Hamid Mollazadeh
Iran’s oil sector is once again at the center of a familiar contradiction: rising export volumes on the one hand, and persistent uncertainty over foreign exchange inflows on the other. While official statements and international data confirm a notable increase in crude exports and production, questions remain about how much revenue is actually making its way back into the country’s economy.
Iran’s Oil Minister Mohsen Paknejad recently stated that the volume of oil sold—measured in barrels per day—remains “at a decent level” and that the current trend is continuing.
International data appear to support this claim. According to global tracking figures, Iran’s crude oil exports reached 2.06 million barrels per day in November, marking the second consecutive month in which average daily exports exceeded the two-million-barrel threshold. Although this figure is slightly below October’s peak of 2.15 million barrels per day, tanker-tracking data suggest that November’s level remains one of the strongest performances in Iran’s oil export record in recent years.
Production figures tell a similar story. Data from the International Energy Agency (IEA) indicate that Iran’s oil output has increased by roughly 110,000 barrels per day over the past 11 months. From a production level of around 3.39 million barrels per day in December last year, output rose to approximately 3.5 million barrels per day by November, reflecting steady gains despite ongoing sanctions.
Key Issue
Nonetheless, the key issue is not the number of barrels leaving the country, but the fate of the dollars earned from those sales. This debate intensified after Iran’s central bank governor Mohammadreza Farzin told parliament that the bank merely allocates foreign currency and does not generate it—remarks widely interpreted as shifting responsibility toward the oil and petrochemical sectors. The comments came amid sharp fluctuations in the open-market exchange rate and fueled speculation that oil revenues may not be returning to the domestic economy at expected levels.
In response, the oil minister drew a distinction between volume and price. While export volumes are holding up, he noted that international oil benchmarks have fallen significantly compared with last year, a factor beyond Iran’s control that directly affects revenues.
The government’s strategy, he argued, is to compensate for lower global prices by increasing production and sales volumes through new projects and field developments, thereby stabilizing national income.
One such project is the expansion of processing capacity at the South Azadegan joint oil field, a key asset in Iran’s West Karun region in the oil-rich Khuzestan Province. The launch of the second processing train at the central processing facility—now the largest oil and gas processing unit in the country—has already boosted output by more than 50,000 barrels per day over the past 14 months. When fully completed, the facility will be capable of processing up to 320,000 barrels per day of crude, while also handling associated gas that is currently being flared.
Despite these operational gains, the broader question persists: if exports and production are rising, why does foreign exchange scarcity remain such a pressing concern? The answer likely lies beyond the oil fields themselves, touching on sanctions-related financial bottlenecks, payment mechanisms, and the complex process of repatriating revenues. For Iran, the challenge is no longer proving it can sell oil, but ensuring that the economic benefits of those sales are fully realized at home.
