Iran’s recent customs report on crude oil exports has further muddied the waters surrounding oil production and revenue statistics.
On March 9th, the regime’s Customs Administration released details of the country’s foreign trade, stating that oil exports reached $32.59 billion over the past eleven months. However, in December 2023, Mohammad Rezvanifar, Deputy Economy Minister and Director General of Iranian Customs, announced oil export figures of $26.46 billion for the entire year ending December.
Critics point out that a mere $6 billion increase in oil sales during January and February falls far short of the target set in the regime’s 2023-2024 budget plan. Additionally, concerns remain regarding the ambiguity surrounding sales transactions and the repatriation of earned funds.
The regime state media reported on December 18, 2023, that oil, gas, and gas condensate revenue is projected to fall short of budget estimates by 45%. The budget plan anticipated generating 351 trillion tomans from oil, gas, and gas condensate exports during the first seven months of 2023. However, only 195 trillion tomans were actually realized.
Analysts argue that forced discounts on oil sales, below both budgeted and market prices, represent a significant waste of national resources. This is believed to be a tactic employed to circumvent sanctions and secure purchases from China, Iran’s primary oil buyer.
State-run daily Etemad previously revealed, on November 29th, that while the regime initially declared $29 billion in oil revenue for the first eight months of 2023, “about one-third of the oil income was wasted in the process of evading sanctions.”
The report further stated that “the value of oil exports, including crude oil and gas condensate, in the first 8 months of the year was 29 billion dollars,” but only “20 billion dollars” ultimately reached Iran. This suggests that the regime lost nearly one-third of its oil income due to sanctions evasion measures.
The discrepancies extend beyond the projected oil sales deficit. The method of collecting revenue under sanctions, with the official banking network inaccessible, raises questions about how these alleged sums are integrated into Iran’s economy.
Furthermore, the rising dollar price in Iranian markets fuels anxieties about dwindling foreign exchange reserves held by the central bank. While the regime insists it possesses sufficient foreign exchange resources, this claim contradicts the conditions of the currency market and the exchange rate of gold and dollars.
The government sets the dollar price used for gold coin auctions at exchange centers close to 90,000 tomans, significantly higher than the current open market rate. This, according to analysts, suggests the government’s economic team anticipates a dollar price approaching 100,000 tomans for the coming year.
Further compounding the confusion surrounding oil revenue statistics over the past two years is the rising trend of Iranian currency prices. Experts believe this indicates that revenue from oil sales is not being effectively channeled into the country’s economic cycle.
Iran’s continued inclusion on the FATF blacklist, coupled with international sanctions, hinders official transfers of oil sales revenue into the country’s banking system. The regime claims to have implemented two strategies to circumvent these banking sanctions.
The first strategy involves receiving payment for oil sales in the local currencies of buyer countries. However, neither the central bank nor the budget program organization has clarified how these local currencies are integrated into the Iranian banking system.
The Iraqi government’s official announcement of repaying its debt to Iran in the form of food and medicine raises a crucial question: has the regime essentially reverted to an oil-for-food program? If so, how will the country meet its foreign exchange needs to be derived from oil and gas sales?
The regime’s economic managers appear unfazed by the situation, even advocating for “clearing” as a method to sell oil and bypass sanctions. Experts, however, consider this approach detrimental and destructive to Iran’s economy.
This strategy raises further concerns regarding the regime’s claim that China will participate in Iranian construction projects in exchange for oil. These plans haven’t materialized to date, and experts see no signs of imminent implementation.
The available evidence suggests that, beyond discounted oil sales to China, the regime appears to have limited options for collecting revenue from oil exports.
