TL/DR –
Iran’s government is missing billions of dollars in revenue from previous oil sales, with oil intermediaries known as “trustees” allegedly owing between $11bn and $12bn. The debt from this oil-sales arrangement, adopted in 2012, was a response to US sanctions on Iranian oil exports, involving the use of domestic buyers and institutions to sell oil on behalf of the state. However, major discrepancies and delays in returning revenues from these sales resulted in large-scale economic corruption cases, with the situation worsening after the US expanded its sanctions in 2018, leading to a surge in debts owed by now-sanctioned oil traders to the government.
US Naval Blockade and Sanctions Impact Iran’s Access to Oil Revenues
With a naval blockade by the U.S. and more sanctions on Iran’s oil exports, Tehran reports billions of dollars missing from prior oil sales. Iran’s judiciary claims “trustees” or oil intermediaries owe the government roughly 10-11 billion euros ($11bn-$12bn), amounting to half of its total projected oil revenue for the current fiscal year.
US Officials view Iran’s Economic Struggles as Evidence of Successful Pressure Campaign
US officials, like Treasury Secretary Scott Bessent, point to Iran’s difficulties accessing oil revenues as a sign of effective economic pressure. Having introduced the sanctions, the U.S. is searching for ways to make Tehran capitulate in the ongoing war.
Understanding the Role of “Trustees” and their Debt to the Iranian Government
The owed billions and the ensuing crisis result from an oil sales strategy adopted by Tehran in 2012 to circumvent U.S. sanctions. The sanctions aimed to halt Iran’s nuclear programme by blocking its oil sales and revenue collection.
In reaction, Iran began selling oil to domestic buyers or using it to settle state debts, birthing a network of oil intermediaries, the “trustee network”. The proceeds were to be transferred to the government’s treasury, but discrepancies emerged between expected and actual revenues, leading to some of Iran’s largest economic corruption cases.
Effect of the Nuclear Deal on Iran’s Oil Industry
The government regained control over oil sales in 2016 with the signing of the Joint Comprehensive Plan of Action (JCPOA) nuclear deal, and sanctions on Iranian oil sales were lifted. Those who sold oil without returning the proceeds were imprisoned, permitting the government to manage its oil revenues and spending more effectively.
How the US Withdrawal from JCPOA Impacted Iran’s Oil Sales
The U.S. exit from the JCPOA in 2018 forced Iran to rely on private oil traders again. However, the extended sanctions impacted bank accounts, companies, and individuals involved in transactions with the Iranian government, leading to frozen or blocked accounts and accumulated government debts.
Iran’s Trustees Accused of Exploiting Sanctions to Enrich Themselves
Iranian officials accuse trustees of using the sanctions to become wealthy. The lost billions are a mix of outstanding payments, disputed financial obligations, and corruption allegations. Iran’s judiciary chief warns that legal action awaits oil sellers refusing to return the proceeds from sales.
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