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Economy

Iran Allocates Billions Of Euros Of Oil To “Individuals” For Black-Market Exports

November 15, 2022
Bahram Khodabandeh
2 min read
The scheme is apparently aimed at providing funds to the cash-trapped government while evading sanctions
The scheme is apparently aimed at providing funds to the cash-trapped government while evading sanctions

The Iranian government has quietly passed a resolution in the midst of nationwide protests to sell 4.4 billion euros of crude oil to “individuals,” who are then expected to offer the oil in the informal market.

The scheme, which is apparently aimed at providing funds to the cash-trapped government of President Ebrahim Raisi while evading sanctions, paves the way for the corruption of hundreds of individuals.

The resolution allows the Ministry of Roads or the companies affiliated with the Ministry of Welfare to introduce individuals to the National Iranian Oil Company (NIOC), which will sell them millions of barrels of crude oil at an agreed price.

According to the plan, the individuals are to sell the oil to foreign customers, with a price discount caused by sanctions. They would then hand over the proceeds to the government after paying the National Development Fund's share (40 percent) and the NIOC (14.5 percent).

According to this year’s budget, the NIOC is also required to provide 4.5 billion euros of crude oil to the military and law enforcement agencies, which are to spend the proceeds on "defense, development projects, and elimination of poverty."

This means that a total of 9 billion euros of oil, representing about one third of the money generated by oil sales foreseen in the current annual budget, will be allocated to Iran’s black-market export and laundering operation.

Who will receive the oil?

Due to the embargo on the sale of oil, individuals who sell Iranian oil on the global market are usually connected with money laundering networks inside or outside the country.

The buyers are not official representatives of international trading companies, but usually middlemen and brokers who buy Iranian oil at a huge discount price and sell it to trading companies as "clean" after the shipment changes from hand to hand.

No one exactly knows how much the discount rate, sales commission and brokerage commission are.

IRGC is the big winner

Iran's Islamic Revolutionary Guards Corps (IRGC) and their affiliates will get two-thirds of the crude oil allocated to military institutions, representing about 1 billion euros.

One-third of the oil distributed among brokers outside the Ministry of Oil, or nearly 2 billion euros, will also be provided to the IRGC to "support projects" No information is given about these projects except their names: Shahid Chamran project, Shahid Zamaniya project, etc...

The shares of police, the Ministry of Defense and the military are equivalent to more than 205 million euros, nearly 630 and almost 690 million euros, respectively. The General Staff of the Armed Forces will receive 256 million euros.

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