Paris Agreement by implementing the five-year vision for GCAA launched just before COP 30. The Mutirão decision—a high-level political text proposed by the COP Presidency and adopted by Parties—recognizes the urgency of this issue by establishing a two-year work program on climate finance to ensure countries continue discussing the implementation of the Baku commitment.

The new program could provide a platform for political follow up on the Baku to Belém roadmap to scale up climate finance from both public and private sources for developing countries to at least $ 1.3 trillion per year by 2035—finance essential for their climate action in the next decade.

It also offers a space for developing countries to continue pushing for the provision of public finance from developed countries to meet the core $ 300 billion mobilization goal from the Baku decision.

Contested Adaptation Indicators

One of this COP’s core priorities was agreeing on a set of indicators for the Global Goal on Adaptation (GGA)—a technical process that became tightly intertwined with high-level negotiations on adaptation finance under the Mutirão decision. In fact, COP 30 failed to deliver a coherent outcome on indicators for the GGA. 

 After two years of negotiations, the decision on the National Adaptation Plan (NAP) assessment was finally adopted. The outcome of the NAP assessment recognized the progress of developing countries’ adaptation planning and implementation, while pointing out the challenges faced by developing countries in accessing the necessary resources and climate information to carry out their NAP process and implement adaptation actions. 

It also highlighted the importance of integrating Indigenous and traditional knowledge and a gender-responsive approach in the NAP process as well as the potential of nature-based solutions and ecosystem-based adaptation. However, the decision does not provide any meaningful guidance on how to scale up support for developing countries’ NAP processes, nor does it include key elements such as explicit mentions of adaptation mainstreaming and synergies and policy coherence with the National Biodiversity Strategy and Action Plan process. 

Fossil Fuel Roadmap Pushed Out

Amid all the discussions in Belém, one question echoed through the conference halls: where is the space to build on commitments to move away from fossil fuels, phase out fossil fuel subsidies, and triple renewables—and how do we close the ambition gap in nationally determined contributions (NDCs), which is still far from delivering on this promise? 

By the end of the week, 88 countries had thrown their support behind developing a roadmap to transition away from fossil fuels, pushing to anchor the idea in the Mutirão decision so work can advance over the coming year. However, the final text did not reflect these calls, containing no language on a roadmap for transitioning away from fossil fuels. 

Draft language on fossil fuel subsidy reform did not make it into the Mutirão decision either. The final text launched the “Belém Mission to 1.5” with COP 30 and 31 Presidencies tasked with delivering a report by COP 31 on enabling ambition and implementation of NDCs and NAPs. However, there is no clear hook for the Mission to link back into the process. The decision also launched the “Global Implementation Accelerator” meant to accelerate implementation to keep 1.5°C in reach and support countries to implement their NDCs and NAPS. These two processes, if designed and delivered well, could still offer steps towards a roadmap to transition away from fossil fuels. 

On just transition, the final decision agreed to develop a just transition mechanism, aiming to enhance international cooperation, technical

assistance, capacity-building, and knowledge-sharing, which had been a key ask from civil society groups. The establishment of this mechanism represents a key step forward in making the Just Transition Work Program more actionable.

Key Outcomes and Shortfalls:

• Climate Finance: A new two-year work program was established to discuss fulfilling the Baku commitment of mobilizing at least $ 1.3 trillion annually by 2035 for developing nations. While this keeps the issue on the agenda, it lacks the urgency demanded by many.
• Adaptation Finance: The conference set a goal to triple adaptation finance by 2035. However, pushing the target from 2030 to 2035 delays critical funding for vulnerable countries facing immediate climate impacts.
• Global Goal on Adaptation (GGA): The process to agree on indicators for measuring adaptation progress failed. A list of 60 indicators was adopted, but last-minute political changes compromised their technical credibility, leaving countries without a clear framework for reporting.
• Fossil Fuels: A push by over 80 countries for a formal roadmap to transition away from fossil fuels was rejected. Instead, the "Belém Mission to 1.5" and a "Global Implementation Accelerator" were launched, which could, if well-designed, become stepping stones toward such a roadmap.
• Positive Developments:
  • A Just Transition mechanism was established to support affected communities.
  • A new Gender Action Plan (GAP) was agreed upon, mandating the integration of gender-responsive approaches into national climate policies.
  • On trade, a compromise was reached to hold dialogues on contentious unilateral measures like carbon border adjustments.

Projected Impacts on the Oil Market

The impacts will be differentiated across timeframes and market segments:

• Short-Term (2025-2026): Minimal direct impact on physical oil demand. The main effect will be on market sentiment and investor outlook. Strong agreements at COP 30 could lead to increased volatility and downward pressure on long-dated oil futures, signaling a lack of confidence in long-term demand.
• Medium-Term (2027-2035): This is where the real impact begins. The more ambitious NDCs solidified at COP 30 will be translated into national laws and policies. We can expect:
  • Peak Demand Consolidation: Most major forecasters (like the IEA) already predict oil demand will peak before 2030. COP 30’s outcomes would cement this view and likely pull the peak forward.
  • Accelerated Erosion in Transport: Demand for gasoline and diesel will fall faster as EV adoption accelerates.
  • Increased Focus on "Hard-to-Abate" Sectors: While road transport decarbonizes, pressure will grow on petrochemicals (plastics) and heavy transport, potentially capping their growth.
• Long-Term (Post-2035): The legacy of COP 30 will be the structural decline of the oil industry. The 2035 NDCs created there will set a trajectory that makes a rapid decline in oil demand not just possible, but legally and politically embedded in many countries' frameworks.

• Countervailing Forces and Limitations

It is important to recognize the constraints:

• Implementation Gap: A strong agreement at COP 30 does not guarantee strong national action. Domestic politics and economic pressures can slow down implementation.
• Equity and Development Needs: Developing countries will rightly demand financial and technological support to transition. Without it, their oil demand may continue to grow as they develop.
• Geopolitics: Global events (like conflicts or price shocks) can disrupt the energy transition in the short term, bolstering arguments for energy security that sometimes favor oil.
• Economic Reality: If alternatives are not cost-competitive or scalable fast enough, oil demand could prove "sticky," especially in sectors like aviation and plastics.

Conclusion

In essence, COP 30 highlighted profound global divisions but kept processes alive, pushing the most difficult decisions and concrete action into the future. COP 30 is not the event that single-handedly kills oil demand. Instead, it should be viewed as a critical accelerator in a multi-decade transition.

The key objectives pursued by the Cop meetings could be summarized as follows:

• Tripling renewables and doubling energy efficiency;
• Accelerate zero- and low-emission technologies in hard-to-abate sectors;
• Ensuring universal access to energy; and
• Transitioning away from fossil fuels in a just and equitable manner.

Its success will be measured by whether it can convert the technical findings of the first Global Stocktake into credible, actionable, and funded national policies for the post-2030 period. By forcing the world to define what a 2035 climate target looks like, COP 30 might directly challenge the long-term business model of the oil industry, reinforcing the investment shift towards clean energy and steadily tightening the constraints on future oil demand growth. The overall direction is towards a peak and subsequent decline in global oil demand, and COP 30 could be a powerful force in making that outcome a reality.

In general, it could be argued that all eyes are on the implementation of National Determined Contributions (NDCs), with hope that the coalition supporting a fossil fuel transition will accelerate action at home. It is noteworthy that natural gas may play a very important role in the energy transition, as it is a fossil fuel with less pollution.

 However, in case we take into consideration the issue from the perspective of the oil and gas exporting countries, it is essential for them to make decisions with regard to monetizing their oil and gas reserves to hedge themselves against the negative impacts of the prospective low demand for the fossil fuels. This is while, political aspects of the COP approvals inevitably urges the oil and gas exporting countries to actively take part in the relevant negotiations in parallel with marketing  and monetizing their oil and gas reserves to move toward national prosperity, and development.

Russia-US Row on India Oil Trading

Shuaib Bahman

Intl. Affairs Analyst

India, as the world’s third-largest economy and one of the biggest oil consumers in Asia, faced complex challenges in crude oil imports in 2025. India’s oil imports reached about 244 million tonnes in 2025, representing a 5.43% increase compared to the previous year, equivalent to an average of 4.9 mb/d. This 89% dependence on imports has made India vulnerable to geopolitical fluctuations, a clear example of which could be seen in the context of the Russia-Ukraine war and the intensification of the United States and the European Union sanctions against Russia, especially as the US is exerting heavy pressure on India to halt its purchases of Russian oil.

Demand Growth

India’s economic growth, which is running at an approximate rate of 7% in 2025, has pushed oil demand to an unprecedented level. Oil consumption in the country increased by 330,000 b/d this year, making India the largest contributor to global oil demand growth, surpassing even China.

However, limited domestic refining capacity, and the ability to process only a portion of demand has pushed the country’s import dependence to 89%, a level expected to persist through FY 2025-26. This trend has driven annual import costs to $143 billion, which not only puts pressure on New Delhi’s trade balance but also transmits global price volatility into domestic inflation.

From an economic perspective, India’s dependence on oil imports leaves the country vulnerable to supply shocks. At the same time, discounts from purchasing the Russian oil have generated billions of dollars in savings for the Indian government. However, these purchases have led to accusations in the West that New Delhi is indirectly financing Russia’s war against Ukraine.

Russia and Western Sanctions

The war in Ukraine, since February 2022, has reshaped India’s oil import paradigm. Prior to the conflict, Russia’s share was less than 1% (40,000-50,000 b/d), but by FY 2022-23 it had risen to 19.1%, with the value increasing thirteenfold (from $2.5 billion to $31 billion).

In 2025, Russia leads India’s energy market with a 33–38% share, followed by Iraq (19%), Saudi Arabia (14–18%), the United Arab Emirates (10%), and the United States (5-10%). Nevertheless, the US and the EU sanctions, targeting companies such as Rosneft and Lukoil (which account for 60% of India’s imports from Russia), are seeking to exert additional pressure on New Delhi.

The sanctions, which are aligned with Trump-era policies, not only increase transportation risks but also threaten India’s $10-per-barrel discount on the Russian oil purchases. This could act as a restraining factor for India’s growing economy. In fact, access to cheap oil over the past three years has given India a competitive advantage in global markets, enabling it to outpace economic rivals in both the East and the West at a faster pace.

Strategies and Confrontations

India’s approach combines partial compliance with sanctions and their circumvention. Major companies such as Reliance Industries have cut orders from sanctioned suppliers by 13% and increased the combined share of Saudi and Iraqi supplies from 26% to 40%, while state-owned firms such as Mangalore Refinery and HPCL-Mittal have suspended Russian contracts. Nevertheless, refineries such as Nayara are attempting to maintain imports of cheap Russian oil through the use of a shadow fleet and ship-to-ship transfers.

Meanwhile, the United States is intensifying pressure by imposing 25-50% tariffs on Indian goods (such as textiles and jewelry) and applying secondary sanctions on banks and refineries. These measures could reduce India’s GDP by $30 billion (0.7%) and weaken the Indian rupee.

At the same time, Russia has maintained India’s dependence through continued discounts. Meanwhile, the European Union, in alignment with Washington, has increased insurance risks and the threat of vessel seizures to pressure New Delhi. India, however, is pushing back by citing sovereign independence and the lack of United Nations backing for these sanctions.

Scenarios, Possibilities and Implications

In a pessimistic scenario, an escalation of Trump-era sanctions, including 500% tariffs and a complete blockage of dollar transactions, could push India’s imports of Russian oil below 0.5 mb/d. This would trigger a supply shock and drive Brent prices to $90 per barrel. The consequences would include a $6-7 billion increase in import costs, higher fuel inflation, and disruptions to India’s energy security, pushing US-India relations to their lowest point since the 1990s.

In the baseline scenario, continued partial compliance, featuring a 30% reduction in oil imports from Russia and a 50% increase from the United States (raising its share to 10.7%), creates a temporary balance. However, it raises operational costs (such as higher tanker rates) by $2-3 billion annually, while keeping diplomatic tensions manageable.

In the optimistic scenario, bilateral negotiations and the US waivers stabilize India’s Russian oil imports at 1.4 mb/d, preserving $5-6 billion in savings and allowing diversification to proceed without an economic shock.

Vision

India’s oil trade in 2025 is emblematic of the clash between economic needs and geopolitical pressures. Rising demand and import dependence, alongside Russia’s dominance and diversification toward the US and the Middle Eastern supplies, have placed India in a dual position: benefiting from the Russian discounts while facing mounting sanctions-related risks.

So far, India has sought to sustain its oil imports from Russia by strengthening multilateral diplomacy, including pursuing cases at the World Trade Organization (WTO) over violations of trade rules and seeking waivers through bilateral relations with the US. However, the unpredictability of President Trump’s behavior in the US has kept India concerned about ongoing geopolitical risks and the future trajectory of its relationship with Washington.

In this context, the United States is also likely aware that, at the global level, a deepening crisis in India-US relations could strengthen non-Western alignments such as BRICS, where India could play a pivotal role in energy diversification and inject new momentum into anti-US mechanisms on the global stage.

An In-Depth Story of Oil

(Part IV: D’Arcy Concession)

Elahe Baqeri Sanjarie

“On the night of November 27, 1932, Teymourtash submitted the (oil) file to the Cabinet. The Shah arrived and, agitated, said: ‘What happened to the oil file?’ They told him it was ready. It was winter. The heater was burning. He took the file, threw it into the heater, and said: ‘You’re not leaving until you cancel the concession.’ He left. We sat down and canceled the concession.”

This is how Mehdi Qoli Hedayat (Mokhber-ol-Saltaneh), the then prime minister of Reza Shah, describes the circumstances in his book Memories and Dangers.

Mostafa Fateh, the then deputy CEO of the Anglo-Iranian Oil Co. (AIOC), confirmed the oil dossier was thrown into heater, and recounts this ostensibly brave and patriotic act of Reza Shah as follows:

“What Hedayat has written regarding the burning of the oil file is entirely true. Since that file contained all the correspondence exchanged between the Minister of the Court and the Company, when government representatives later wished to use it and present some of the Company’s letters to substantiate their claims before the Council of the League of Nations, they realized that they had lost important documents.”

This action by Reza Shah, which on the surface appeared to be a gesture aimed at preserving Iran’s power and asserting its rightful claim to a share of its natural resources. Nonetheless aroused doubts in the eyes of many critics; four opponents viewed the move as prearranged and coordinated with the policies of the British government, and perhaps as laying the groundwork for a new contract and further concessions.

D’Arcy Concession Reversed

It is, however, noteworthy that Reza Shah’s action was not sudden; the sparks of opposition to the D’Arcy concession go back to several years earlier—perhaps as far back as 22 December 1920, when the Armitage-Smith Agreement was signed with the company. The Iranian government was never fully at ease with this agreement, and the fire of opposition to it was never extinguished. The contract stipulated the following: “First, a subsidiary company was defined as one that was directly or indirectly under the control of the Company, or one in which the Company appointed more than half of the directors. Second, it was agreed that 16 percent of the net profits of the Company and its subsidiary companies would accrue to the government, provided that these profits derived from the production, refining, and sales of Iranian oil; profits obtained from the transportation of oil (oil tankers) were explicitly excluded.”

In the disputes between the government and the Company, this contract was invariably invoked. Eventually, in 1928, Sir John Cadman, Vice Chairman of AIOC, raised the issue of revising the contract in the course of negotiations with Teymourtash. On August 12 of the same year, Teymourtash in turn informed the Company that the D’Arcy Agreement had been concluded at a time when the Qajar government was unaware of the true meaning and implications of the concession it was granting, and that today the Iranian government was prepared to consider a revision of the contract.

After these negotiations, a few months later in March 1929 Sir John Cadman came to Tehran. The purpose of his visit was to state that the Iranian government’s demands went beyond what AIOC could accept in order to continue the negotiations. These demands, which Cadman described as excessive on Iran’s part, included the government’s desire that Iran’s minimum annual oil revenue be guaranteed by AIOC at the sum of 2.7 million Sterling pounds. At the same time, a dispute also arose over the method of calculating the 16% that was to be paid to Iran from AIOC’s net profits.

Most of the negotiations between Teymourtash and Sir John Cadman took place in Switzerland and London, until the government asked AIOC to send a representative to Tehran to conclude the matter. AIOC, however, announced that it saw no reason to bear the expense of sending a representative to Tehran, and suggested instead that a representative of the government travel to London. The Iranian government did not accept this proposal.

MPs Safeguard National Rights

It appears that once Teymourtash’s negotiations failed to yield results, the government’s share of oil revenues in Iran, in 1931, following the economic crisis caused by the worldwide Great Depression, fell to its lowest level, amounting to only 336,000 pounds sterling for a full year of oil production. This was communicated to Iran in 1932, prompting a wave of domestic protests and loud objections from members of the Parliament.

On 19 July 1932, Ataollah Rouhi, known as Ata al-Molk, who was MP from Kerman in the National Consultative Assembly, addressed the Minister of Foreign Affairs, saying: “AIOC is subject to the constraints of British policy. It is for this reason that I questioned the Minister of Foreign Affairs. Since the Iranian government is the guardian of the rights of the Iranian nation, this situation is intolerable and must be revised.”

One week after this protest, on 4 Mordad, Ali Dashti, another member of the National Consultative Assembly, addressed Taghizadeh, the Minister of Finance at the time, saying: “Today is no longer a day when we should, by relying on a document issued in ignorance, be deprived of our rightful rights.”

Following these statements, the Minister of Foreign Affairs assured the representatives that the matter was under full consideration by the government and that the government had begun negotiations with AIOC to revise the contract.

These statements did not satisfy the deputies, and they did not relent in insisting on the cancellation of the D’Arcy concession. On November 24, Ali Dashti once again addressed the Minister of Finance and, in remarks delivered on the floor of the Majlis, said: “The government must display a measure of intellectual courage and bravery and put an end to this situation. At a time when governments are annulling the Treaty of Versailles, our government should not be negligent toward a rotten concession that is entirely one-sided. I know that this issue has still not been resolved and that the government has taken no serious action. Why, then, is the government procrastinating in annulling the D’Arcy concession?”