Iran, a nation endowed with vast oil and gas reserves, is grappling with a deepening economic crisis exacerbated by the reinstatement of United Nations Security Council sanctions. The reactivation of the ‘snapback’ mechanism under Resolution 2231 has cut off critical foreign exchange inflows, undermining the country’s ability to sustain its energy exports and manage its fiscal obligations. n nWith sanctions back in force, Iran’s crude sales have shifted toward opaque, discounted transactions primarily with China, which has not publicly reported its imports since 2022. India recently purchased a shipment valued at $111 million under unclear conditions, highlighting the growing reliance on discreet trade channels. At the same time, competition from Russia, which offers cheaper oil globally, has weakened Iran’s market position. n nTo maintain export volumes, Iranian authorities are selling crude at discounts between $6 and $15 per barrel, significantly reducing national revenue. Over 90 percent of these exports go to China, creating a lopsided dependency that limits pricing power and long-term strategic flexibility. Additional hidden costs—such as inflated shipping and insurance fees, and the use of a shadow fleet of vessels operating without transponders—further erode profits. n nComparisons with regional counterparts underscore the severity of Iran’s situation. While Iraq produces 950,000 barrels per day from the shared West Karun fields—more than double Iran’s 420,000—this disparity results in an annual revenue gap exceeding $13.5 billion. Iraq collaborates with international energy firms, whereas Iran faces an estimated $250 billion shortfall in foreign investment. Similarly, Qatar capitalizes on the South Pars gas field, extracting billions in value from shared resources that Iran struggles to access due to outdated infrastructure and poor planning. n nDomestically, mismanagement compounds the problem. High household gas consumption during winter disrupts gas injection processes essential for maintaining oil reservoir pressure. Experts estimate this causes $5 billion in annual losses and risks permanently losing 16.3 billion barrels of recoverable oil—worth approximately $815 billion at $50 per barrel. Many of Iran’s oil fields are already experiencing annual production declines of 5 to 15 percent, with projections indicating a drop of 300,000 barrels per year absent new investment. n nUnder full enforcement of sanctions, oil revenues could fall below $18 billion, pushing inflation above 90 percent. Even under more favorable diplomatic conditions, income may stagnate at $25 billion with inflation remaining above 60 percent. This trajectory reflects a broader strategic failure: prioritizing short-term survival over sustainable development, while other oil-producing nations invest in economic diversification beyond hydrocarbons. n— news from National Council of Resistance of Iran – NCRI
— News Original —
Iran’s Oil Wealth Drained as Regime Faces Economic Collapse Under Renewed UN Sanctions
Three-minute read n nIran, one of the world’s richest nations in oil and gas reserves, is trapped in a structural crisis imposed by the ruling regime. The reactivation of multilateral UN Security Council sanctions through the snapback sanctions threatens the regime’s lifeline — the foreign exchange revenue that fuels its systematic plundering of national resources. n nThis plunder extends far beyond selling crude oil at deep discounts. The real profits flow into the pockets of intermediaries within the regime, while the Iranian people are left struggling in an economy fighting for survival. The fate of Iran’s oil exports following the reactivation of sanctions is emblematic of this tragedy — sustaining export flows at the cost of deepening poverty and sacrificing the nation’s future. n nSnapback Sanctions and the Collapse of Iran’s Oil Trade n nThe snapback sanctions, established under UN Security Council Resolution 2231, allows the automatic reinstatement of sanctions previously lifted under the nuclear deal. With this process now reactivated by Western powers, Tehran faces renewed restrictions that have forced it into unequal, clandestine trade arrangements. n nChina, Iran’s largest buyer, has not officially reported its oil imports since 2022, and India recently joined the game by purchasing a $111 million shipment under opaque terms. Meanwhile, Russia profits from selling cheaper oil in global markets, undermining Iran’s remaining competitiveness. n nIn a desperate attempt to keep its market share, the regime now sells crude at discounts ranging from $6 to $15 per barrel, directly depleting national wealth while enriching foreign traders and regime insiders. Over 90 percent of Iranian exports go to China, creating a dangerous dependency that drastically reduces profit margins and leverage. n nHidden costs further erode Iran’s income: inflated shipping and insurance fees, and reliance on a “dark fleet” of vessels operating with their transponders off to evade sanctions. Each exported barrel carries heavy invisible costs — turning the nation’s vital industry into a daily struggle for survival. n nHow Mismanagement Deepens the Gap n nA comparison with neighboring producers reveals the depth of Iran’s economic disaster. Regional rivals such as Saudi Arabia, Iraq, and Qatar have expanded their production capacity and attracted massive foreign investments. n nIn the West Karun shared fields, Iraq’s production exceeds Iran’s by more than double — 950,000 barrels per day versus 420,000 — creating an annual revenue gap of over $13.5 billion. While Iraq partners with global energy firms, Iran faces a $250 billion investment deficit. n nThis gap not only reduces current income but also weakens Iran’s long-term position in the global energy map. Meanwhile, Qatar continues to extract oil and gas from the shared South Pars field, reaping billions from resources that Iran fails to access due to mismanagement and lack of infrastructure. n nInternal Crisis: Gas Imbalance and Declining Production n nBeyond external sanctions, Iran faces an internal crisis that further cripples production. The domestic gas imbalance — with household consumption exceeding 50 percent in winter — disrupts the gas injection process vital for maintaining oil reservoir pressure. n nWithout this injection, production drops sharply. Experts estimate annual direct losses of $5 billion and the potential destruction of 16.3 billion barrels of recoverable oil, equivalent to $815 billion at $50 per barrel. n nMany of Iran’s oil fields are already in decline, with production falling between 5 and 15 percent annually. Without new investment, output is projected to decrease by 300,000 barrels per year, while neighboring countries double extraction from shared reserves. n nThe Bleak Outlook: Strategic Defeat for the Regime n nFuture scenarios paint a grim picture. Under full sanctions enforcement, Iran’s oil revenue could fall below $18 billion, driving inflation beyond 90 percent. Even under the most “optimistic” outlook — with limited diplomatic relief — inflation remains above 60 percent, and oil income stagnates at $25 billion. n nThis ongoing crisis reflects a strategic failure: a regime that has mortgaged Iran’s future for short-term survival. While other nations invest oil revenues in post-oil diversification, Tehran is trapped in daily bargain sales, draining its reserves for the benefit of Khamenei’s patronage networks.