Secret documents expose new network selling sanctioned Iranian oil

Mahmoud Siadat told Iran's ILNA news agency that restrictions on exports of petrochemicals, steel, food and other goods had contributed to the decline, including limits imposed because of war damage and domestic demand.

Siadat said the greater concern was the speed at which other countries were moving into the market while Iranian trade was shrinking.

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  UAE trade halt threatens one of Iran’s remaining economic lifelines

Rivals gain ground

"The more important problem is that during the same period in which we faced a decline in exports to Afghanistan, our competitors entered the Afghan market very seriously," Siadat said.

He said Uzbekistan's exports to Afghanistan had risen 42% this year, adding that the growth was rapidly reducing Iran's share of the Afghan market. He also pointed to what he described as a multibillion-dollar Saudi gas extraction agreement near Iran's border.

Saudi Arabia-based Delta Energy International signed an agreement with Afghanistan's Ministry of Mines and Petroleum this week to explore and extract oil and gas in the Kushk-Tirpul basin in the western provinces of Herat and Badghis.

Afghan authorities put the initial investment at $200 million, while Delta has said a wider energy program could involve tens of billions of dollars in potential investment if exploration and feasibility studies support further development.

The decline comes amid a broader contraction in Iran's foreign trade since the war began. An Iranian trade official has said non-oil exports and imports fell by about 30% in the first four months of the current fiscal year, while customs data from China and Turkey showed steep declines in trade with Iran. Indian exports to Iran also fell sharply, although India's imports from Iran rose on higher purchases of Iranian crude oil and liquefied petroleum gas.

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Trucks wait for up to 15 days

Siadat said Iran was also hurting its position in Afghanistan through long delays at its own borders, with hundreds of trucks waiting to cross at Milak and Dogharoun.

He said some trucks were being held for between 12 and 15 days before leaving Iran, while traffic moved much more smoothly on the Afghan side.

"There is no logic in our trucks being held for 13, 14 and sometimes 15 days at the border with Afghanistan," he said. "Long stops at the border cause an unusual increase in transport costs and freight rates and reduce our competitiveness in the Afghan market."

Siadat broadened his criticism beyond border management, saying the problem reflected wider weaknesses in Iran's state structure and fragmented decision-making.

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"Many of the organizations that are not even directly under the government's supervision play a fundamental role in creating this problem," he said, adding that regulatory and military bodies needed to reach a common position.

He also criticized the limited role of businesses in policymaking. "The private sector in Iran is, in many cases, largely a ceremonial presence in decision-making," he said. "It only hears promises but sees no action."

US pressure adds to wider trade strain

Siadat said, however, that sanctions were making Iranian goods more expensive in export markets, adding another layer of pressure on businesses already dealing with transport restrictions.

The United States has intensified economic pressure on Iran through an oil export blockade and expanded secondary sanctions aimed at restricting Tehran's access to dollars, foreign financing and international trade channels. Iran's total trade has fallen by between 25% and 35%, according to President Masoud Pezeshkian.

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  Iran loses ground on trade as war hits oil and non-oil exports

Washington has continued to add measures. The US Treasury on Tuesday imposed a new round of Iran-related sanctions targeting the country's aviation sector and companies and intermediaries in several countries, part of the Trump administration's wider economic pressure campaign.

Siadat said Afghanistan had become more important because problems at Iran's southern ports and other trade routes had cut or reduced transit flows.

"Afghanistan's border is currently one of the few borders through which we can work," he said, warning that delays on the Iranian side were putting one of the country's remaining export outlets at risk.

After weeks of reduced gasoline supplies and kilometer-long queues at filling stations, the government raised the non-quota price to 100,000 rials per liter, roughly 4.3 US cents.

Iran now has a three-tier gasoline pricing system. Each vehicle receives 60 liters per month at 15,000 rials per liter, or about 0.65 US cents, and another 50 liters at 30,000 rials, or about 1.3 cents. Gasoline purchased beyond those quotas costs 100,000 rials per liter, double the previous non-quota rate.

Government spokesperson Fatemeh Mohajerani has said the increase will not affect around 85 percent of car owners because their monthly consumption remains below the combined 110-liter subsidized quota.

At first glance, selling gasoline for only about 4.3 cents per liter while continuing to provide 110 liters per month at significantly lower subsidized rates may make the financial impact of the increase appear limited.

But the figures suggest the government could still raise several hundred million dollars annually. Whether the policy can substantially reduce consumption or Iran’s dependence on gasoline imports is another matter.

Government revenue

Iranian authorities have not published detailed current figures showing exactly how much gasoline is sold at each of the three price tiers.

But with roughly 22 million gasoline-powered passenger cars and a combined monthly quota of 110 liters per vehicle, those vehicles could consume a maximum of around 80 million liters of subsidized gasoline per day even if every driver used the full quota.

With national gasoline consumption at roughly 134 million liters per day, that would leave about 54 million liters being consumed outside the subsidized quotas.

That estimate is broadly consistent with remarks last November by the head of the National Iranian Oil Products Distribution Company, who said around 40 percent of gasoline refueling was being carried out using emergency cards provided at filling stations rather than motorists’ personal fuel cards.

A confidential 94-page report by the National Iranian Oil Refining and Distribution Company reviewed by Iran International puts average gasoline consumption in the Iranian year 1403, which ended in March 2025, at around 124 million liters per day, including additives and petrochemical products.

If around 54 million liters continue to be purchased each day at the non-quota rate, the additional 50,000 rials charged per liter would generate roughly 98.5 trillion rials over a year.

At the current exchange rate of around 2.3 million rials per dollar, that amounts to approximately $428 million.

The figure is a scenario based on current consumption patterns rather than a firm revenue forecast. The higher price could encourage some motorists to reduce consumption or rely more heavily on their subsidized quotas.

The government has also eliminated subsidized gasoline quotas for newly registered and imported vehicles, requiring them to purchase fuel at the non-quota rate.

Customs and Industry Ministry data show that Iran has added an average of around one million domestically produced or imported vehicles to its roads annually over the past five years.

Once a full year’s cohort of around one million additional vehicles is subject to the higher rate for 12 months, assuming average monthly consumption of 120 to 150 liters per vehicle, the latest increase could generate about another $35 million in annualized revenue.

Under these assumptions, the government could eventually generate less than half a billion dollars in additional annual revenue from the higher gasoline price.

Can higher prices ease the shortage?

According to Central Bank of Iran statistics, the country imported approximately $2.9 billion worth of gasoline last year.

Iranian officials say the country currently needs to import around 10 million liters of gasoline per day, with the cost at regional market prices broadly comparable to last year’s import bill.

President Masoud Pezeshkian has repeatedly argued for higher gasoline prices, saying it makes little sense for Iran to purchase gasoline abroad at much higher prices and then sell it domestically at heavily subsidized rates.

But even if the higher non-quota price generates close to $500 million annually, that would amount to only around 17 percent of the $2.9 billion Iran spent on gasoline imports last year.

The additional revenue, therefore, would not come close to covering the country’s gasoline import costs.

Officials have also argued that higher prices could reduce consumption. But many of Iran’s heaviest gasoline users work in freight transport, passenger transport and other service-sector businesses that depend directly on vehicle use.

For those workers, consuming less gasoline can also mean earning less income rather than simply cutting unnecessary fuel use.

Other structural factors are simultaneously increasing gasoline demand.

Official statistics show that CNG supplies for dual-fuel vehicles have declined every year over the past five years as Iran’s natural-gas shortage has worsened.

CNG consumption fell to around 16 million cubic meters per day last year, 38 percent below its 2020 level. The decline is equivalent to adding roughly 9 million liters to daily gasoline demand.

Iran has also not commissioned a new oil refinery since 2018, while around one million vehicles continue to be added to the domestic fleet each year.

The combination of rising vehicle numbers, declining CNG availability and limited refining capacity is therefore likely to deepen the gasoline deficit and increase Iran’s need for imports even if higher prices curb some demand.

The continued depreciation of the rial poses another problem.

The US dollar has gained around 120 percent against the rial since September 2025. If the currency continues to weaken, part of the additional revenue generated by the gasoline increase will quickly lose value in dollar and real terms.

There is also inflation.

Iran’s 12-month average inflation rate has climbed to nearly 70 percent, while food prices are around 128 percent higher than a year ago.

Higher gasoline prices can feed directly into transportation costs and, in turn, the prices consumers pay for goods and services. A policy that generates less than half a billion dollars in additional revenue could therefore impose broader costs on households already struggling with steep price increases.

The much larger cost of sanctions

The sums involved become even smaller when compared with the economic losses associated with sanctions on Iran’s oil exports.

According to Central Bank statistics, Iran generated $57.4 billion in oil-related exports last year when its crude and petroleum-product exports were valued at Gulf market prices.

That represents their nominal market value. The amount Iran ultimately receives is substantially lower.

Homayoun Falakshahi, a senior analyst at commodity intelligence company Kpler, told Iran International that around 25 to 30 percent of Iran’s oil revenues are lost between loading and delivery because of the mechanisms required to circumvent sanctions.

Those costs include discounts offered to Chinese buyers, payments to brokers, falsification of shipping documents, ship-to-ship transfers, longer transit times, floating-storage costs and the expense of chartering vessels belonging to the so-called shadow fleet.

On that basis, Iran lost an estimated $15 billion to $17 billion last year from the oil it actually exported because of discounts and sanctions-circumvention costs.

There is also the oil Iran was unable to export.

Iran’s crude exports in 2025 averaged around one million barrels per day below pre-sanctions levels. At prevailing prices, the value of that foregone export volume was approximately $25 billion a year.

Taken together, those figures suggest Iran suffered more than $40 billion in potential oil-revenue losses and additional export costs associated with sanctions last year.

That is around 80 times the less than $500 million in additional annual revenue the government could generate from the gasoline measures under current consumption assumptions.

The gap has widened further this year.

Since mid-July, the movement of newly loaded Iranian crude from the country’s oil terminals toward final overseas markets has effectively ground to a halt.

Some crude has continued to be loaded, but instead of heading to its final destination, much of it has accumulated offshore in waters south of Iran. Around 55 million barrels of Iranian oil are currently held in floating storage there and effectively trapped inside the maritime blockade.

Deliveries to China have nevertheless continued because not all of the crude arriving at Chinese ports was recently loaded in Iran.

Kpler data obtained by Iran International show that Iranian crude discharged in China averaged around 500,000 barrels per day last month, down from roughly 800,000 barrels per day in June and July.

Much of that oil had left Iran earlier and was drawn from previously accumulated floating stocks in Asian waters.

That explains how Iranian crude can continue arriving in China even as the movement of newly loaded oil from Iran to overseas markets has largely stopped.

The comparison underscores the scale of Tehran’s economic problem.

The government could raise less than half a billion dollars annually by charging consumers more for gasoline, yet the price increase does little to address the structural forces driving Iran’s gasoline deficit, while the country simultaneously faces tens of billions of dollars in lost oil revenues and sanctions-related costs.

The Office of Foreign Assets Control added airlines including Iran Aseman Airlines, Iran Airtour, Kish Air, Qeshm Air, Taban Airlines, Sepehran Airlines, Varesh Airlines, Zagros Airlines, Karun Airlines, Chabahar Airlines and Fly Persia to its Specially Designated Nationals list.

Newer carriers including Air Shiraz, Ava Airlines, Fly Kish, Mehr Airways, Raimon Airways and Soroush Air were also listed.

Saha Airlines, formally listed as the Armed Forces Air Transport Service, was among those targeted. OFAC describes it as providing both passenger and freight air transport. The Iranian airlines were designated under Executive Order 13902 and are subject to secondary sanctions, according to Treasury’s notice.

Treasury Secretary Scott Bessent warned companies against doing business with Iranian airlines in a post on X.

“Let this be a warning to anyone doing business with Iran’s remaining airlines, all of which we sanctioned today: You are at risk of being cut off from the global financial system,” Bessent said.

He said the measures were part of Operation Economic Outcast, Washington’s campaign to cut financial lifelines to the Islamic Republic, adding that the United States had also sanctioned companies continuing to support Mahan Air.

The new sanctions follow an Aug. 24 determination by the Treasury making Iran’s aviation sector, along with its digital asset, gold, shipping and technology sectors, subject to sanctions under Executive Order 13902.

A separate group of designations targeted aviation and logistics companies outside Iran with links to Mahan Air. They included ECT Aviation Support in the United Arab Emirates, ECT Aviation Support Ltd in Britain, Malaysia-based iCargo, Kazakhstan-based Tour Invest and Turkish companies MES Cargo, S Sistem Logistics and Sky Phoenix Airways. Dubai-based Aerobravo Airplane Management and Operation was also sanctioned through its link to ECT Aviation Support.

OFAC also designated Mahran Ibrahim, an Egyptian national based in the UAE, listing him as linked to ECT Aviation Support.

Mahan Air has been under US counterterrorism sanctions since 2011. Washington accuses the carrier of serving as a conduit for the Revolutionary Guards, including by transporting personnel, weapons and military equipment. Treasury has stepped up action against companies providing logistical and commercial support to the airline in recent months.

Messages, videos and accounts sent to Iran International described deployments of police, special units and Basij forces in Tehran, Mashhad, Shiraz, Karaj, Isfahan, Tabriz, Birjand, Khorramabad, Khomein, Abadan and Qeshm.

Reports of slower internet connections also emerged from several cities, including Tabriz and Babol.

Petrol prices doubled on Monday for drivers buying fuel outside their monthly subsidised quota, rising from 50,000 to 100,000 rials a litre, about 2.3 to 4.5 US cents. The government announced the increase two days earlier.

Monthly subsidized allocations remain unchanged. Motorists can buy 60 liters at 15,000 rials per liter, about 0.7 cents, and another 50 liters at 30,000 rials, about 1.3 cents.

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  Fear of unrest complicates Iran’s gasoline dilemma

The dollar figures are negligible. The wages are the point. Average monthly pay in Iran is around 250 million rials, about $113 at Tuesday's rate, and many workers earn closer to 200 million, or roughly $90 a month.

Security forces gather around fuel stations

Several residents of Mashhad told Iran International that security forces appeared around petrol stations on Sunday, hours before the new price took effect.

“On Monday evening, I passed three gas stations. Several police vehicles were stationed outside each one, and at one station there were large numbers of Basij motorcyclists and special unit forces,” one resident said.

Another Mashhad resident described police and special units positioned at fuel stations across the city.

Video sent to Iran International from Khorramabad in western Lorestan province showed security personnel, vehicles and motorcycles deployed around the city, including what appeared to be a mounted machine gun.

Fuel supplies had already faced disruptions over the previous three weeks in areas including Razavi Khorasan, South Khorasan, Tehran and Alborz provinces.

Citizens in early September reported station closures, long lines, restrictions on purchases and waits of about two hours to obtain 10 liters of gasoline.

A Birjand resident said some filling stations had closed and displayed notices blaming “technical problems,” while police were positioned at others.

Similar deployments were described in Shiraz, where a local reported a large security presence around Maali-Abad early Tuesday, and in Karaj, particularly Fardis, Gohardasht and Mehrshahr.

A resident of Khomein in Markazi province also described a long line and numerous police officers at a fuel station on Shohadaye Daneshjoo Street.

Special units deploy in Tehran

Several Tehran residents reported increased security deployments from Monday evening, including in Shahr-e Rey and Salsabil neighborhoods.

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“The station was heavily secured. Special units and the Basij were constantly moving around, and the streets were crowded,” a resident who visited a fuel station near Ferdowsi Square in central Tehran around midnight said.

Another who went to a station on Pirouzi Street in the east described long vehicle lines with special units positioned nearby.

People in Isfahan and Abadan also reported armed police at filling stations. In Qeshm, a resident said armed personnel were deployed around major squares on Monday evening and that a confrontation occurred at the entrance to a filling station in Dargahan.

Two messages from Tabriz described a large security presence alongside deteriorating internet service.

“The city of Tabriz is full of special units. The forces are armed, and heavy equipment can also be seen,” one said.

A Babol citizen also reported slower mobile and fixed internet connections, though the reason for the disruption could not be established.

Gasoline prices carry particular political sensitivity in Iran. A sudden increase and rationing in November 2019 triggered demonstrations across dozens of cities that quickly expanded into nationwide anti-government protests.

Security forces killed around 1,500 people during the crackdown, according to a Reuters tally at the time. Thousands were arrested and authorities imposed a nationwide internet shutdown.

Government defends higher gasoline price

First Vice President Mohammad Reza Aref defended the new rate, arguing that even 100,000 rials per liter remains far below the government's cost of importing gasoline.

Imported gasoline costs the government more than 700,000 rials per liter, equivalent to about 30 cents, Aref said. Imported fuel would gradually be sold at prices closer to its cost, he added.

The government's figures for what petrol costs to produce have not held up well to examination. In November 2025, after officials put the cost at 340,000 rials a litre, about 15 cents at current rates, Iran International went through the refineries' own financial statements. They showed operating costs, excluding the value of the crude going in, of around 35,000 rials a litre, roughly 1.6 cents, a tenth of the official figure.

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Economist Mousa Ghaninejad has estimated actual gasoline consumption inside Iran at about 70 million liters a day and argued that much of the remainder recorded as consumption is smuggled out of the country.

Iranians warn of knock-on price increases

Thousands of people responding to an Iran International question about the fuel increase focused on its potential impact beyond filling stations, warning that transportation costs could push up food prices, fares and other everyday expenses.

“100,000 rials for a liter of gasoline may just be a number for some people, but for people it means another step toward making life harder,” one respondent wrote.

Another said petrol was not the problem on its own, and pointed to food. A five-liter container of cooking oil that used to cost 22 million rials, about $9.90, now sells for 40 million, roughly $18.

On a monthly wage of 200 million rials, that is a fifth of a month's pay for one container of oil.

“We buy everything at expensive dollar-linked prices, but our base salary is only $100. Where in the world can you see something like this?” one person wrote.

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Another said wages would have to rise alongside prices, since households could not absorb repeated increases on incomes that had barely moved.

For younger respondents the loss was smaller and more particular. "The feeling of going on a trip is gone. Going out for a 10-minute drive is gone. We young people said goodbye to small pleasures a long time ago," one wrote.

Minister of State Stephen Doughty said the government was introducing legislation to tighten financial and trade restrictions, widen powers to sanction ships linked to Iran and bar Iranian aircraft from landing in the UK unless exemptions apply.

“Today we are laying legislation which will tackle Iranian nuclear activity and other hostile Iranian activity,” Doughty said in a written statement to parliament.

Focus on nuclear program

Doughty said Iran had expanded its nuclear program in ways that had no credible civilian justification and pointed to its stockpile of more than 400 kg of uranium enriched to 60%.

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“Iran is the only country without nuclear weapons to enrich uranium to this level,” he said.

Britain restored UN sanctions on Iran in October 2025 after the snapback mechanism was triggered and also designated 71 people and entities linked to Iran's nuclear program, including financial institutions and energy companies.

Wider trade and financial restrictions

The new rules expand restrictions on goods, technology and services tied to sectors including energy, software, metals and gold, as well as shipping, insurance and banking.

They also ban exports of additional goods and technology that Britain says could support Iran's conventional weapons and nuclear capabilities.

Doughty said the financial measures would “further reduce the Government of Iran’s ability to access the UK financial system and raise funds in support of its nuclear programme.”

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Shipping and aviation targeted

Britain will also gain broader powers to sanction ships that it says enable or facilitate Iran's nuclear program or other destabilizing activity.

Iranian aircraft will be barred from landing in the UK unless exemptions apply, following Britain's termination of bilateral air service arrangements with Iran in 2024.

The legislation includes exemptions to allow continued operations at the Shah Deniz gas field in Azerbaijan, which supplies energy to European countries.

Doughty said Britain remained committed to diplomacy, saying a negotiated outcome was “the only long-term solution” to the dispute over Iran's nuclear program.