Energy Operations Stability, National Priority

In the final days of last calendar year ( to 20March 2026), while Iran’s petroleum industry was preparing to celebrate reaching 100 million tonnes in petrochemical production, increasing crude oil output, and surpassing production records in the South Pars gas field; the Zionist Regime and the United States launched an imposed war against Iran. They jointly attacked Tehran and martyred the Supreme Leader of the Islamic Revolution. The war began while Iran, much like during the 12-Day War, was in the midst of negotiations and making every effort to keep the region from entering a conflict that would throw energy markets into crisis. However, just like in that previous war, military aggression against Iran resumed. Over the past 47 years, Iran has been subjected to enemy aggression three times. In all such aggressions against Iranian territory, targeting energy infrastructure has been a primary objective.

From the very first day of the war, regular war-room-style meetings held in the oil industry under supervision and in presence of Mohsen Paknejad, the minister of petroleum, and the deputies of the ministry, and appropriate decisions were made. As Minister Paknejad later stated, “all my colleagues in upstream and downstream sectors, despite being exposed to severe danger, continued their work in a manner suited to the crisis situation.”

In the third imposed war as well, attacks on energy infrastructure began with the bombing of oil depots in Tehran and Karaj. After that, the South Pars refineries hit by missiles, followed by the bombing of Iran’s petrochemical complexes and auxiliary facilities. On the morning of the ceasefire announcement between Iran and the US, the Lavan refinery in southern Iran was subjected to an airstrike. Although the enemy targeted fuel product storage tanks and depots in Tehran and Alborz provinces with the aim of disrupting fuel supply to northern Iran and Tehran, the crisis was managed within 48 hours thanks to the timely intervention of Iran’s four main oil industry companies (NIOC, NIORDC, NIGC and NPC). Minister Paknejad announced that this coordination and management ensured that the public did not face any concerns regarding the supply of fuel, especially gasoline.

The President Masoud Pezeshkian’s visit to the headquarters of the Ministry of Petroleum, as well as the presence of Vice President Mohammad Reza Aref at NIORDC headquarters, underscored the importance of maintaining operations during this period. This was because employees across all sectors of the petroleum industry, despite their concerns, remained steadfast in their duties. Noting that oil exports was not interrupted for even a single day during the third imposed war; the minister stated that wartime oil sales were encouraging. Even during ceasefire, the petroleum industry staff, like before, have immediately begun rebuilding the damaged facilities. For the first time, the reconstruction of two gas refineries in Assaluyeh has been assigned to NIGC.

On the other hand, the current calendar year (started on 21 March) provides a new opportunity for international cooperation in the reconstruction phase for foreign companies in areas such as the modernization of refining units, improving energy efficiency, strengthening environmental standards, and digitalizing the operational network.

The rapid reconstruction of damaged facilities, proper distribution of products, uninterrupted production and oil exports all indicate that Iran’s energy infrastructure is sustainable, reliable, and ready to participate in international projects.

New Supreme Leader Named

Ayatollah Ali Khamenei, the Supreme Leader of the Islamic Revolution, martyred following the attack by the Zionist Regime and the United States on February 28. Following the incident, “the Assembly of Experts” issued a statement appointing Ayatollah Mojtaba Khamenei as the third Supreme Leader of the Islamic Republic of Iran.

Minister of Petroleum Mohsen Paknejad issued a message of condolences on the occasion of martyrdom of Ayatollah Ali Khamenei.  In his message, he stated, “All managers, staff, and the great family of the petroleum industry, while reaffirming their commitment to the ideals of Imam Khomeini and the martyred Leader, declare their allegiance to His Eminence Ayatollah Mojtaba Khamenei as the Supreme Leader of the Islamic Revolution.”

In this regard, Hamid Bovard,  the CEO of National Iranian Oil Co. (NICO), Mohammad Sadeq Azimifar, the CEO of National Iranian Oil Refining and Distribution Co. (NIORDC), Hassan Abbaszadeh, the CEO of National Petrochemical Co. (NPC), Saeed Tavakoli, the CEO of National Iranian Gas Co. (NIGC), and Gholam Abbas Hosseini, the CEO of South Pars Gas Complex (SPGC) also issued separate messages declaring their allegiance to the Supreme Leader of the Islamic Revolution, congratulating the great nation of Iran on this selection, emphasizing their obedience to the Supreme Leader in safeguarding national interests, the country’s dignity, and the ideals of the Islamic Revolution.

In his first message, Ayatollah Mojtaba Khamenei elaborated on several key principles and emphasized the role of the people in advancing the country’s affairs. The message is organized into seven sections and addresses topics such as explaining the position of leadership, the role of the people in various arenas, the necessity of preserving national unity and cohesion, the importance of an effective presence on the scene, and laying emphasis on continuing the path of the Islamic Republic of Iran.

Ayatollah Mojtaba Khamenei outlined the foreign policy approach of the Islamic Republic of Iran and emphasized: “The Islamic Republic system has no intention of establishing dominance or colonialism in the region, but is fully prepared for unity and warm, sincere mutual relations with all its neighbors.” He further clarified the principled approach of the Islamic Republic of Iran, adding: “We have not been into war and do not seek war, but we will by no means relinquish our legitimate rights.” The positions announced by the Supreme Leader of the Islamic Revolution reflect an emphasis on preserving principles while simultaneously developing regional relations within the framework of the Islamic Republic of Iran’s grand policies, and indicate the continuation of the system’s overall trajectory by relying on domestic capacities and engaging with neighbors.

Regional Nations Responsible for Security

President Masoud Pezeshkian said respecting the rights of neighbors and honoring the sovereignty of neighboring governments is a strategic policy of the Islamic Republic, adding: “We still believe that the region’s security must be ensured by the countries of the region themselves.”

Addressing the 156^th session of the Cabinet on March 6, he noted that good neighborliness, respect for neighbors’ rights, and honoring the sovereignty of neighboring states as the Islamic Republic’s strategic policy.

“We tried to avoid war through diplomacy and with the help of neighbors, but the American-Zionist military aggression left us no choice but self-defense,” he said.

He further stressed: “We respect the sovereignty of all neighboring countries, and we still believe that the region’s stability must be provided by the region’s own countries.”

During this session, in addition to reviewing the latest situation of the country following the aggressions of the American-Zionist enemy and the performance of executive bodies under wartime conditions, the unparalleled solidarity and resilience of the Iranian nation and their support for the country and the Islamic system in the face of enemy attacks were commended and appreciated.

Furthermore, paying comprehensive attention to the condition of citizens harmed by the American and Zionist regime’s attacks on the country was placed as one of the main priorities on the Administration’s agenda.

On 10March 2026, as part of his field visits to five ministries and executive bodies of the country, Pezeshkian visited the Ministries of Petroleum, Interior, Industry, Mine and Trade, Health, and Agriculture. While overseeing the measures and arrangements adopted by them during the war situation, he issued the necessary orders to provide better and faster services to the people.

During these engagements, he held discussions with the ministers of these ministries and conducted strategic oversight of the progress of activities, challenges, and requirements for managing the country under wartime conditions, issuing important orders to facilitate and sustain the delivery of services to the people.

At the Ministry of Petroleum, Pezeshkian received reports on fuel reserves, energy distribution methods, and the status of refineries, and emphasized the need to strengthen the energy production and distribution chain, as well as to make precise forecasts to ensure a continued and reliable supply of fuel to the people and operational forces across the country.

He stated that providing services during this period, like other critical and historic moments in the country, is a clear manifestation of dedicated effort. He added: “I urge all managers and staff of executive bodies to be present on the front lines with a spirit of “Jihadi” responsibility, sincerity, and prudence, so that the peace of mind and psychological security of the people are not compromised during the war situation.”

NIGC Prioritizes Gas Grid Safety

The CEO of National Iranian Gas Co. (NIGC) Saeed Tavakoli has said that the swift and precise follow-up of incomplete projects, aimed at ensuring the stability and enhancing the safety of the network, pipelines, and facilities throughout the entire gas value chain across all sectors, is among the company’s top priorities.

Speaking at the first meeting of the country’s gas industry managers, he highlighted the importance of the stability of the national gas network and said: “The completion of incomplete projects to ensure stability and improve the safety of the network, pipelines, and facilities across the entire gas chain in all sectors must be pursued with greater speed and precision.”

He also announced that implementing and developing Type 1 and Type 2 contractor agreements in the current calendar year (starting on 21 March 2026) would be essential priorities for subsidiaries of the gas industry in the field of gas consumption optimization.

Tavakoli said moving toward reducing flaring gases ahead of the Seventh Development Plan is one of the essential steps for the New Year. He continued as saying: “The regular implementation of preventive maintenance (PM) programs in gas distribution management and provincial gas companies, as well as the need to develop and implement maintenance and repair approaches in the ten gas transmission regions, is essential.”

He stressed that continuous monitoring of the network and updating equipment play a key role in increasing safety coefficients and reducing incidents.

Referring to the “1405 Without Leaks” (current calendar year) program, he stated: “Moving toward achieving a ‘zero leak’ target is among the company’s main priorities, and all units must seriously and continuously implement control and corrective measures, especially at the level of provincial gas companies.”

Tavakoli also stated during a joint meeting with the managers of the Fars Province Gas Co. and District 5 of Gas Transmission Operations: “Fars is a province on the scale of a country. It experiences all four seasons simultaneously and possesses capable human resources, ancient monuments, cultural diversity, and a long history of benefiting from natural gas.”

Referring to the management necessities in the country’s current situation, he emphasized: “Optimal consumption management, cultural awareness-building, and utilizing the capacity of contractor companies are among the important axes that must be pursued seriously, while ensuring the stability of the network and the operational readiness of the gas industry are maintained.”

Mohammad Reza Zareian, the CEO of Fars Province Gas Co., presented a comprehensive report on gas distribution in the province. Touching on the extent of work, he said: “Gas coverage in the urban areas of Fars Province stands at over 99%, and in rural areas at 98.8%.”

“Additionally, 91% of the industries in the province have been connected to the natural gas network, which has played a significant role in strengthening the industrial infrastructure and enhancing the economic productivity of Fars Province,” he added.

Iran Crude Price Surges 70-80%

Iranian heavy and light crude, which was trading at around $60 to $66 in the first two months of 2026, rose to over $112 following the developments of the Ramadan War at the end of March 2026.

According to data provided by OilPrice.com, Iranian heavy crude, which opened on the fourth day of March 2026 (March 4) at $77.98, increased by approximately 43% by the end of the month (March 31), reaching $111.80.

The Iranian light crude also stood at $79.88 at the beginning of March, then experienced a 43% increase by the end of the month, reaching a record high of $113.70.

This is while in the first two months of 2026, Iranian light and heavy crude was trading at around $60 to $66. Accordingly, the developments of the Ramadan War have caused the price of Iranian crude oil grades to experience a growth of 70 to 80%.

The oil market continues its upward trajectory into the fourth month of the Gregorian calendar, and one must wait and see what the continued attacks by the Zionist-American regime against Iran will bring for the future of the oil market.

Oil Price Down as Tensions Subside

Oil prices fell amid prospects for an agreement to end the American and Zionist regime’s war against Iran.

According to a Reuters dispatch from Perth, Australia, oil prices declined in early trading on April 17 due to optimism that military hostilities in the Middle East might end following a 10-day ceasefire between Lebanon and the Zionist regime, as well as The US President Donald Trump’s announcement that the United States and Iran might hold talks over the weekend.

Brent North Sea crude futures fell 61 cents, or 0.61%, to $98.78 per barrel by 7:07 a.m. Greenwich Mean Time. Meanwhile, the US West Texas Intermediate (WTI) crude fell 89 cents, or 0.94%, to $93.80 per barrel.

Trump claimed to reporters outside the White House on April 16: “I think we are very close to making a deal with Iran.”

Oil prices surged 50% in March, setting new records, and have only recently fallen below $100 per barrel, though they have remained in the $90 range throughout the week.

The Zionist Regime’s attacks on Lebanon have been a major obstacle to reaching an agreement to end the American and Zionist regime’s war against Iran.

Analysts from the financial institution ING estimate that approximately 13 mb/d of supply has been disrupted due to the interruption of traffic through the strategic Strait of Hormuz.

Minister Demands Condemnation of Oil Facilities Strikes

Minister of Petroleum Mohsen Paknejad, in a letter to the UN Secretary-General Antonio Guterres, warned about the catastrophic human and environmental consequences of the attacks by the Zionist Regime and the United States on the strategic equipment and facilities of Iran’s oil and gas industries.

He called on the international body to condemn these hostile actions.

The letter read as follows:

“The Zionist Regime and the United States, in continuation of their hostile policies and military aggression against the Islamic Republic of Iran and its vital civilian infrastructure, committed other crimes twice, once on 7 March 2026 and again on 18 March 2026. The attacks, which transcend a limited military operation and represent the beginning of a full-scale war against Iran’s energy security and economy, targeted oil depots and storage facilities in Tehran, and gas refineries of the South Pars region in the northern Persian Gulf.

Unfortunately, these attacks were carried out using the airspace and territory of certain neighboring countries, highlighting the complex security dimensions of this aggression and the necessity for regional governments to assume responsibility for incursions undertook from within their land or airspace.

These attacks not only resulted in the destruction of a portion of equipment and facilities of Iran’s oil and gas industries and caused damages on the Iran’s energy network, but also brought about the following catastrophic human and environmental consequences:

Environmental Catastrophe: The massive fires caused by missile strikes on oil and gas facilities and refineries led to the release of enormous volumes of greenhouse gases and toxic pollutants into the region. This severe air pollution poses a serious threat to the health of local residents and the fragile Persian Gulf ecosystem.

Energy Crisis and Disruption of Daily Life: Disruptions in the supply chain of natural gas and other energy carriers have affected the lives of millions of Iranian civilians and disrupted the operations of thousands of industrial and production units.

Excellency

The Islamic Republic of Iran has never initiated any aggression, nor does it seek to escalate tensions in the region. However, the complicity and inaction of certain regional countries regarding the use of their airspace by the aggressors, as well as the regrettable silence of international bodies in condemning these crimes, have emboldened the Zionist Regime and the United States to continue their criminal activities on a broader scale, believing themselves immune from legal and international consequences.

Undoubtedly, your role as the Secretary-General of the United Nations can be decisive and effective in halting these crimes. It is expected that the United Nations, as the highest international body responsible for maintaining peace and security, will adopt a firm and explicit position in condemning this aggression and take effective measures to immediately halt the attacks, compensate for the damages incurred, and deter the recurrence of such tragedies.

Your appropriate and impartial intervention in this critical situation will not only contribute to restoring peace and security in the region and the world, but will also constitute an effective step in rebuilding the international community’s trust in this organization and its elevated role in safeguarding the highest shared human values.”

Petchem Facilities Strikes Aimed at People

The head of Production Control at National Petrochemical Co. (NPC), Saeed Baghbani, said the enemy’s approach in attacking the ancillary facilities of the petrochemical industry is to exert greater pressure on the people and disrupt the supply of their needs.

“By optimizing the consumption of energy carriers in the country (electricity, gas, gasoline, diesel, etc.), we can thwart the enemy’s malicious intent,” he said.

Speaking 6on April 2026 on the enemy’s attacks on petrochemical industry facilities, he expressed regret over an enemy that adheres to no rules, and stated that the ancillary facilities of the petrochemical industry in Mahshahr were attacked on 5 April 2026 and in the Assaluyeh region on 7 April 2026.

He announced that the processes of controlling and preventing damage and securing conditions are being urgently carried out by his colleagues in Assaluyeh, adding: “God willing, we will soon overcome the current situation and achieve normal and safe conditions.”

Baghbani  said that unfortunately, the damage inflicted on ancillary facilities harms the entire petrochemical industry, and continued: “The attack was planned by the enemy with the approach of halting Iran’s petrochemical industry, so that meeting the people’s needs would face challenges and pressure would increase on the people who are resisting.”

Regarding the role of the people in maintaining the country’s energy security and countering the potential effects of the attacks, he said: “These attacks aim to disrupt people’s needs in the short term, because the enemy knows that Iran, with the position and strength derived from its people—as the people selflessly protect the system on the frontlines—will undoubtedly see its industrialists and those who serve the nation fulfill their duties.”

He noted that what sets Iran apart from the enemy is the support of the nation, and emphasized: “The enemy knows that we will ultimately rebuild the damaged facilities, and resolve the problem, and it is certainly seeking to exert pressure on the country, especially on the Ministry of Petroleum, to disrupt energy carriers.”

Baghbani pointed to the steadfastness and resilience of the people during this period and stressed: “By optimizing the consumption of energy carriers in the country (electricity, gas, gasoline, diesel, etc.), we can thwart the enemy’s malicious intent.”

Operational Commitment Key to Output Stability

The CEO of National Iranian South Oil Co. (NISOC) said the expertise, specialized knowhow, and operational commitment of oil industry staff in confronting technical challenges are the guarantors of maintaining stability and continuity in ongoing production processes.

Ramin Hatami, during a visit to the operational units and facilities of Masjed Soleyman Oil and Gas Production Co. (MISOGPC) on 29 March 2026, expressed gratitude for the high dedication of employees who, with selflessness and tireless effort during these days, have prioritized the preservation of production positions.

He said: “Continuity in ongoing processes and the prevention of any interruption are owed to the capable presence of specialists, and this operational commitment is the most important pillar of protecting the organization’s reservoirs and assets during this period.”

Emphasizing that the competence and specialized knowhow of staff in confronting technical challenges guarantee the organization’s stability, he added: “The full-time presence of colleagues at their workplaces and the optimal management of resources demonstrate the honor and high commitment of the workforce to fulfilling organizational duties under all circumstances.”

During the visit, Hatami examined the status of equipment and the process of service delivery under current environmental conditions. He said: “Removing logistical obstacles and ensuring the maximum supply of technical needs must be prioritized. Additionally, engineering units must be fully prepared to stabilize operational capacities.”

Shahram Zolfaqari, the CEO of MISOGPC, also presented a comprehensive report on the progress of projects and the stability of subordinate units on the sidelines of the visit.

At the conclusion of the visit, a meeting was held in which various dimensions of technical activities and strategies for improving productivity in the region were discussed and reviewed.

Arrangements Made for Fuel Distribution

Vice President for Executive Affairs Mohammad Jafar Qaempanah said required arrangements for fuel supply in the country had been made in advance and that, up to this point, they have not faced any particular problem in fuel supply.

In the wake of the 8 March2026 attacks by the Zionist Regime on some fuel distribution infrastructure, he said during a meeting with Mohammad Sadeq Azimifar, the CEO of National Iranian Oil Refining and Distribution Co. (NIRDOC): “Arrangements for emergency situations have been made, and so far we have not encountered any particular issue in fuel supply.”

Stressing the necessity of public cooperation for better management of the situation, he added: “Given the exceptional circumstances, it is advisable for the people to practice conservation not only in fuel consumption but also in other sectors.”

Azimifar also described the state of fuel production and supply in the country during the meeting, stating: “There is no problem in supplying gasoline.”

Referring to damage sustained by some infrastructure, he added: “Due to the damage inflicted on certain infrastructures, we are in the process of restoring and reconstructing the networks to ensure optimal fuel distribution.”

The meeting also emphasized accelerating the reconstruction process of damaged infrastructure and the necessity of managing energy consumption with the cooperation of the public.

Minister of Petroleum: Don’t Worry About Fuel

Minister of Petroleum Mohsen Paknejad, while announcing the review of energy sector issues under wartime conditions during a joint meeting with the chairs and deputy spokespersons of parliamentary specialized committees, said: “With the necessary measures taken, there is no cause for concern regarding fuel supply.”

On the sidelines of the meeting on 30March 2026, he stated: “In this meeting, we discussed issues related to the energy sector under wartime conditions, addressed matters concerning the oil industry, and agreed to resolve challenges through further consultation.”

He stated that there is no concern regarding fuel supply, adding: “The necessary measures have been taken in this area, and the people may rest assured that we will have no problems.”

Hamidreza Haji Babaei, Deputy spokesman of Majlis, also said that it was necessary to receive a report on the actions taken in the oil industry to reassure the public, and the situation was reported as favorable. He added: “The cooperation between Majlis and the government on the fuel issue and energy sector, given the enemy’s mischief, has been very good, and the reports in this regard are encouraging. Therefore, the people may rest assured that there will be no problems in the fuel sector.”

Mousa Ahmadi, head of Majlis Energy Committee, expressed  his gratitude to the Minister of Petroleum, and the ministry’s staff who are on the front lines and taking necessary actions to support the people, saying: “Based on my visit to Kharg Island and the South Pars Gas Complex (SPGC), I realized that the ministry has various scenarios in mind for different crisis conditions.”

Iran Oil Industry Unfazed by War

The First Vice President Mohammad Reza Aref said Iran’s petroleum industry has never shut down despite the unjust attacks by enemies during the imposed wars.

“The unity between the people and the government is the guarantor of overcoming circumstances and foiling the enemy’s plots,” he said.

Aref, during meetings with the Ministers of Petroleum, Industry, Mine and Trade, and Roads and Urban Development, as well as the head of the Plan and Budget Organization, received the latest reports on the damage caused by the recent attacks of the American-Zionist enemy and the process of reconstructing infrastructure, and issued the required orders to meet the needs of the people.

During his visit to the National Iranian Oil Refining and Distribution Co. (NIORDC), he expressed gratitude for the performance of the company’s employees during the Ramadan War and emphasized the role of these efforts in maintaining public calm and service stability.

He said: “The recent war not only demonstrated the capacity of the government but also the capacity of the Iranian nation, and along this path, divine blessings were clearly evident.”

Aref added: “In this war, numerous incidents occurred, each reminiscent of experiences like city of “Tabass”, and the Iranian nation repeatedly witnessed divine assistance in overcoming these circumstances.”

Expressing gratitude for the efforts made by managers and staff in the oil industry and the refining and distribution sector, he stated: “The performance of this sector, under conditions where the enemy sought to disrupt infrastructure, far exceeded expectations.”

He added: “The enemy’s goal was not merely to damage infrastructure, but to create dissatisfaction among the people by disrupting services. However, the personnel in this field, through round‑the‑clock efforts, neutralized this plot. In fact, an enemy that claimed to be helping the Iranian people only fired at the people’s lives, livelihoods, and peace—trying to bring the nation to its knees—but it never succeeded.”

Referring to the 14^th Administration’s approach in managing wartime conditions, Aref said: “The Administration, assuming the continuation of a widespread and prolonged war, has made the necessary plans to run the country, and there is no cause for concern for the people. Of course, the government of defense and development will not settle for anything less than the enemy’s submission to the demands of the Iranian nation.”

Second War Amid Talks

Petroleum Industry Resisting Warplanes

Elahe Baqeri Sanjarie

On 9:40 am of February 28^th, Tehran was rocked was massive explosions. Rarely did anyone know which spot had been targeted. News spread of plumes of smoke billowing from Pasteur Street, where the very center of Iranian governance is housed. That was followed by more blasts in the capital and other cities. The message was now clear: Backed by the United States, the Zionist Regime was invading Iran anew, violating the truce it had agreed to in June 2025 following a 12-Day War. In the first blasts, Iran’s Supreme Leader Ayatollah Ali Khamenei, along with a number of senior military and security officials, martyred during a meeting.

These attacks came exactly in the midst of Iran-US nuclear negotiations brokered by the Sultanate of Oman whose foreign minister had given an upbeat assessment of. Just two days prior to the invasion, Iran and Oman had agreed to hold successive technical talks in Vienna. Back in June 2025, the Zionist Regime launched a 12-day war on Iran exactly when Tehran was in indirect talks with Washington.

Oil Industry Up and Running

In response to the February war, Iran launched its defensive strikes targeting the Zionist Regime and US military bases in the region. In parallel, fundamental measures were undertaken to ensure security for citizens. On the second day of the war, Minister of Petroleum Mohsen Paknejad said there was enough fuel in the country, allaying public concerns about any shortages.

“Despite brutal attacks by the Zionist Regime and criminal US, everything is normal in the country,” he said.

Paknejad said petroleum industry staff were working hard on offshore platforms in the Persian Gulf, oil and gas refineries and other sectors.

Hormuz, Achilles’ Heel of Global Energy

Day after day, explosions were heard here and there. The US and the Zionist Regime did not shy away from any action to damage energy infrastructure and harm public livelihood. However, they had not taken into consideration Iran’s strategic role in the energy market and its management of the Strait of Hormuz. Experts say the oil market has been affected by the US-Zion war on Iran with all eyes turned to the Persian Gulf. The Strait of Hormuz is one of the most vital and strategic shipment waterways in the energy sector. Now, any navigation in the Persian Gulf would require coordination with the Islamic Republic.

Hormuz altogether handles shipment of 20 mb/d of oil and one-fifth of global LNG consumption a day. Any geopolitical crisis in this shipping lane may disrupt supply and demand in the energy sector. In fact, any disruption in Iranian oil exports or any threat against energy infrastructure in the region would significantly affect prices, let alone would send a wave of uncertainty through international markets to downgrade safety of investment in the Persian Gulf region. As soon as the war broke out, in the wake of Tehran’s warning on restricted passage through Hormuz, most shipowners put on hold their shipment of crude oil, fuel and LNG through this waterway. Oil prices spiked to $120 in world markets. On March 9, North Sea Brent gained 27% to settle at $117.65. The US WTI was not immune as it experienced 28.3% growth to $116.63. A senior manager at Singapore-based OCBC said as long as oil flow does not resume normally via Strait of Hormuz and regional tensions do not subside; prices would continue to remain under constant strain.

As prices kept rising, some Persian Gulf littoral states had no option but to reduce and/or stop their oil supply.

Iran Oil Up 43%

Against the backdrop of such concerns, tracking data showed that Iran’s heavy crude traded at $77.98 on March 4, which jumped to 114.80 by March 31. Meanwhile, Iranian light crude, traded at $79.88 on March 1, jumped 43% to a record $113.70 by March 31.

New Supreme Leader

The global oil market had fallen prey to a strategic error by Washington and Tel Aviv in ignoring Iran’s upper hand in the Strait of Hormuz. In those days, governance in Iran remained unaffected. Ayatollah Mojtaba Khamenei named to succeed his late father as the Supreme Leader. As provided for in the Constitution, the Assembly of Experts appointed the new Supreme Leader in the midst of US and the Zionist Regime strikes.

Petroleum industry managers sent messages of felicitation, and pledged allegiance to the new supreme Leader.

Iran Energy Heart

The war was in its 19^th day that some installations at the Pars Special Economic Energy Zone (PSEEZ) in Assaluyeh came under US and the Zionist Regime bombardment. Tragic news for every Iranian as the 3^rd, 4^th, 5^th and 6^th refineries of South Pars Gas Complex (SPGC) were damaged.

Mohammad Reza Joulaei, director of coordination and supervision on production at National Iranian Gas Co. (NIGC), said some of refining installations at South Pars had been damaged in the strikes. But, he added, gas production was under way normally and national gas grid was in stable conditions. Joulaei noted that gas supply to various areas of Iran faced no restrictions and some units were preparing to be back to production.

The South Pars gas field is the largest gas reservoir in the world. It has been the backbone of energy supply in Iran for years. This massive reservoir is central to gas supply in winter. South Pars accounts for 70% of Iran’s gas supply. Last winter, it supplied a record 730 mcm/d of rich

gas.

Just before the war began, Abdorrahman Salehi, chief supervisor at SPGC, had said sweet gas production target had been met at South Pars. He had said that during last calendar year (to 21 March 2026), two strategic measures including operation of a transmission line connecting the 11^th and 12^th refineries and the targeted management of feedstock in Site 1 had added more than 560 mcm/d to national production, which would be instrumental in boosting national gas grid.

War on Energy Security

On March 24, Minister Paknejad wrote a letter to UN Secretary General Antonio Guterres, warning about the tragic humanitarian and environmental consequences of the US- the Zion strikes on oil and gas facilities. He demanded that these hostile actions be condemned by the UN.

“These attacks, which transcend a limited military operation and represent the beginning of a full-scale war against Iran’s energy security and economy, targeted oil depots and storage facilities in Tehran, and also gas refineries of the South Pars region in the northern Persian Gulf,” the letter read in part. “These attacks not only resulted in the destruction of a portion of equipment and facilities of Iran’s oil and gas industries and caused damages on the Iran’s energy network, but also brought about catastrophic human and environmental consequences.”

“The Islamic Republic of Iran has never initiated any aggression, nor does it seek to escalate tensions in the region. However, the complicity and inaction of certain regional countries regarding the use of their airspace by the aggressors, as well as the regrettable silence of international bodies in condemning these crimes, have emboldened the Zionist Regime and the United States to continue their criminal activities on a broader scale, believing themselves immune from legal and international consequences,” Paknejad wrote.

Renovation Underway

No later had the hostilities ceased than the petroleum industry raced against the clock to rebuild damaged sites. Reparation work got under way at four gas refineries while development projects went ahead. Less than one week after massive attacks on energy infrastructure, Minister Paknejad announced that reconstruction had got under way at the two gas refineries.

In parallel, for the first time, a new responsibility was assigned to NIGC with regards to the reconstruction of two gas refineries in Assaluyeh.

Noting that repairing damage at the Fajr Jam refinery had already been a big job during the 12-Day War, the minister said: “Rebuilding the two gas refineries of Assaluyeh was much more complicated while offering an unrivaled opportunity to demonstrate the potential of NIGC with regard to partnership in big projects.”

Paknejad highlighted “increased activity, allocation of resources and preventing unnecessary costs and increased cooperation between various sectors” were among postwar obligations. He added that activities in the petroleum industry should not be limited to available facilities in the current calendar year.

Saeed Tavakoli, the CEO of NIGC, said: “I swear that Mr. Paknejad, the Minister of Petroleum, was at the scene from Day 1. He held regular meetings and made timely decisions under integrated management to facilitate the success of various sectors including continued oil and gas supply and oil exports under complicated conditions. The Minister was monitoring conditions and timely and positive decisions were key to managing these conditions.”

Tavakoli visited SPGC after NIGC was assigned the task to rebuild the two gas refineries.

During his visit to the 3^rd, 4^th, 5^th and 6^th refineries of SPGC, he observed arrangements for repairing damaged facilities.

Symbol of Resilience

During all these days when enemy jet fighters were targeting strategic and vital spots in Iran, petroleum industry staff were working firmly in the shadow of sanctions so that no harm would be inflicted on energy supply and livelihoods. This resilience had been experienced during the 1980-1988 war when the enemy was targeting the petroleum industry and energy infrastructure in the country.

From the very beginning, Minister Paknejad announced that oil exports was going on while economic resilience guaranteed. He said that these key achievements were the outcome of public cooperation and national coherence under critical conditions.

The minister also touched on development work, management of and saving on costs and maximum use of capacities as the strategies of the petroleum industry under the present circumstances.

As soon as the war broke out, regular meetings were held in the presence of deputy ministers as if it were in the war room. Various issues were discussed and decisions were made about which strategy to adopt.

Minister Paknejad heaped praise on the petroleum industry staff for their cooperation during the third imposed war Iran was dealing with.

Energy Supply

Minister Paknejad held regular meetings with Mohammad Atabak, the minister of industry, mine and trade, Farzaneh Sadeq, the minister of road and urban development, and Hossein Simaei, the minister of science, research and technology.

On April 11, President Masoud Pezeshkian visited the Ministry of Petroleum to appreciate efforts made by the petroleum industry. He reiterated the significance of continued energy supply and provision of services across the country.

On April 15, President Pezeshkian posted a message on X: “I am grateful to the staff and officials of the oil and energy sector for their relentless efforts. During the imposed war, they were working on platforms and forecourts, displaying resilience and responsibility to avoid any disruption in serving people despite being threatened by the enemy. That deserves appreciation.”

In a meeting, attended by National Iranian Oil Co. (NIOC) CEO, members of the Board of Directors and affiliates’ managers, Minister Paknejad said resilience under this war deserved more than appreciation.

He said that NIOC, NIGC and NIORDC service workers did not stop a moment in helping supply people’s needs during wartime. He noted that the petroleum industry would be faced with a more sophisticated mission of rebuilding damaged installations.

National Interests’ Protection

The US- the Zion strikes targeted the chain of supply of gas and other energy carriers, thereby affecting the life of millions of civilians across Iran. Big fires caused by missile strikes on oil and gas facilities and refineries resulted in the massive emission of GHG and toxic pollutants. Such air pollution poses a heavy risk to public health and the ecosystem of the Persian Gulf.

Although the war came to a halt, and is likely to remain on hold, Iran exercises authority over the Strait of Hormuz. Despite imaginations, Iran is not obligated to accept conditions set by the Americans. Even if tensions continue, the storm which rose from the Persian Gulf would blow into energy markets across the globe. The Gordian knot in the Strait of Hormuz can paralyze the global economy. As noted the Supreme National Security Council (SNSC) in its statement, “If the enemy’s surrender in the field turns into a firm political achievement in the negotiations, we will be celebrating this big historic victory; otherwise, we will fight together until all demands of the Iranian nation would have been met.”

NIRODC Fares Better than Expected

The Zionist and American attacks on Iran entered a new phase on their eighth day—a phase in which the targets were no longer just military bases or residential areas, but the country’s vital infrastructure, particularly in the energy sector, came under assault.

On the evening of Saturday, 8 March2026, the Zionist Regime warplanes struck three oil depots in Shahran, Shahr-e Rey, and Aqdasiyeh in Tehran, as well as a depot in Alborz Province. The attacks damaged parts of the country’s fuel supply and distribution infrastructure. According to Minister of Petroleum Mohsen Paknejad, the primary goal of the attacks was to exert direct pressure on people’s lives by disrupting fuel supplies. On 9April 2026, following the announcement of a ceasefire, the Lavan oil refinery facility was also targeted.

Despite the damage inflicted on the oil depots and the Lavan oil refinery facilities, the country’s network for supplying and distributing petroleum products did not experience disruption for even a single day. The Ministry of Petroleum and National Iranian Oil Refining and Distribution Co. (NIORDC), by activating pre-designed crisis management scenarios, managed to maintain a stable flow of fuel supply and steer the country through a crisis that could have disrupted the daily lives of millions of people. Mohammad Sadeq Azimifar, the CEO of NIORDC, emphasized during a visit to the refinery that the damaged facilities would be brought back online in the shortest possible time.

Stable Fuel Supply

In the early hours following the attack, NIORDC issued a statement announcing that several oil depots and product pipeline facilities in the provinces of Tehran and Alborz had been targeted by missile strikes, with the explicit aim of directly harming the population by damaging this sector and disrupting the daily supply of gasoline needed by the public. In the attack, four employees of the company martyred while on duty.

The statement noted that despite the damage inflicted in this sector, relying on strategic reserves, the activation of alternative routes, and pre-established contingency measures, the fuel supply situation remains under control, and there is no concern regarding the sustainability of products distribution in Tehran and Alborz provinces.

Keramat Veis-Karami, the CEO of National Iranian Oil Products Distribution Co. (NIOPDC), said fuel reserves are at a favorable level, and the distribution of gasoline and other petroleum products continues as usual across the entire country.

The attack on the oil depots, in addition to causing damage to infrastructure and petroleum product pipelines, has resulted in severe environmental pollution, threatening the health of residents in Tehran and Alborz provinces.

One of the main objectives of attacking the oil depots was to disrupt the fuel supply during wartime. However, NIORDC, under the 14^th Administration, had not only succeeded in increasing the production capacity of petroleum products but had also built up sufficient reserves to ensure that people’s daily lives would not be endangered. Striking this infrastructure, the Zionist Regime and the United States had assumed they could disrupt Iran’s fuel supply. Yet, that never happened. Throughout the war, no disruption occurred in fuel supply or in the welfare of the people in this sector, and the Ministry of Petroleum made every effort to ensure the timely provision of petroleum products and the fuel needed by all units.

The production of over 110 ml/d of gasoline, alongside the maintenance of operational reserves, played a crucial role in sustaining the stability of the fuel supply and prevented any interruption in meeting the country’s consumption needs. This stability was achieved on the basis of a refining capacity of approximately 2.37 mb/d, relying on nine crude oil refineries and one gas condensate refinery in the country. In practice, this underscored the position of the infrastructure as one of the fundamental pillars for the continued production and distribution of petroleum products under crisis conditions.

Lavan Refinery Attacked

The Zionist Regime and American attacks on Iran, and Iran’s retaliatory responses to these hostile countries, continued until April 9, when a two-week ceasefire between Iran and the US announced earlier that day. However, after the ceasefire declared, the Lavan oil refinery facilities were also targeted around 10 a.m. on 9 April 2026. The attack damaged some of the operational units and process infrastructure, causing a fire in a section of the facility. Immediately after the incident, the safety teams, firefighting units, and operational personnel stationed at the refinery sprang into action, and firefighting and containment operations began in the shortest possible time—an effort that prevented the spread of damage and any loss of life.

The Lavan oil refinery, with an operational capacity of approximately 57,000 b/d, is considered one of the key refining complexes in southern Iran. Its role is significant not only in supplying a portion of fuel to the southern regions; but also within the production and export chain of petroleum products. The refinery’s feedstock is supplied from the Belal, Reshadat, and Resalat oil fields, and received gas condensates from South Pars. Its production

portfolio includes gasoline and diesel for the domestic market, as well as products such as naphtha, LPG, fuel oil, and sulfur for export.

In addition to its operational role, the geographical location of this refinery on Lavan Island, with direct access to the open waters of the Persian Gulf, makes it one of the strategic points for maritime export operations—a position that enables the direct transfer of petroleum products to regional and international markets.

Over recent years, the development strategy of the Lavan refinery has focused on upgrading the quality of its production portfolio and reducing the share of lower-value products. Hamid Reza Mahjoub, the refinery’s CEO, who had spoken with Iran Petroleum before the Ramadan War attacks, had said: “The refinery’s current focus is not on enhancing nominal capacity, but on quality improvement and enhancing the added value of the production portfolio.” Within this framework, projects such as the construction of VB units, bitumen production schemes, sulfur removal from fuel oil, and the production of specialty solvents—with a total investment of over €180 million—have been on the agenda. These projects were defined with the goal of enhancing added value and aligning with environmental standards. However, the recent attack and the damage to part of the facilities have caused delays and a reassessment of the timeline for some of them.

In this regard, Mahjoub stated after the incident: “Efforts are being made to bring the refinery back online in the shortest possible time.”                                       

Field Visits

As part of the ongoing process of managing the situation resulting from the attacks on the country’s energy infrastructure, the on-site presence of senior oil industry officials at operational facilities was prioritized as one of the main pillars of crisis management. The presence—carried out amid serious constraints on transportation infrastructure, particularly damage to airports and disruptions to the national flight network—was achieved mainly via ground routes, requiring additional time and considerable difficulty.

Under such conditions, with the ongoing threat of continued attacks on vital energy infrastructure still looming, senior officials of the Ministry of Petroleum remained on the scene despite operational risks and the possibility of further attacks. Directly visiting operational areas and damaged facilities, they closely assessed the process of supply, distribution, and restoration of operational capacities. This level of on-the-ground presence effectively enabled faster, more precise decision-making grounded in operational realities.

In separate visits to operational facilities in the provinces of Isfahan, Fars, and Hormuzgan, Azimifar personally monitored the fuel production and distribution process by visiting refineries, oil depots, and product transfer centers.

In another series of visits, Veis-Karami toured facilities in the Qazvin and Hamedan regions, where he closely examined the details of petroleum product storage, transfer, and distribution processes, and assessed the fueling operations in those areas. During these visits, he emphasized the key role of specialized human resources, transportation fleets, and storage infrastructure, stating that the sustained stable performance of the fuel distribution network results from the coordination among these components.

This series of visits—conducted while the country was facing a direct threat to its energy infrastructure—reflects an approach grounded in on-site presence, operational awareness, and integrated coordination at the management level of the oil industry. This approach played a decisive role in maintaining the continuity of the country’s fuel supply and distribution chain under critical conditions.

Beyond Expectations

At the highest levels of national governance, the performance of the oil industry during this period received notable attention. First Vice President Mohammad Reza Aref, during a visit to the NIORDC, expressed gratitude to the industry’s personnel and stressed that the enemy’s primary goal in attacking energy infrastructure was to disrupt people’s daily lives. According to him, the experience of the 1980-1988 Imposed War also demonstrated that Iran’s oil industry never ceased its operations even under the harshest conditions.

He stated that the performance of NIORDC, under circumstances where the enemy sought to disrupt infrastructure, far exceeded expectations. The enemy’s objective was not merely to damage infrastructure but to create public dissatisfaction by disrupting services. However, the personnel in the sector, through round‑the‑clock efforts, neutralized this plot.

Aref also stated during meetings with the Minister of Petroleum, Minister of Industry, Mining and Trade, and Minister of Roads and Urban Development, as well as the head of the Planning and Budget Organization that Iran’s oil industry never shut down despite the unjust attacks by enemies during the imposed war. He said: “The cohesion between the people and the government is the guarantor of overcoming circumstances and foiling the enemy’s plots."

He noted that during the 1980-1988 war, Saddam and his allies inflicted serious damage on the oil industry, yet the industry did not shut down even for a single day. He added: “In that period as well, the country was able to manage the situation in such a way that people continued their normal lives. Today, the same solidity between the people and the government ensures that we can overcome conditions and defeat the enemy’s plots.”

“We are a government of ‘defense and development.’ Just as we have a plan for staunch defense and support the battlefield and people’s lives, we will also compensate for the damages with all our might and build the country,” Aref said.

The whole events during this period demonstrates that targeting a portion of the oil industry’s vital infrastructure—including oil depots and refining facilities—could have directly disrupted the country’s fuel supply and, consequently, the daily lives of the people. However, the coordinated performance of the Ministry of Petroleum and NIORDC prevented such disruption.

The overall events of the period show that the targeting of part of the oil industry’s critical infrastructure could have destabilized the nation’s fuel supply. Yet the continued production at refineries, the activation of alternative routes in the distribution network, and the timely management of conditions at damaged facilities prevented any shortage in the supply of petroleum products.

This experience, once again, demonstrated that the country’s refining and distribution network—relying on its operational capacities, strategic reserves, and skilled human resources—possesses a significant level of resilience in the face of crisis conditions; a resilience that ultimately ensured the stability of one of the nation’s most vital public services.

Petchem Sector Resilient to Firefight  

It was on March 30 that Iranian petrochemical infrastructure, which is directly linked with livelihood of Iranians, sourcing raw materials for industries and national hard currency earnings came under US-Zionist Regime attack.

That indicated the willingness of warriors to directly target vital infrastructure closely linked with public welfare. Striking energy infrastructure would not be limited to industries; rather it can be followed by a chain of economic and social consequences, thereby adding to the urgency of safeguarding and resilience of this key industry.

The attacks against petrochemical facilities extending from Tabriz to Mahshahr and Assaluyeh inflicted damage on production and auxiliary facilities. However, rapid reaction by safety, firefighting and crisis management teams prevented any extension of damage; and conditions were swiftly back to normal.

Hassan Abbaszadeh, the CEO of National Petrochemical Co. (NPC), during his visits to damaged petrochemical plants expressed hope that the facilities would return to normal production in the shortest possible time to show once more the strength and resilience of Iran’s petrochemical industry. The head of NPC production control, Saeed Baghbani, has also said that the enemy intentions would be neutralized by optimal consumption of energy carriers in the country.

Petchem Guarantees Stability

The first month of the current Iranian calendar year (starting on 21 March 2026) was one of the most tumultuous periods in Iran’s petrochemical industry in the past decade. The year had started with an outlook for increased production capacity, development of midstream projects and investment attraction. But suddenly, several major plants and associated infrastructure came under attack.

These attacks started in Tabriz in northwest, only to be followed in Mahshahr and Amir Kabir petrochemical plants. Although damage controlled thanks to rapid intervention by safety and crisis management responders, the economic impact of the unequal full-blown war launched on Iran is evident more than ever.

In a bid to have a clear understanding of the impact of these disasters, the petrochemical industry should be viewed as it is: the vital artery of hard-currency earnings and the very basis of many chains of industrial manufacturing in the country.

With 79 operational plants, the petrochemical industry has 100 mt/yr capacity, accounting for 30% of non-oil exports. It is not merely an economic sector; rather, it is the pillar of stability of hard-currency revenue and supplier of raw materials to hundreds of small and large-sized industries. From packaging and textile to car parts manufacturing and food industry, wherever there are traces of polymer, aromatics, olefin or methanol, Iran’s petrochemical industry is visible.

Back in January, Abbaszadeh had said in the first gathering of petrochemical investors that this sector should see its output capacity reach 131.5 mt by the end of the 7^th Five-Year National Economic Development Plan. To that end, $26 billion in investment is forecast, of which $13 billion has been earmarked.

According to NPC data, petrochemical production hit 60.2 mt during the first three quarters of last calendar year with sales recorded at 35.3 mt. During the same period, Iran exported 24.7 mt of petrochemicals worth $9.7 billion.

The petrochemical industry makes an 8% share of gross domestic product (GDP). Hamid Reza Ajami, director of investment at NPC, said the petrochemical industry accounted for about 30% of non-oil exports. That indicates the strategic significance of this industry in national economic development.

Under such circumstances, striking a utility or an auxiliary unit is not just an industrial accident; rather it is a disruption that can go beyond a halt in a production line or increased price of consumer products.

Assaluyeh and Mahshahr, which were at the receiving end of strikes, are known as the petrochemical hubs of Iran. With 28 production plants and annual production capacity of 48.4 mt, Assaluyeh constitutes the largest petrochemical hub in Iran. It is followed by Mahshahr with 21 production plants with 25.8 mt annual capacity.

Petchem Strikes for Pressuring People

The Tabriz petrochemical plant came under attack early on March 30. Firefighting and rescue teams were quick to manage the situation. No human casualties were reported.

Five days later, the Mahshahr petrochemical facility came under US- Zionist Regime strikes. NPC reported at the time that firefighting teams were dispatched immediately to contain the fire.

Baghbani said the strikes were aimed at ramping up pressure on people and put a strain on the supply of their needs. He lamented that the damage to auxiliary installation would harm the entire petrochemical industry, saying: “The enemy knows quite well that we will finally manage to rebuild the damaged installations. Therefore, it tries to ratchet up the pressure on the country, particularly the Ministry of Petroleum, in order to overshadow energy carriers. By saving on our consumption of energy carriers, we may thwart enemy plots.”

Three nights after, a unit at the Amir Kabir Petrochemical Plant located in the Special Economic Petrochemical Zone came under enemy attacks.

Staff Killed

The brutal strikes on the Mahshahr Special Petrochemical Zone (MSPZ) led to the death of a number of staff of Fajr Energy Khalij Fars

Co. This criminal act elicited strong reactions.

Minister of Petroleum Mohsen Paknejad sent a message, saying: “News of martyrdom and injury of a number of petrochemical industry staff at MSPZ during the ruthless bombing by oppressive and blood-sucking enemies caused pain. You, the petroleum industry staff, are honest children of this land. You are at the forefront of service and economic mobilization.”

Abbaszadeh also expressed sympathy with petrochemical staff, saying, “Undoubtedly, Iran’s petrochemical industry, as a value-generating industry and pioneering economic sector, along with its brave staff, are ready to serve the Iranian nation by seeking assistance from Allah the Almighty and putting up a brave face in safeguarding and promoting the Islamic Republic.”

Field Visit to Damaged Facilities                                                  

Several hours after the strikes, Abbaszadeh, along with a number of petrochemical industry managers, conducted a field tour of petrochemical installations in Mahshahr to learn about the damage inflicted thereupon.

During this visit, Abbaszadeh talked with staff and laid special emphasis on human resources as the main pillar of the petrochemical industry.

Reiterating the urgency of reconstruction, he said, “Thanks to relentless efforts made by the staff, these plants would be back to production in the shortest possible time so that once more the stability and strength of Iran’s petrochemical industry would be proven.”

He also said a system had been set up to assess damage, noting that the Ministry of Petroleum and the petrochemical sector were working alongside each other to provide more assistance.

The petroleum industry crisis management, led by the Minister of Petroleum and the CEO of NPC, entered into action shortly. Specialized teams were set up immediately to assess damage so that reconstruction could begin soon. The priority as given to the restoration of units with least damage. The objective was to manage the flow of feedstock and energy in a bid to prevent any chain halt and exercise supervision on the impact of polymer and base products’ market. These measures indicate the maturity of this industry in dealing with crises.  

Damaged Units Prioritized

On April 13, in a meeting attended by NPC CEO and managers, Minister Paknejad stressed the need for the operation of damaged units. He said that during the 40 days of conflict, no shortage was felt in the country and Iranians were happy with the way the government was serving them.

Abbaszadeh said he had visited Mahshahr and Assaluyeh, adding: “Reconstruction and planning for auxiliary services of plants have already begun. In collaboration with NIGC and NIORDC, we are trying to improve the performance of petrochemical companies.

Crisis management was one of key issue raised in the meeting. Abbaszadeh said despite tough conditions, crisis management had been done satisfactorily aimed at minimizing damage.

He also said that the petrochemical industry would be back to normal, adding: “Several groups, including damage assessment group and quick operation group, have been set up.”

Impacts of Strikes

In full disregard of international humanitarian law, banning strikes on vital infrastructure and civilian life, the US and Zionist Regime targeted petrochemical plants, inflicting heavy damage on this industry and public welfare. By supplying raw materials for many products including plastics, packing, apparel, car parts and chemical fertilizers, the petrochemical industry is directly involved with everyday life. Therefore, these attacks caused many problems for the petrochemical industry and people. However, efforts made by the Ministry of Petroleum and NPC proved fruitful in preventing environmental and human crises.

The high share of the petrochemical industry in non-oil exports, $9.7 billion revenue during the first three quarters of last calendar year, 8% share of GPD, 100-mt annual production output, downstream industries’ dependence on petrochemicals and their direct impact on consumer products show that the petrochemical industry is not merely an exporter; rather, it provides economic welfare. Inflicting damage on the petrochemical industry would not be a mere flare; rather, it would damage people’s everyday life, national hard-currency earnings and stability of consumer commodities’ market. That is why many specialists view any strike on energy infrastructure as attack on economic structure and welfare because it would have a chain impact, starting from price hike in raw materials to decline in exports and loss of hard-currency revenue.

Therefore, targeting this infrastructure would not be limited to metal equipment, storage tanks or pipes; rather, it would harm a segment of national economy that is responsible for hard-currency earnings and stability of production chain.

These strikes indicated that any damage on the petrochemical industry would give rise to extensive economic and human consequences due to its direct impact on welfare, energy security and hard-currency earnings.

Iran Upper Hand in Strait of Hormuz

Shuaib Bahman

Intl. Affairs Analyst

In the wake of America and Zionist Regime’s war on Iran, the global energy market outlook is faced with unprecedented challenges. Shipping operations in the Strait of Hormuz have hit daily growing geopolitical complications in addition to restricted access. These developments indicate how vital maritime chokepoints can quickly grow from normal commercial routes to strategic leverage so as to redefine the dynamism of international energy security.

Before the US-Zion war started, about 20% of global crude oil and liquefied natural gas (LNG) transited via this waterway, which offered safe passage toll-free. Since the war broke out, only a handful of ships confirmed by Iran were granted safe passage after paying tolls. Now, Iran is insisting on its future control over the strait as a precondition to ending the war. That would define a new legal status for the Strait of Hormuz, not to mention it would have impacts on global energy markets.

Oil Shock and Supply Chain

Oil was traded around $85 a barrel before the war. The prices have surpassed $100, and have barely changed. Well below the record $147 in 2008 (equivalent to $205 today) and the whopping $139 in March 2022 (equivalent to $157 today), it signals a creeping oil shock.

To get around the Strait of Hormuz, there are two alternatives; the Yanbu pipeline in Saudi Arabia with capacity to carry 5 mb/d and the UAE pipeline with 1.5-2 mb/d capacity. However, they may meet a portion of global oil demand, failing to resolve Qatar’s LNG and condensate exports. With 80 mt delivery, Qatar was the world’s second largest LNG exporter in 2025.

Closure of the Strait of Hormuz has largely affected refined products. The shortage of heavy and high-sulfur crude oil, which European and Asian refineries depend on, as well as gasoil and jet fuel production, has pushed prices of products high. In the US, diesel prices have hit $5 per gallon, the highest since December 2022. The shock is doubled for Asian and African economies that overwhelmingly depend on petroleum product imports. Increased fuel prices increased the cost of food and chemical fertilizer transport, thereby adding to inflationary strain on impoverished households.

Fragile Alliances

Despite its military superiority over Iran, the US failed to force Iran to change its policy vis-à-vis the Strait. The decision by Russia and China to veto a Bahrain-drafted resolution at the UN Security Council and the refusal of European and Asian allies of Washington to join its self-styled coalition for reopening the Strait indicate a widening gap in international consensus against Iran. [Persian] Gulf Cooperation Council (GCC) member states heavily depend on energy exports via Strait of Hormuz. But they are now deeply frustrated. On the one hand, they demand that the Strait be reopened while on the other, they fear escalation of tensions of Iran’s continued control over the waterway.

At the international level, governments have been divided. US President Donald Trump demanded from the very beginning that a coalition be set up to help reopen the Strait while European nations, Canada, Australia, Japan and South Korea refused to join in. Germany’s defense minister openly asked when the US’s powerful fleet fails to reopen the Strait of Hormuz how can European vessels be of help.

Among GCC states, only the UAE considered joining an international coalition to reopen the Strait. Saudi Arabia has preferred to avert direct confrontation, and due to its entire dependence on LNG exports, Qatar is on shaky grounds.

Future Scenarios and Perspective

Based on available evidence and analysis of the behavior of actors, three scenarios are likely for the future of Strait of Hormuz:

Scenario I: Selective Passage and Sea Blockade

In this scenario, Iran goes ahead with its current strategy; it would neither fully block nor fully open the Strait; oil prices would vary from $100 to $120 and insurance companies would levy heavy premiums for tankers; and the war would turn into a conflict of attrition that may take months to ramp up economic pressure on Europe and Asia. The US would resort to sea blockade of Iran, which is likely to cause some clashes along Iran’s southern coastlines. The higher the intensity of these onshore or offshore conflicts, the higher energy prices across the globe. This option would be costly for Iran; the US would also face growing energy prices and inflationary pressure.

Scenario II: Limited US Intervention

Under pressure from public opinion and in the run-up to the November 2026 midterm elections, President Trump may order limited air, sea and land operations to reopen the Strait. The objective may be to seize the strategic islands of the Greater Tunb, the Lesser Tunb and some parts of Qeshm or Larak Islands and setting up a restricted military zone. That would expose US forces to Iranian strikes. In other words, as soon as US troops set boot on the Iranian islands, they would be simply targeted by Iranian missiles and drones. This scenario may succeed only if anti-ship mines are cleared while heavy casualties would not be ruled out. That would raise the public opinion against Trump.

Scenario III: Regional War

In this scenario, Iran would resort to its final lever in response to US military intervention. It would entirely block the Strait by laying mines and fire long-range missiles at Saudi and Emirati oil facilities. Separately, Yemen would block the Bab al-Mandeb Strait and target US and Zion commercial vessels. That would drive oil prices up to $150 and even higher, bring about stagflation and a 1980s-style tankers war would be likely.

Scenario IV: Final Deal

This scenario would mean recognizing Iran’s management of the Strait (inspection, coordination and maybe tolling) in return for the end of war and restoration of stability. That would be strategic victory for Iran, which would cost Trump dearly.

The fact is that Iran has never been willing to close Strait of Hormuz and has always insisted on the safety of shipping operations, particularly energy delivery from the Persian Gulf. More than 6 weeks into the war, Iran has not fully blocked Strait of Hormuz and the de facto closure applies only to US and Zionist Regime-linked vessels.

If the US agrees to terms and conditions set by Iran for ending the war and enter logical interaction instead, normal conditions are likely to return to Hormuz. Definitely, Iran would apply its own conditions on tankers and commercial vessels. But this scenario would be the best for global energy markets as it can largely stabilize oil and gas prices. However, realization of this scenario largely depends on the US’s willingness to refrain from military invasion of Iran and return to the negotiating table.

Conclusion

In the current US-Zionist Regime war on Iran, more than an energy artery, the Strait of Hormuz has become a symbol of strength in international order. The US imagined that by its military and technological superiority, it would be able to overcome Iran quickly. But it hit a deadlock. By spending much less than the Pentagon’s budget and relying on its own weapons, Iran has affected the global economy and changed deterrence equations in its own favor.

In general, it has to be noted that Iran’s control over Strait of Hormuz is a strategically undeniable fact. Iran’s naval doctrine has been successful in realizing objectives without direct confrontation with the US Navy. Strategic developments in Hormuz indicate that by applying a “selective access regime”, Iran has managed to change the balance of power in its favor in this vital waterway. The current framework of access grants safe passage to aligned nations while denying access to allies of the West. That represents a major development in global energy geopolitics. This new regime would ensure the energy security of Iran’s allies while sending a clear message to Washington and its allies that “cooperation with Iran is key to access to the Persian Gulf energy”.

Oil & Gas Market: Two Scenarios

Ehsan Jenabi

Introduction

Having a glance at the oil market history, one may notice that in the past oil market has witnessed some oil supply disruptions; however, the imposed Ramadan war jointly initiated by the US and Zionist Regime against Iran starting on 28 February 2026, has been a turning point that has caused one of the largest oil supply disruption ever recorded. Iran as a major oil reserves holder, and one of the advocates of “depoliticized energy sector”; following American-Zionists’ air strikes which jeopardized global energy security, unwillingly responded to the US aggression and unilateralism via military reactions and of course  as a last resort, partial blockading of the Strait of Hormuz. The movement has influenced the global oil and gas markets, and global energy equations underwent significant development, which led to shortage and price fluctuations. According to the September 2025 forecasts, global oil supply was 106.6 million barrels per day (mb/d), of which 20% flows via the Strait of Hormuz and this has been disrupted. While witnessing oil production cuts of 10 mb/d, the market lost some 20 mb/d of oil and significant volumes of LNG due to the halted export via the Strait of Hormuz and infrastructure damage. Because of the disruption, global energy markets immediately tightened and reacted to the political tension and the conflict going on in the Persian Gulf region.

Sharp Rise in Prices

Oil prices surged from - $72 in the pre-war period to nearly $120 at peak then fluctuated around $90 + per barrel. Concurrently, European gas prices jumped-20%+ and remain elevated. In addition, the LNG prices (especially in Asia) spiked dramatically due to supply outages mainly in Ras Lafan LNG facilities of Qatar. It could be argued that markets are not just tightened- they are highly unstable and volatile, reacting to various issues: every military or political update, the statements, disputes and/or comments of the American and Iranian authorities, as well as the likelihood of a prolonged war and/or signing a peace agreement.

Infrastructure Attacks & Shipping Disruptions

Energy facilities (LNG plants, refineries) have been targeted in the hostile countries in the Persian Gulf, which host the US military bases used against Iran. As a result, tanker traffic through Strait of Hormuz (being under thorough control of Iran) halted at times, and just some tankers belonging to countries which are not assisting the US-Zionist forces, received the permit to pass through the Strait.  It is true to say supply uncertainty premium, has led to high prices.

Global Economic Spillovers

Due to the rivalry for purchasing crude oil, and rising energy costs; inflation rose globally. For instance, gasoline prices went up sharply (around 30% surge in some markets). The rising gasoline prices, especially in the US could be bad signs for the Republicans in the upcoming Congress elections. It could be concluded that all the above issues may lead to inflation and weaker economic growth.

Emergency Responses

Under the instruction of the International Energy Agency (IEA), the IEA members are supposed to release 400 million barrels of their Strategic Petroleum Reserves (SPR) attempting to curb prices, and establish the so-called relative equilibrium in the market. It is noteworthy that on 10 April 2026, the US released 8.480 million barrels of its SPR. The US intends to withdraw 172 million barrels from its SPR. Meanwhile, to get over this situation some countries diversified supply. For instance, US shale has, once more, become one of the alternatives in the market. On the demand side, we have witnessed some demand destruction, due to lower consumption, which is the direct result of high prices not being affordable by many consumers mainly in less developed countries.

Although there has been attempts on the global level (e.g. the 2-week ceasefire agreement, and Islamabad talks) to put an end to the conflict, two probable scenarios dealing with the situation are as follows:

1. Prolonged war:

Expected direction: Prices may stay high or rise further.

Key mechanisms:

1. Persistent supply constraints:

Traditionally, a prolonged war is expected to lead to shortage in the market, amplified uncertainty, and higher prices. Persistent supply constraints due to the blockade of Strait of Hormuz may result in structural shortage. When it comes to LNG market, one may conclude that LNG outages (e.g. Qatar LNG plants damage) may have lasting implications; in other words, its repair could require years; therefore the countries, which have concentrated on meeting their energy needs via importing LNG, may severely suffer. Last but not the least; in case the conflict goes on, oil prices could stabilize in the $100- $120+ range, or possibly higher.

1. Geopolitical risk premium becomes permanent

Even if oil flow becomes normal physically, yet again the market sentiments and fear keeps prices elevated. In other words, probable and potential disruption emanated from military attacks, sanctioning major producers as well as shipping risks may play an important role in shaping upcoming prices.

1. Gas markets hit even harder

Although gas market is regional and less flexible, and the prices in the long-term contracts are normally oil- indexed, supply shocks may lead to price hikes. It is noteworthy that Europe and Asia are the most vulnerable gas consumers. Gas prices might drop but remain elevated vs pre-war levels, and volatility is expected to decline significantly.

1. Secondary impacts amplify prices

Variety of factors:  Iran’s intention to receive toll ($1/b) from vessels, increasing the shipping insurance fee, longer trade routes due to blockage of Strait of Hormuz, and finally refining/ logistic bottlenecks are among the main factors that may amplify oil and gas prices.

2. War end

Expected direction: prices fall- but not back to pre-war levels.

Short –term (weeks- months)

In case the war ends, oil and gas prices may drop quickly; however, shipping recovery takes time (weeks+). In addition, supply chains might remain disrupted. We might expect gradual decline, not a crash. Prices may fall from -$90- $100 range to $75-$ 85.

Medium-term (up to 12months)

The past experience indicate that even after reaching a peace agreement, markets bitterly remember how fragile supply is; and  the probable conflict again contributes to uncertainty, and lack of confidence in future. Another issue is that LNG and oil facilities may take months/ years to fully recover and /or become operational. When it comes to inventories and SPR, it should be mentioned that  in the post-war period, strategic reserves must be replenished, which will in turn lead to enhanced demand and supporting prices , as the IEA members need to refill their SPR. Prices may stabilize above pre- war ($70).

Conclusion

Taking into account the market status in April 2026, global oil and gas markets are in a high risk, supply is constrained, and volatility and uncertainty is dominating the market.

 In case peace agreement is not finalized and signed, prices are expected to surge, and might touch $120/b or possibly higher.

On the contrary, in case a peace agreement is reached; prices are expected to fall, but not fully back to the pre-war period due to lasting damage and risk premium.

OPEC at Receiving End of Iran War

The Organization of the Petroleum Exporting Countries (OPEC) may have borne the brunt of the US-Zionist Regime aggression of Iran. Some major Middle East producers are key members of OPEC.

The OPEC Secretariat said in its latest report that the 12-member producer group’s output was down 7.878 mb/d to 20.788 mb/d in March month-on-month.

Despite a full-blown was launched by the US and Zionist Regime on Iran on February 28, Iran’s March output was down only 182,000 b/d to stand at 3.06 mb/d. Iran’s oil production averaged 3.263 mb/d in 2025, barely changed from the 3.257 mb/d the year before.

OPEC’s leading producers in March were Saudi Arabia (7.799 mb/d) and Iran.

Furthermore, non-OPEC oil producers supplied totally 14.267 mb/d March, up from 14.092 mb/d registered in February. The largest share went to Kazakhstan with 251,000 b/d output.

OPEC and its allies together, collectively known as OPEC+, produced 35.055 mb/d in March, down 7.702 mb/d month-on-month.

Iran’s heavy crude oil price gained $57.51 in March from February to reach $124.10. In 2025, Iran’s heavy crude oil traded at $77.31 on average.

ORB Up Month-on-Month

OPEC’s oil reference basket (ORB) value in March reached $116.36, up $48.46 from the preceding month. West and North African Basket components – Bonny Light, Djeno, Es Sidere, Rabi Light, Sahara Blend and Zafiro – increased by an average of $32.51 per barrel month-on-month to $102.40. Multiple-region destination grades including Arab Light, Basrah Medium, Iran Heavy and Kuwait Export, rose on average by $54.72 month-on-month to $121.82 per barrel. Murban crude rose on average by $41.41 month-on-month to $110.86, and the Merey component increased by 433.61 per barrel month-on-month to settle at $85.92.

OPEC’s monthly report also forecast global demand for crude oil to grow 1.340 mb/d next year to hit 107.870 mb/d.

Futures Market

According to the OPEC Secretariat, crude oil futures moved sharply higher in March, rising amid highly volatile trading as geopolitical tensions intensified, boosting risk premiums and adding to concerns about global oil supply and shipping operations. Disruptions in shipping activity caused concerns about regional supply flows, while strong buying of prompt spot market barrels, output cuts, and declarations of force majeure further supported the upward price momentum.

The sharp rise in futures prices was accompanied by elevated volatility and heavy trading throughout March, the report said. That reflected increased uncertainty on the availability of near-term supply and the growing risk premium associated with disruptions to Middle East trade flows. In the meantime, the oil futures forward curve steepened significantly, indicating increased concerns about tightening prompt supply conditions.

Meanwhile, concerns over prolonged geopolitical risks dominated market sentiment, largely overshadowing other developments, including reports of larger-than-expected build ups in the US commercial crude stocks over the month, coordinated crude oil releases from strategic petroleum reserves and indications that certain sanctioned oil shipments were temporarily allowed to proceed.

The forward curve for Brent futures, as a global benchmark, steepened significantly in March, compared to February. ICE Brent’s M1-M6 spread hit $35 a barrel on a daily basis, evidence indicating that investors were pricing in a considerable tightening of the global market in the short term. Strong demand for North Sea prompt-loading cargoes and the reduction in medium-sour supply into Europe supported the front-month contract and strengthened the ICE Brent futures forward curve. The ICE Brent front-month premium to the third month widened month-on-month by $8.19 a barrel to a backwardation of $9.17.

The GME Oman forward curve steepened sharply in March, particularly at the front end, as significant supply disruptions in the Middle East pushed front-month prices markedly higher relative to forward months. On a monthly average, the GME Oman M1-M3 backwardation widened month-on-month by $10.36 a barrel in March to $11.21 from a backwardation of $0.85 a barrel in February.

Hedge Funds Turn Bullish

Hedge funds and other money managers turned increasingly bullish on oil in March, sharply boosting their net long positions amid large supply disruptions and growing oil prices against the backdrop of geopolitical tensions.

The sharp rise in oil futures prices prompted speculators to close more short positions as they managed their previous bearish bets, while others accumulated additional long positions.

The positioning build occurred alongside a steepening of the front end of the forward curve, indicating that financial flows were closely aligned with tightening prompt market conditions and rising geopolitical risk premiums.

The long-to-shot ratio of speculative positions in the ICE Brent rose to 12:1 in late March, from 5:1 in the same month. However, NYMEX WTI long-to-short ratio remained unchanged over the month at 2:1.

For the week ending March 31, total open interest volumes related to ICE Brent and NYMEX WTI futures and options increased in March by 5.5% to stand at 8.6 million contracts.

€120mn Tous Gas Field Come Online

President Masoud Pezeshkian inaugurated Tous gas field development project via videoconference. The role of this field in strengthening the stability of the gas supply network in the northeast of the country and supplying feedstock to the Shahid Hasheminejad refinery in Sarakhs has created a strategic position for it in the gas supply chain of eastern Iran. At the inauguration ceremony, Pezeshkian, while appreciating the efforts made by petroleum industry specialists, said, “The resources obtained from collecting and preventing gas wastage should be spent on the path of development and prosperity of the host regions.”

For his part, Minister of Petroleum Mohsen Paknejad highlighted the significance of the project for northeastern Iran, saying: “The development of Tous gas field and its complementary projects are part of the Ministry of Petroleum’s program to enhance the stability of the gas network in the remote areas of the country.”

East Supply Chain

Tous gas field is located 100 km northeast of Mashhad and 50 km from the Shahid Hasheminejad refinery. With an in-place gas volume of approximately 58 bcm, it is considered one of the important gas fields in eastern Iran. The Tous field was discovered in 2003, and its development operations commenced in 2023.

The development plan for this field has been executed with an investment of €120 million, relying on domestic resources. The production capacity of Tous field in its initial phase is set at 3 mcm/d of natural gas, and is planned to reach 5 mcm/d. Gas production from this field is underway with the aim of supplying part of the feedstock for the Shahid Hasheminejad refinery and strengthening the gas supply network in the northeastern region of the country.

As part of the implementation of this project, drilling operations for four wells has been completed, reaching an average depth of 3,700 meters. Additionally, approximately 70,000 inch-diameter units of welding and piping operations have been carried out across diameters of 2, 4, 6, 8, and 16 inches. This has been complemented by over 1.6 mcm of excavation work and more than 300,000 cubic meters of backfilling. On the structural side, 3,000 tonnes of rebar work, and

 installation of metal structures have been completed, along with 40,000 square meters of formwork and over 40,000 cubic meters of concrete pouring.

The implementation of Tous gas field development project created job opportunities for approximately 1,200 individuals during the construction and installation phase, and generated 180 direct jobs during its operational phase. Furthermore, the project recorded a notable safety performance by achieving 280,000 persons-hours of work without a lost-time injury, demonstrating significant compliance with occupational health and safety requirements.

Less Dependence on Gas Imports

The Tous gas field development project has been implemented to strengthen the stability of the gas supply network in the northeast of the country and to partially supply feedstock to the Shahid Hasheminejad Refinery. This refinery is one of the main gas processing centers in the eastern Iran, and ensuring its stable feedstock supply plays a direct role in sustaining gas delivery to the provinces in this region.

Based on the defined objectives of this project, gas production from the Tous field will compensate for part of the feedstock shortage at the Shahid Hasheminejad refinery. It will also help enhance the stability factor of the gas distribution network in the northeast of the country, particularly during peak winter consumption periods. The development of this field is also on the agenda with the aim of reducing the region’s gas network dependency on foreign sources and achieving independence from the Turkmenistan gas contract.

Minister Paknejad announced that currently, the Khangiran and Gonbadli fields are the only active gas fields in the region, supplying the majority of the gas consumption for the northeastern provinces. According to him, during the cold seasons and with increased residential consumption, the gas network in these areas experiences a drop in pressure. The development of the Tous gas field, along with complementary projects, has been planned to address this challenge.

3 mcm/d Supply Capacity

The CEO of National Iranian Oil Co. (NIOC) Hamid Bovard said East Oil and Gas Production Company (EOGPC) is responsible for supplying gas to five provinces of the country, with total gas production in this region reaching approximately 65 mcm/d. Within this framework, Tous gas field has been added to the portfolio of eastern gas fields as one of the new development projects.

According to Bovard, the development of the Tous field is being carried out for the first time since the 1979 Islamic Revolution, and the commencement of its production is part of the plan to develop new gas fields under the 14^th Administration. Alongside this project, other exploration activities are also underway in the northeastern region of the country, aimed at identifying new gas potentials.

Paknejad has also announced that with the commissioning of the surface and subsurface facilities of the Tous field, gas production from this field has initially increased by 1.5 mcm/d. He stated that as the project continues, this amount will reach 3 mcm/d next calendar year. This production increase is aimed at strengthening the pressure of the gas network in the remote areas of the northeast of the country.

The development of the Tous field, with a €120 million investment and relying on domestic capabilities, is part of the Ministry of Petroleum’s approach to increasing domestic gas production and completing the supply chain in consumer regions. The field, alongside storage and compression projects, has been defined as a new component of the northeastern gas network.

Tehran-Moscow Talks; New Horizons in Energy Equations

The 19^th Russian-Iranian Business Council (RIBC) gathering was held for three days, running from February 15 to 17, at the Koushk International Conference Center. The session, attended by Mohsen Paknejad, Iran’s Minister of Petroleum, Sergey Tsivilyov, Russia’s Minister of Energy, and other high-ranking officials from the two sides, examined a wide range of issues. These included completing the International North-South Transport Corridor (INSTC), transferring gas from Russia to Iran, and developing cooperation in areas such as space industries, nuclear energy, trade and economy, finance and banking, customs, industry and mining, agriculture, health, culture and tourism, and science and technology. According to President Masoud Pezeshkian, important and strategic decisions were made during the meetings held throughout this session, decisions that secure the common interests of both countries and nations and have opened new horizons in Tehran-Moscow relations.

Decades-Old Cooperation

The names of Iran and Russia have consistently topped the list of countries with the largest gas reserves. According to statistics, Iran and Russia together possess over 37% of the world’s gas resources. Russia, with 35 tcm of gas, holds more than 19% of the world’s gas reserves. Following Russia, Iran ranks second with 33 tcm of known gas reserves, accounting for a 17.1% share. This very commonality has created extensive opportunities for both countries to participate in global energy and gas markets.

Throughout different eras, Iran-Russia relations have experienced many ups and downs, sometimes turning into cooperation and at other times into competition. However, what is evident today is that Tehran and Moscow have decided, with the support of high-ranking officials, to play a role together in various economic and political arenas. This was a point emphasized by President Pezeshkian in a February 17 meeting with Minister Tsivilyov and his accompanying delegation.

 Noting Iran’s determination to realize Iran-Russia economic cooperation with

strength, speed, and precision, he said: “In all areas of agreement, including transportation, energy, oil and gas, agriculture and food products, as well as defense and security cooperation, the implementation process is being pursued with favorable momentum.”

The history of RIBC, as the most important official mechanism for developing bilateral cooperation, dates back about two decades. It was in December 1996 that the first session of this commission commenced in Moscow, marking the first commission after the dissolution of the Soviet Union and the establishment of the independent Russian state. Since that time, although the holding of this commission faced delays in certain periods, it was never halted, ultimately reaching its nineteenth session today.

Maximum Use of Iran-Russia Potential

President Pezeshkian told the Russian delegation that completing joint projects particularly in transit corridors would clear the way for a surge in ties between the two nations.

“We hope that the development of extensive cooperation between Iran and Russia will leave positive and lasting effects on the region’s economy,” he said.

Ahead of this session’s meetings, Paknejad and Tsivilyov held a meeting, during which both sides emphasized the development of cooperation in various economic fields, including oil and energy, transportation, trade development, and finalizing the cooperation documents signed during the joint economic commissions of Iran and Russia.

According to Paknejad, the 19^th session of RIBC is an important opportunity to maximize the utilization of the two countries’ capacities, especially in the sensitive international context. In the critical situation we are facing, such interactions can be highly effective and impactful, and they carry significance and meaning on the international stage, as well.

On the final day of the gathering, Paknejad wrote on his X social media account: “I had constructive and ground-breaking discussions with my counterpart Sergey Tsivilyov, the Minister of Energy of Russia, within the framework of the joint economic commission of the two countries in Tehran. Iran-Russia relations, based on the 2025 Strategic Document and with the serious determination of officials from both countries, have moved from understanding to implementation in all areas, especially oil and gas.”

MoU Signed

On the same day, following specialized working group meetings and a final session with high-ranking officials from both countries, the Memorandum of Understanding of the 19^th RIBC was signed by Paknejad and Tsivilyov. The document, emphasizing the development of economic, commercial, and technical cooperation between Tehran and Moscow, outlines the implementation framework for agreements between the two countries in the areas of energy, oil and gas, petroleum products, transportation, banking, and investment.

Additionally, Iran and Russia signed four cooperation memorandums of understanding.

Recapping the three-day meetings, Paknejad said: “In this session, important discussions were held in the energy sector, particularly concerning the development of oil and gas fields and gas trade, with the main focus being on gas imports from Russia, and this issue is seriously on the agenda. Specialized working groups also conducted detailed and intensive negotiations in various fields.”

Another topic Paknejad mentioned after outlining the main axes of the negotiations was the Rasht-Astara railway project. He added that this project in the transportation sector is one of the important joint ventures reviewed during the 19^th RIBC meeting, and existing obstacles were largely resolved. The Russian side also committed to commencing the executive operations for the project at the beginning of April 2026.

Over recent months, much news has emerged regarding the development of the Bushehr power plant phases. The issue was also addressed during the joint meeting between Iran’s Minister of Oil and Russia’s Minister of Energy. Regarding the details of the discussions, Paknejad said: “Concerning the peaceful use of nuclear energy, especially the development of the second and third phases of the Bushehr nuclear power plant, it was agreed that the implementation process of the projects would be pursued

with greater speed.”

According to Paknejad, one of the achievements of the commission was removing obstacles related to past memorandums of understanding. He explained in this regard: “Through the expert negotiations that were conducted, these matters were resolved, and we have now entered the implementation phase. The secretariat of the joint commission in both countries will be responsible for following up on the implementation of the agreed-upon clauses. With the activation of executive mechanisms and the removal of existing obstacles, it is expected that economic and energy cooperation between Iran and Russia will develop more rapidly, and the two countries will be able to utilize the extensive existing capacities to promote their collaboration.”

Tsivilyov also considers 2025 to be a fruitful year in Tehran-Moscow relations. From his perspective, the achievement of this session is the strengthening of friendly ties and the development of mutual cooperation. During this meeting, Tsivilyov stated that Russian President Vladimir Putin considers relations with the Islamic Republic of Iran to be very important for his country and said “Russia will continue its extensive cooperation and connections with Iran, and we declare frankly that others cannot create a disruption in the strategic relations between Iran and Russia.”

Follow-Up on MoUs

The previous round of these meetings was held in Moscow in May 2025. This session, as a new phase in Iran-Russia cooperation, facilitated the expansion of relations in the fields of energy, trade, and banking. During the meeting, Iran and Russia, while resolving existing challenges, proceeded to formulate a roadmap for future cooperation between the two countries in the form of the MoU of the 18^th session. This document was signed by Paknejad and Tsivilyov as RIBC chairs.

Referring to the holding of the 18^th session, Mostafa Barzegar, the Director General of the Office for Europe, America, and the Commonwealth of Independent States at the Ministry of Petroleum, elaborated on this period of the commission. He continued as saying “In this session, in addition to following up on the approvals and understandings of the 18th commission, the implementation process of projects by Russian companies in Iran was also monitored and tracked. Within this framework, bottlenecks and executive obstacles were identified, and decisions were made on solutions to remove them. Furthermore, discussions and exchanges of views took place on new topics in the oil and gas sector, including the development of certain fields and investments by Russian companies, the results of which were incorporated into the final document of the commission.”

Emphasizing that 193 clauses approved by both sides in the 18th commission, he added: “Of these 193 clauses, more than 75% of the activities have reached the implementation stage or are currently being implemented, and a number of the remaining cases require the approval of legislation for implementation.”

Twelve Percent Share

Among the achievements of the 19^th RIBC meeting in the energy sector, one may point to the investment by major Russian companies in seven Iranian oil fields. Accordingly, with increased investment, the share of Russian companies in Iran’s oil production is expected to rise from 6% to 12%.

Barzegar identified nuclear energy as the next area of cooperation and stated: “In phase one of the Bushehr nuclear power plant, construction and investment was carried out by Russia, and we are now in the process of implementing phases two and three. Based on the new memorandum of understanding, $25 billion will be invested to construct new small-scale nuclear power plants in Sirak.”

According to Barzegar, the next important topic is the import of gas from Russia. In the first phase, the volume of gas imports will be 55 billion cubic meters per year, and in the second phase, an additional 55 bcm a year will be added.

Touching on imports, Saeed Tavakoli, the CEO of National Iranian Gas Co. (NIOC), announced the finalization of the technical, contractual, and legal clauses for gas imports from Russia. He said: “This import will be carried out via a third country.”

The growing trend of economic relations between Iran and Russia was a topic also mentioned by Khalimat Budunova, the Russian secretary of RIBC, who was present at the 19th commission. She announced the possibility of exchanging over 2,000 types of goods and services between the two countries. According to her, the latest statistics indicate that the volume of trade exchanges between Iran and Russia has reached $4.7 billion. Overall, cooperation within BRICS, the membership of both countries in the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+), collaboration in the gas sector, and so on, collectively indicate the high capacity of the two nations to develop their cooperation.

Arrangements for 20^th Meeting

Ali Mohammad Mousavi, Iran’s Deputy Minister of Petroleum for International Affairs and Trading, announced at the conclusion of the 19^th gathering that the associated document had been finalized and signed by the oil and energy ministers of the two countries. He added: “Cooperation between Iran and Russia is not limited to the two or three days the commission meets; representatives of the two countries keep in touch in person and virtually throughout the year, following up on various issues.”

Stating that the joint commission serves as a platform for recording and evaluating the progress of bilateral cooperation, Mousavi said: “Throughout the year, the parties advance their negotiations through regular meetings, and at the joint commission, the progress is reviewed and finalized at the ministerial level.” He added that with the conclusion of this session, the chairmanship of the joint commission was handed over to the Russian side, and the process of holding the 20^th session of joint cooperation has begun as of today. Referring to oil cooperation between the two countries, he stated: “Iran is fully prepared to attract foreign investment, not only from Russia but also from other countries.”

$40bn MoU Valid

Previously, in July 2022, NIOC had announced the signing of a $40 billion MoU between Iran and Russia’s Gazprom. According to that agreement, $25 billion would be allocated for the development of gas fields and the completion of LNG projects, and $15 billion would be spent on developing six oil fields, including the development of Karanj, Azar, Changuleh, Ab Teymour, and Mansouri.

Mousavi said the $40 billion MoU signed between Iran and Russia, remains valid and that negotiations to transform these memorandums into constructions contracts are ongoing. “These memorandums are progressing in stages, and some of them have entered the contract signing phase. It is expected that next year will be the time for these cooperations to come to fruition,” he added.

The RIBC, as the most important official mechanism for developing bilateral cooperation, has played a key role in the economic, energy, and trade relations between the two countries over the past two decades. Today, in light of geopolitical developments and the intensification of Western sanctions, the cooperation has become more essential than ever and has turned into a strategic platform for expanding long-term collaboration between Tehran and Moscow.

RIBC Achievements; From Understanding to Implementation

The 19^th Russian-Iranian Business Council (RIBC) gathering was held in Tehran at a time when the two countries had passed one year since signing the Comprehensive Strategic Partnership Agreement (January 2025) and the Iran-Eurasian Economic Union Free Trade Agreement (Iran-EAEU FTA) (May 2025) had come into effect. The significance of this commission lay not merely in the number of documents signed, but in the emphasis by officials of both countries on “transitioning from the stage of understanding to the phase of implementation.” Mohsen Paknejad, Iran’s Minister of Petroleum, in the final press conference of the event (February 17, 2026), while stressing the “considerable achievement” under the current international circumstances, announced the finalization of negotiations on gas imports from Russia and the review of entrusting the development of one of the major joint fields to Russian companies.

RIBC Significance

Over the past decade, Iran-Russia economic relations have experienced numerous ups and downs. However, the geopolitical developments between 2022 and 2026—particularly the war in Ukraine, the intensification of Western sanctions against Moscow, and Iran’s accession to regional blocs such as BRICS and the Shanghai Cooperation Organization (SCO)—have provided a platform for deepening bilateral cooperation. The signing of the Comprehensive Strategic Partnership Agreement in January 2025 and its entry into effect in October of the same year marked a turning point in this trajectory. Against this backdrop, the holding of the 19^th RIBC meeting (16-18 February 2026) presented an opportunity to translate political will into operational agreements and tangible economic projects.

The significance of this commission is notable for several reasons: 

First, it marks the first joint economic meeting since the signing of the Strategic Partnership Agreement and the Iran-EAEU FTA (implemented as of May 2025). 

Second, coinciding with changes in the economic team of the 14^th Administration and the appointment of the Minister of Petroleum as the head of the commission from Iran’s side, a new direction has been outlined in the priorities of cooperation. 

Third, unlike some previous meetings that often resulted in general statements and non-binding memorandums of understanding, the documents signed during this session include specific executive commitments in key areas.

Shifting From Theory to Practice

The 19^th RIBC meeting concluded in February 2025 with the signing of cooperation documents and statements by officials from both countries about “transitioning from understanding to the implementation phase,” while the historical experience of Iran-Russia cooperation has always been faced with a gap between agreements and execution. Considering the unfinished projects with repeated delays and the memorandums of understanding and contracts that have stalled in the past periods; the question has always been why bilateral agreements struggle to reach the implementation stage. However, based on official statements and remarks by officials at the 19^th RIBC meeting, the concept of “transitioning from understanding to implementation” has found meaning in at least four components, indicating the firm determination of both parties to advance joint relations:

First, the finalization of previous agreements: This component refers to transforming the memorandums of understanding and letters of intent from past years into binding contracts with specific timelines and executive commitments. A concrete example is the finalization of negotiations for the development of seven oil and gas fields under four contracts with Russian companies, some of which have reached the production stage. 

Second, overcoming technical and legal obstacles: Paknejad explicitly spoke of “removing obstacles in certain areas of interest,” indicating efforts to resolve previous legal, financial, and technical issues. An example is getting close to the finalization of the gas import contract, with only “one or two clauses” remaining for a final agreement. 

Third, allocation of budget and resources: The announced Russian investments (approximately $4 billion for oil and gas fields) and the financing of infrastructure projects such as the Rasht-Astara railway, signify the dedication of financial resources to the agreements. 

Fourth, specific timelines: Promises such as “we will soon witness the signing of the final contract” for gas imports and “reviewing the assignment of the development of one of the major joint fields” indicate the definition of a timeframe for implementation.

Main Points

Based on what was emphasized by both parties during the RIBC meeting, there are at least four areas of cooperation that serve as the core of the agreements in the bilateral relations:

a) Oil and Gas Field Development Contracts:  According to the Ministry of Petroleum’s report, four contracts for the development of seven oil and gas fields have been finalized with Russian companies. Some of these fields have reached the production stage, and new investments have been approved. This follows a trend that, based on statements by the Iranian ambassador to Moscow (2025), had aimed for a total of $8 billion in Russian investments in Iran’s gas projects, of which nearly $5 billion had been finalized by 2025. Furthermore, the commission emphasized the advancement of nuclear energy projects (completion of units 2 and 3 of the Bushehr power plant by Rosatom) and cooperation in the space sector.

b) Russian Gas Transit: Negotiations regarding the transit of Russian gas through Iran’s territory have reached their final stages. This project has a potential capacity of up to 55 billion cubic meters of gas transit per year and could transform Iran into a regional gas hub. A key point in the Petroleum Minister’s statement was the simultaneous emphasis on increasing extraction from the South Pars gas field (a record 730 mcm/d) and the need for gas imports, indicating a “complementary” rather than “substitutive” approach in this cooperation. The Russian gas transit project, while ensuring the security of gas supply for the northern provinces, also enables Iran to swap and export gas to regional markets (Oman, Pakistan, Iraq).

c) North-South Corridor: In the final document of the commission, the physical progress of the Rasht-Astara railway project has been reported as one instance of the implementation of agreements. The Rasht-Astara railway project, considered the missing link of this corridor, has advanced over recent years with Russia’s participation. According to previous reports, approximately 50,000 ha of land has been allocated for the construction of this railway, with Russia handling the studies and financing of the project. Completing this corridor could drastically reduce the time and cost of transporting goods from Russia to the Persian Gulf and then to India, creating a sustainable source of transit income for Iran.

d) Increase in Bilateral Trade: According to statistics presented at the commission, the volume of bilateral trade in the first 11 months of 2025 reached $4.8 billion, up 13.1% year-on-year. This growth has occurred while the Iran-EAEU FTA came into effect on May 15, 2025. In addition, according to a report by the Iran-Russia Joint Chamber of Commerce, the composition of Iran’s exports to Russia has improved, with the share of industrial goods increasing from 10% to 37%. During the meetings of commission, the parties emphasized further leaps in trade by relying on the FTA and removing existing obstacles. The four memorandums of understanding signed in the fields of trade and energy were also designed to facilitate commercial exchanges and develop operational cooperation.

Conclusion

The 19^th RIBC meeting was held under the motto “Transition from Understanding to Implementation,” and the finalization of four contracts for the development of seven oil and gas fields with an investment of approximately $4 billion, nearing the signing of the gas import contract, and the progress of infrastructure projects such as the North-South Corridor are concrete examples of this transition.

The presence of the oil ministers of Iran and Russia as the heads of the joint economic commission of the two countries indicates the prioritization of economic issues, particularly in the energy sector, in bilateral relations. Furthermore, the announcement of “tangible” results and the emphasis on “transforming agreements into operational projects” in the final statement suggest an effort to avoid the criticisms directed at previous commissions (due to their largely ceremonial outcomes).

The 13.1% growth in bilateral trade and the improvement in the composition of Iran’s exports in favor of industrial goods are among the initial results of this transition. The shift from general statements to executive commitments with operational guarantees, and the emphasis on “clearing barriers” in areas of mutual interest, demonstrate the gradual evolution of bilateral relations.

Pre-war and Post-war

Russia Natural Gas Export Strategy

Afshin Javan
Energy Economist & Senior Strategic Advisor

The present paper aims to analyse the structural transformation of Russia’s natural gas export strategy following the escalation of the Ukraine conflict, and evaluates the resulting macroeconomic implications for both Russia and the European Union (EU). Prior to 2022, Russian gas exports was predominantly directed toward Europe, supported by extensive pipeline infrastructure and long-term contractual arrangements that generated stable export rents and fiscal revenues. The post-2022 period marked a permanent rupture in this model, characterized by a collapse in Russian gas deliveries to the EU and a partial reorientation toward Asian markets.

The paper argues that the loss of the European gas market represents a structural, rather than cyclical, shock to Russia’s external sector and fiscal base. For the EU, the sharp reduction in Russian gas supplies constituted a major negative energy supply shock, contributing to weaker GDP growth, a surge in headline inflation, and persistent increases in core inflation through second-round effects. The analysis further develops forward-looking scenarios for 2026–2030, quantifying plausible GDP and inflation outcomes under alternative geopolitical and energy-policy paths, and situates these scenarios within the framework of the EU’s Green Deal, Fit-for-55, and REPowerEU strategies.

Introduction

Natural gas has long played a central role in the economic and geopolitical relationship between Russia and the European Union. For decades, Russian pipeline gas supplied a significant share of European demand, while export revenues constituted a key pillar of Russia’s external earnings and fiscal framework. The escalation of the Ukraine conflict in 2022 fundamentally altered this relationship.

This paper addresses three core questions. First, how did Russia’s pre-2022 gas export model function economically, and why was it particularly efficient in the European context? Second, what structural changes occurred in Russia’s gas export strategy after 2022, and how have these changes affected fiscal and macroeconomic outcomes? Third, how did the reduction in Russian gas supplies propagate through the EU economy, and what are the likely macroeconomic implications under alternative future scenarios?

Russia Natural Gas Export Model Before 2022

Europe-Cantered Export Architecture: Before 2022, Europe constituted the primary destination for Russian natural gas exports. Pipeline deliveries peaked at approximately 175–180 billion cubic meters annually in the late 2010s, and in 2021 the EU imported more than 150 billion cubic meters of Russian gas. This system benefited from geographical proximity, large-scale pipeline capacity, and deep, liquid gas hubs.

From an economic perspective, the European market offered Russia high netback values. Transportation costs were relatively low, pricing mechanisms often incorporated oil indexation or hybrid formulas, and contractual stability reduced revenue volatility. The scale and flexibility of the European market also allowed Russia to optimize flows across multiple routes.

Macroeconomic and Fiscal Role: Gas export revenues contributed materially to Russia’s fiscal and external accounts. They supported federal budget revenues through extraction taxes, export duties, and dividends from state-owned enterprises, while also generating foreign exchange inflows that helped stabilize the rouble. Beyond their direct economic contribution, gas exports enhanced Russia’s strategic leverage in its broader relationship with Europe.

Structural Break After 2022

Collapse of Gas Flows to Europe: Following the outbreak of the Ukraine - Russian tension, gas exports to the EU declined sharply. Deliveries fell to roughly 64 billion cubic meters in 2022, dropped further in 2023, and recovered only marginally in 2024. This decline reflected a combination of physical disruptions, EU sanctions and diversification policies, the termination of long-term contracts, and the gradual expiration of Ukrainian transit arrangements.

Importantly, this contraction represents a permanent structural break rather than a cyclical adjustment. The loss of the European market implied large-scale underutilization of existing infrastructure and a fundamental reduction in Russia’s export optionality.

Post-2022 Strategic Reorientation

Pivot Toward Asia: In response to declining European demand, Russia accelerated gas exports to Asia, particularly China via the Power of Siberia pipeline. Deliveries approached contractual capacity by 2025, partially offsetting lost volumes. However, the economic characteristics of this trade differ markedly from those of the European market. Prices are typically lower and politically negotiated, infrastructure is limited to a single corridor, and the absence of liquid trading hubs constrains arbitrage and flexibility.

As a result, the pivot to Asia has restored volumes, but not export rents or pricing power.

Constraints on LNG Expansion: Russia also sought to expand liquefied natural gas exports to access global markets. Sanctions, however, limited access to liquefaction technology, specialized equipment, financing, and insurance. These constraints delayed LNG projects and reduced Russia’s ability to substitute pipeline losses with flexible global exports comparable to oil trade.

Fiscal and Macroeconomic Implications for Russia

Revenue Composition and Volatility: Despite the decline in gas exports, Russia maintained aggregate fiscal revenues through oil exports, exchange-rate depreciation, and domestic financing. Oil and gas revenues recovered in nominal terms in 2024. Nevertheless, the composition of revenues shifted: gas-related income became structurally weaker and more volatile, while dependence on oil prices and fiscal buffers increased.

Strategic Implications: From a strategic perspective, natural gas transitioned from a high-margin, geopolitically flexible asset to a constrained, infrastructure-bound revenue source. This shift reduced Russia’s bargaining power, increased exposure to single-buyer risks, and weakened long-term investment incentives in the gas sector.

Macroeconomic Impact on EU

Energy Supply Shock: The reduction in Russian gas supplies constituted a severe negative energy supply shock for the EU. Wholesale gas prices surged to unprecedented levels in 2022, significantly raising production costs and household energy expenditures. This shock served as the primary transmission mechanism from geopolitics to macroeconomic outcomes.

GDP Effects: Higher energy prices reduced EU GDP through several channels: erosion of real household incomes, contraction in energy-intensive industrial sectors, deterioration in international competitiveness, and tighter monetary policy in response to inflation. The EU GDP growth slowed sharply between 2022 and 2023, with energy-intensive and gas-dependent economies experiencing the largest effects.

Inflation and Core Inflation Persistence: Headline inflation rose rapidly, driven largely by energy prices. More importantly from a policy perspective, core inflation continued to increase even after energy prices began to stabilize. This persistence reflected input–output pass-through, wage adjustments, and shifts in inflation expectations, underscoring that the shock was not transitory.

These dynamics justified a prolonged period of restrictive monetary policy by the European Central Bank and complicated the disinflation process.

Forward-Looking Scenarios (2026-2030)

Three scenarios are considered:

1. Optimistic (Partial Re-engagement): Limited residual Russian gas flows to the EU reduce energy price volatility. The EU GDP growth is modestly higher than baseline, while headline and core inflation decline more rapidly.
2. Most Likely (Structural Decoupling): Russian gas imports approach zero by around 2027, consistent with stated EU policy objectives under REPowerEU and the Fit-for-55 framework. Energy prices remain structurally higher than pre-2022 levels, resulting in mildly weaker GDP growth and moderately persistent core inflation.
3. Pessimistic (Hard Stop with Market Stress): Complete termination of Russian gas imports coincides with global LNG tightness. Energy prices rise sharply, GDP growth weakens significantly, and inflation—particularly core inflation—reaccelerates.

Assigning probability weights of 20 percent, 55 percent, and 25 percent respectively yields a probability-weighted outcome characterized by slightly weaker GDP growth and moderately higher, more persistent core inflation relative to a no-shock baseline.

Alignment with EU Climate and Energy Policy

The most likely scenario aligns closely with the EU’s Green Deal, Fit-for-55, and REPowerEU strategies, which prioritize decarbonization, diversification, and reduced reliance on Russian fossil fuels. While these policies enhance energy security and support long-term climate objectives, they also imply higher transition costs, particularly during periods of market stress.

Conclusion

The post-2022 transformation of Russia–EU gas relations represents a structural realignment with lasting macroeconomic consequences. Russia faces a permanent reduction in gas export rents and strategic flexibility, while the EU trades lower geopolitical exposure for higher energy-system costs and more complex inflation dynamics. The analysis suggests that the most likely equilibrium is one of structural decoupling, modestly weaker growth, and more persistent core inflation, underscoring the long-term economic trade-offs embedded in energy security and climate policy choices.

New Project Online in Bushehr

National Petchem Output Capacity at 100mt

President Masoud Pezeshkian inaugurated the olefin and monoethylene glycol (MEG) units and the off-site utilities of the Bushehr Petrochemical Plant, with a total investment of $1 billion, while the Minister of Petroleum Mohsen Paknejad attended it. During the ceremony, Paknejad presented statistics on the increase in production capacity of petrochemical products in the fourteenth administration, stating, “The production capacity has reached 100 million tonnes (mt), up approximately 3.7 mt”. Hassan Abbaszadeh, the CEO of National Petrochemical Co. (NPC), referred to this achievement as “the celebration of the petrochemical industry reaching 100 mt”.

14^th Administration

One of the key actions of the Ministry of Petroleum pertains to 7^th Five-Year Development Plan Act. According to the articles 45 and 48 of this Act, the development of the value chain across the oil, gas, and petrochemical industries has been considered as a central strategy, with the main objectives of reducing the sale of crude oil, increasing value-added and strengthening non-oil exports. In the first year of the Plan, the petrochemical industry took a significant step in achieving the goals set by the Ministry of Petroleum and was able to fulfill 100% of the targets set. As a pioneering industry in the fields of exports, foreign currency supply, value chains, job creation, and investment attractiveness, this industry holds a distinguished position in Iran’s economy.

The petrochemical industry has targeted a nominal capacity of 131.5 mt in the goal-setting of the 7^th Plan. Once achieved, this could enhance the industry’s resilience against fluctuations in international markets and further strengthen Iran’s position in non-oil exports.

According to Minister Paknejad, in a bid to support the completion of petrochemical value chains and related downstream industries, measures have been taken to steer investments from the production of basic products toward intermediate and final products in the value chain.

Under the 14^th Administration, with the participation of the private sector, the annual production capacity of petrochemical products has increased by approximately 3.7 mt, reaching 100 mt. This achievement signifies the sustainable and plan-oriented growth of the petrochemical industry. According to Abbaszadeh, the next step will focus on completing ongoing projects to further elevate this production capacity to 105 mt.

In total, under the 14^th Administration, 6 major national projects have been commissioned so far, with an additional 8 projects ready for operation. These projects, which are set for inauguration, encompass both production and the development of infrastructure within the petrochemical industry. Their outcomes will strengthen production capabilities, expand the value chain, and deliver significant achievements for both the petrochemical industry and the nation.

The cumulative production of petrochemical products from the beginning of the 14^th Administration until now has reached 95 mt. During this period, 37.7 mt has been exported, generating $15.6 billion in foreign-currency earnings for the country. Additionally, the cumulative production and volume of petrochemical product exports in the first nine months of the current calendar year have increased by 1.8% and 2.8%, respectively, compared to the same period last year.

All of these indicators clearly demonstrate the prominent position of the petrochemical industry in the fourteenth administration and the progress made toward achieving the goals of the 7^th Plan.

Bushehr Petchem Project

One of the major projects recently commissioned in Iran’s petrochemical industry is the second phase of the Bushehr Petrochemical Plant. Located in the Pars Special Energy Economic Zone (SPEEZ), this plant produces products such as olefins, polyethylene, methanol, sulfur, ethylene glycols, acetic acid, vinyl acetate, and utilities.

According to statements by Afshar Bazyar, the CEO of Shasta Commercial Investment Co. (SCIC), the commissioning of the second phase of the Bushehr Petrochemical Plant has added 1.6 mt to the facility’s nominal capacity. Furthermore, the production from this phase is expected to generate $600 million in foreign-currency earnings.

The Bushehr Petrochemical Plant features an integrated value chain, processing sour gas into intermediate products and ultimately producing downstream goods.

The plant’s olefin unit, with an annual capacity of 1.09 mt and an investment of $604 million, was constructed to produce ethylene and polyethylene. It has created direct employment for 688 persons. Additionally, the MEG unit, with a capacity of 554,000 tonnes and an investment of $456 million, produces materials to be used in polyesters and antifreeze. This unit provides direct employment for 317 individuals.

The Bushehr facility has been designed and implemented in three phases across three separate sites: a 10-ha sweetening site adjacent to Phases 6, 7, and 8 of the South Pars gas field, allocated to sour gas sweetening; a 20-ha northern site for ethane extraction and methanol units, constituting the first phase; and a 40-ha southern site for olefin and MEG units, designed and built as the second phase.

Collectively, these three phases form a complete value chain covering feedstock supply, utilities, and the production of high-value-added petrochemical products. The first phase of this massive complex includes the sweetening, ethane extraction, methanol, ASU (Air Separation Unit), and RO (Reverse Osmosis) units. The second phase comprises the off-site utilities, olefin and MEG units, representing a major component of the development.

The olefin unit, serving as the heart of the second phase, receives its feedstock from the complex’s own ethane extraction unit. The ethylene produced is used as feedstock within the complex’s MEG and HDPE units, with an excess of 300,000 tonnes sold to other facilities. The MEG unit, in turn, receives its required ethylene feedstock from the Olefins unit, and its final product is destined for export. The facility’s off-site utilities units are responsible for supplying ancillary services and establishing the necessary interconnecting pipelines for the phase.

Iran’s petrochemical industry has taken significant strides toward achieving the goals stipulated in the 7^th Plan. Beyond meeting domestic needs, this industry plays a crucial role in diversifying the country’s export portfolio and generating foreign currency revenue. The commissioning of the second phase of the Bushehr Petrochemical Plant not only contributed to Iran reaching the 100 mt nominal capacity milestone for the industry, but also represents a major step toward balanced development, industrial self-sufficiency, and solidifying Iran’s position within the global petrochemical value chain. This achievement has become a symbol of hope, perseverance, and Iranian engineering prowess.

Private Sector Invests $4.5bn in Flare Gas Capture

Capturing flare gases, which for years was regarded as one of the chronic bottlenecks in Iran’s petroleum industry, has entered a new phase under the 14th administration. The increase in collection capacity, the definition of short-term and long-term projects, extensive delegation to the private sector, and quantitative targeting in the 7^th Development Plan indicate that oil policymakers are seeking a real reduction in gas flaring and its conversion into sustainable feedstock for downstream industries. The chief supervisor at National Iranian Oil Co. (NIOC), Reza Kheilaie, has said the flare gas capture project is economically viable. In an interview with “Iran Petroleum”, he explains about the latest status of flare gas capturing, associated technical and financial challenges, types of contracts and the outlook set by the 14^th Administration.

How much has flare gas production been reduced under the 14^th Administration?

The production of flare gas is directly tied to the volume of crude oil extracted; as oil recovery increases, the volume of associated petroleum gas (APG) also rises. Managing APG requires the development of processing and transmission infrastructure to prevent them from being flared. Under current conditions, approximately 80 mcm/d of APG is produced in the country, of which between 40 and 50 mcm/d is flared, depending on operational conditions. The figure has fluctuated over the years in line with changes in crude oil production levels. Before the 14^th Administration took office, the capacity for collecting flare gases was approximately 5 mcm/d, established mainly in the areas of National Iranian South Oil Co. (NISOC), Iranian Central Oil Fields Co. (ICOFC), West Karun, and the Arvandan Oil and Gas Production Co. (AOGPC). As the 14^th Administration started work, owing to implementation of new projects and development of existing infrastructure, this capacity has now increased to over 9 mcm/d. Although the figure still has a considerable gap compared to the total volume of gas flared, it represents a significant shift in terms of trend setting.

Could you tell us about newly designed projects and those under way for flare gas capturing?

The capturing and utilization of flare gases require the construction of complete processing facilities, including reception, sweetening, and compression units. For this reason, refinery projects in this sector typically have a timeline of five to seven years. Given this reality, to achieve quicker results, a series of short-term programs with an implementation period of 18 to 30 months were designed, and simultaneously, five major long-term projects were also put on the agenda. Key projects in this regard include two contracts for capturing flare gases in East Karun, the construction of the NGL 3200 plant in West Karun, the NGL 3100 plant in Dehloran, and the Kharg NGL plant for capturing APG from Kharg and Bahregan. These projects play a key infrastructural role in preventing gas flaring and enhancing the country’s energy productivity. As part of the short-term projects, a portion of the flare gases has been auctioned off to the private sector, and some projects have been commissioned between the second half of calendar year 1403 and early 1404 calendar year. Examples include Marun 5, the Dehloran gas compression station, and various private sector collection projects in different locations. Additionally, gas injection at the Haftkel field has been a significant remedial measure, bringing the flare gases from that region into the consumption cycle after many years. Overall, the capacity defined in the current projects is equivalent to two phases of the South Pars gas field; accordingly, capacity has been created for approximately 2 bcf/d through long-term projects and nearly 1 bcf/d through short-term programs.

What are the main technical challenges in the way of these projects in various operational zones?

The most significant technical challenge is the geographical dispersion of oil fields, which are spread across seven different provinces. This dispersion makes the design and implementation of long transmission networks inevitable, directly increasing initial capital expenditures. Another major challenge is the sour nature of a significant portion of the associated petroleum gas. This characteristic necessitates the use of specialized sweetening equipment, and increases the engineering and logistical complexities of the project. Furthermore, the long lead time for manufacturing equipment within the supply chain is a key factor causing delays in the full implementation of the plans. From a legal perspective, according to governing laws, flare gas capturing should be assigned to the private sector. At the beginning of this program’s implementation, only two or three companies were capable of entering this field. Although the number of active participants has increased as the investment path has been clarified, given the high volume of flare gas and the extensive need for capital, this number is still insufficient. It is estimated that approximately $6 billion in investment is needed to fully implement these plans. To date, about $4.5 billion of this amount has been attracted and operationalized. The remainder, due to the limited financial capacity of companies and the high cost of equipment, requires financial support and targeted financing facilities.

What economic incentives are envisaged for the private sector?

The economic viability is the main pillar of the design for these projects. Capturing flare gas becomes attractive to an investor when the return on investment is made possible by converting APG into value-added products. Accordingly, different base prices have been set for sweet and sour gas, and in some areas where centralized capturing by NIOC has not been feasible, a base price of zero has been considered for the buyer. Tenders for these areas have been announced, and interested companies can enter. The important point is that, to date, no costs have been paid from the internal resources of NIOC for these projects; the entire $4.5 billion investment made has been financed by the private sector. To accelerate implementation, special task forces have been formed to secure foreign currency, place orders, and clear operational bottlenecks, which have accelerated the progress of the projects through continuous monitoring.

How have flare gas capturing plans been adopted and implemented?

Development of comprehensive plans began in 2017, and the projects were categorized based on technical priorities and the needs of different regions. With the increase in crude oil production and the subsequent growth in the volume of APG, it became essential to revise these plans, and new locations with gas capture potential were added to the tenders. Entrusting large-scale projects to the private sector has been one of the main pillars of the strategy. Within this framework, two major units, NGL 3100 and NGL 3200, with an investment of approximately $1.5 billion, were assigned to the private sector and have become operational. In recent revisions, new gas flaring sites have been identified and introduced for assignment. Participation from foreign companies, as well as domestic downstream companies like petrochemical firms, has been welcomed; because these partnerships, in addition to reducing gas flaring, may also secure a stable feedstock for industrial units. In total, out of the 90 identified flare gas stations, more than 30 sites have so far been assigned to the private sector. However, it is noteworthy that achieving the final objectives requires a more active entry of new investors.

Why have some projects been delayed?

Although the key approvals and main permits have been obtained, the delays are primarily due to legal and administrative processes such as holding auctions, providing bank guarantees, and obtaining environmental permits. The high volume of investment required is another significant factor; capturing every 1 bcf of gas necessitates an investment of about $1 million. This issue requires the provision of guarantees and complicated financing, which is time-intensive.

What contracting models have been envisaged to ensure investors?

In long-term projects, the return on investment is guaranteed through contracts for the sale of the products and the resulting feedstock. In short-term projects, the commitment to purchase a specified volume of the captured gas serves as the guarantee. In terms of revenue structure, the “direct sale of flare gas” model has been the most attractive option, and the majority of contracts have been concluded on this basis, so far.

How much is the economic value of flared gas?

If a base price of 35 cents per cubic meter of gas is considered, flaring 50 mcm/d of gas generates a loss equivalent to approximately $17.5 million per day. This amount reaches about $6.3 billion annually. If these gases are recovered and processed, the final economic value will be significantly higher.

How has the 14^th Administration changed its approach in this regard?

The main difference lies in the level of mandated clarity and transparent goal-setting. The 7^th Development Plan mandates the collection of 16 bcm of flare gas annually by March 2029 and has clearly delineated the responsibilities. The 14^th Administration is diligently pursuing the implementation of this structured mandate.

How much is the flare gas reduction envisaged by the end of the 14^th Administration’s term in office?

Based on the current progress of the projects and considering investment constraints, the target is to achieve a flare gas-capturing rate of approximately 35 mcm/d by the end of the 14^th Administration’s term; a goal that could create a reliable reduction in the country’s gas flaring.

What capacities can realization of long-term objectives create for downstream industries?

In the long-term horizon, approximately 1.9 bcf/d of sustainable feedstock will be provided through flare gas collection. This capacity may serve as a foundation for the development of petrochemical industries, increasing added value, and strengthening the country's export potential—a path that transforms flare gas from an environmental challenge into an economic opportunity.

In light of President Masoud Pezeshkian’s emphasis on precise oversight of this project, what mechanisms have been worked out for monitoring the projects?

Comprehensive information on the progress of flare gas collection projects has been integrated into the high-level national supervisory systems and made available to the Presidential “National Observatory.” The measure enables continuous monitoring of the physical and operational progress of the projects at the highest management level. To strengthen this oversight, the provision of visual equipment and the direct connection of the projects’ operational systems to this observatory are on the agenda. This will facilitate real-time monitoring, rapid identification of bottlenecks, and prompt resolution of implementation obstacles.

Oil Industry Nationalization

History Doing Justice to Mosaddeq

On the eve of the 75th anniversary of Iran’s oil industry nationalization and the leadership role of Mohammad Mosaddeq in this historic event, many fundamental questions still persist regarding the concept of nationalization, independence, the absence of foreign domination, and the role of oil in the country’s development. Proponents of Mosaddeq view nationalization as extending beyond the oil sector, aligning it with the country’s independence and the rejection of foreign domination. Opponents of Mosaddeq, however, consider the 1951 nationalization a historical mistake in the path of the country’s political and economic development, which inflicted irreparable damage on the Iranian society. The present article, by re-examining the narrative of the nationalization of the oil industry, aims to explain the various perspectives surrounding the leadership role of Mosaddeq in this historical event.

Background

The historical roots of Iran’s oil nationalization date back not to the 1940s but to the first colonial contracts between Iranians and foreign countries during the Qajar era. Later, during the reign of Reza Shah, with the cancellation of the D’Arcy Concession and the conclusion of the 1933 Agreement, grounds for changes in the contract between Iran and the oil company emerged. For instance, according to Article 10 of the 1933 Agreement, the annual royalty was calculated at four shillings per ton of oil, and unlike the D’Arcy Concession, which had set Iran’s share at 16%; it reached twenty percent in this agreement. With the fall of Reza Shah in September 1941 and the formation of an open political atmosphere, opposition to this agreement gradually began.

Specifically, the first critical discussion regarding the 1933 Agreement can be traced back to Mosaddeq’s detailed speech at the seventy-fifth session of the fourteenth term of the National Consultative Assembly in November 1944. He believed that Iran’s revenues from the Anglo-Iranian Oil Company (AIOC) spent on political matters, weapons, and ammunition, which proved useless in September 1941. Mosaddeq also protested the government’s inability to audit the oil company and the position of the concession-granting party in previous contracts. Apart from Mosaddeq’s critique, some oil figures also did not believe in canceling the D’Arcy Concession and considered several proposals preferable to its cancellation, including subjecting the government to income tax, employing Iranian work force, and changing the ambiguous phrases of the D’Arcy Concession.

In the fifteenth term of the National Consultative Assembly, developments related to oil continued. During this period, the government of Saa’ed pursued the supplementary oil agreement known as the “Gass-Golshāyān Agreement,” which included more concessions than the 1933 Agreement, such as Iran receiving six shillings per ton of sold oil instead of four shillings, and an additional payment of 5 million pounds sterling. Despite the Saa’ed government’s support for this plan, the fifteenth term of the parliament opposed it.

16^th National Assembly

In the sixteenth term of the National Consultative Assembly, the process of nationalizing Iran’s oil industry accelerated. During this period, several prime ministers, including Saa’ed, Mansour, and Razmara, came to office, and a special commission called the “Oil Commission” was formed under the leadership of Mohammad Mosaddeq. Similar to his opposition to the 1933 Agreement, Mosaddeq opposed the supplementary oil agreement and emphasized that this agreement would strip the Iranian nation of its rights.

In one of the meetings of the Oil Commission, Prime Minister Razmara defended the supplementary oil agreement and called for negotiations with the AIOC. He also considered the nationalization of the oil industry impractical for the country. In contrast, Mosaddeq and the “National Front” delivered numerous speeches on the necessity of nationalizing the oil industry. With the assassination of Razmara, the process of oil nationalization accelerated, and with Hossein Alaa’ coming to power, the Oil Commission of the sixteenth term of the National Consultative Assembly sent the bill related to nationalization to the parliament for approval. Finally, on March 20, 1951, the bill for the nationalization of the oil industry was approved.

Nationalization; Yeah or Nay?

The nationalization of the Iranian petroleum industry in the late 1940s was a rare event in the world of that era. This event was considered so significant in other countries that many statesmen abroad admired it. Mahatma Gandhi’s son, the leader of India, praised the nationalization of the oil industry and the expulsion of the British from Iran’s oil interests. Jamal Abdel Nasser, the leader of Egypt, declared the nationalization of the Suez Canal, inspired by Mosaddeq’s movement in Iran, and repeatedly expressed his admiration for Mosaddeq.

Nevertheless, there are certain critiques regarding Mosaddeq’s performance and the nationalization of the oil industry within Iranian society. Despite several decades having passed since this event, some analysts view the nationalization of the oil industry and the subsequent developments leading up to the coup d’état of 19August 1953 with skepticism and, at times, subject it to very harsh criticism.

Mosaddeq Tough

One of the criticisms leveled against Mosaddeq’s approach regarding oil stems from the belief that he showed inflexibility in negotiations with Britain, the United States, and the World Bank, thereby harming national interests. In this regard, Nicola Gorjestani, a former senior official at the World Bank and author of the book Mosaddeq: Beyond Time, having examined the World Bank archives and official American and British documents, argues that the Iran-UK negotiations were prolonged because the British did not respect Iran’s right to sovereignty. They never truly accepted the reality of nationalization and sought to retain control over the operations and profits of Iran’s oil. Mosaddeq was willing to negotiate the amount and method of compensation but was not prepared to compromise Iran’s sovereign right over its oil resources.

The Americans also had a different position regarding the oil issue in Iran and pursued several specific objectives, including pushing Britain aside from the exclusive control of Iran’s oil, preventing the restart of Iran’s oil industry in order to keep the door open for American companies in Iran, and entering Iran’s oil industry as a main player in its operations. Initially, the Americans supported the nationalization of the oil industry in Iran, but over time they gravitated towards Britain because they were promised a share in Iran’s oil. Ultimately, the United States preferred to negotiate with the Shah of Iran rather than reaching an agreement with Mosaddeq.

Reparations Offer

One of the serious criticisms leveled against Mosaddeq’s approach is that he opposed the proposals from the US, Britain, and the World Bank, thereby harming Iran’s political and economic interests. However, an examination of these proposals shows that they concealed their true intentions through the use of cleverly crafted phrases: namely, maintaining foreign control or imposing an exorbitant compensation that would have mortgaged Iran’s national interests for decades.

The issue of paying indemnity was among the subjects Mosaddeq raised, suggesting that an amount be determined by the International Court of Justice in The Hague, or that the two parties agree on a specific sum. The United States welcomed this proposal and considered $500 million in compensation to be fair, but Britain never agreed to accept a fixed amount of compensation.

Furthermore, Mosaddeq had proposed that the International Court of Justice base its arbitration on the law concerning the nationalization of the coal industry in Britain itself. However, Britain insisted that The Hague Court should include the value of oil not yet extracted in estimating the amount of compensation.

Prior to the nationalization of Iran’s oil industry, the AIOC had annual profits of around £100 million. With approximately forty years remaining on this concession, the potential liability for compensation was up to £4 billion (equivalent to $12 billion—a staggering amount in the early 1950s and ten times Iran’s Gross Domestic Product at that time). Ultimately, Mosaddeq offered to pay $800 million in compensation (i.e., 60% more than the amount the Americans considered fair), yet Britain still rejected this figure. Therefore, criticizing Mosaddeq’s action for not accepting this proposal cannot be considered fair.

WB Offer Turned Down

Regarding the World Bank’s proposal, criticisms have also been made about Mosaddeq’s performance, suggesting that the WB presented two concrete proposals to him, which he rejected. In this context, the WB insisted on acting as a management agency on behalf of both parties to the dispute. However, Mosaddeq’s government insisted that the bank should conduct oil operations as Iran’s representative, because at that time only the Iranian government had sovereignty over these operations. Secondly, the bank wanted Iran to hire British technicians to run the facilities in a so-called “efficient” manner. These proposals were made even though Mosaddeq had offered employment to the oil company employees before the British left Iran, but they refused to work for National Iranian Oil Co. (NIOC) under their previous conditions.

Concerning the World Bank’s proposals, researchers believe that the WB, as an international institution, did not truly act impartially; rather, it effectively behaved as a spokesperson for the British. Documents show that when the bank was drafting its proposal, two former directors of the previous company were in Washington for several weeks and negotiated almost daily with the bank’s executives and experts. The result of those negotiations was the WB’s proposal to Mosaddeq, which was tailored to the demands of the former company.

Regarding the WB’s second proposal about hiring technicians, documents reveal that Britain imposed the initiative for a British-oriented technical scheme on the World Bank, and the bank rejected several of Mosaddeq’s suggestions to use technicians from other countries. In fact, by insisting that British technicians were necessary for so-called “efficient operations,” the WB was creating a “Trojan horse” under its own logo. For this reason, some researchers have assessed Mosaddeq’s decision to reject the World Bank’s proposals as correct.

Every year, as the 20March approaches, the subject of Mosaddeq and the nationalization of the oil industry becomes a forum for discussion among Iranian intellectuals, journalists, and academics to examine this historical legacy.