Cheap Oil, Expensive Words of the Minister
Cheap Oil, Expensive Words of the Minister
This analytical report is written by Saeed Aghenji, the editor of Irangate News Agency. It is a critical and documented report that relies on international sources and analytical data to precisely and evidentially examine the recent claims of the Minister of Oil about the ineffectiveness of sanctions and the lack of impact of the snapback mechanism on Iran’s oil sales.
The Claim of Sanctions Being Ineffective: A Political Narrative Against Economic Reality
In recent weeks, Iran’s Minister of Oil has stated that the activation of the snapback mechanism has no impact on Iran’s oil sales and that sanctions have lost their effectiveness. These statements are made while the European Union has officially announced the return of UN sanctions, and the global energy market is facing new pressures. As a result, these remarks have received widespread attention in economic and political circles.
Analysis of data and credible international reports shows that the image the Minister presents of Iran’s oil situation is more of a political nature and reassuring for domestic public opinion than a reflection of economic reality.
Exports Continue, But at a Cost
The reality is that Iran is still selling oil. According to reports from Reuters and Bloomberg, Iran’s daily crude oil exports in 2024 are estimated to be between 1.5 to 1.8 million barrels, a significant figure that shows an increase compared to the peak sanction years of 2019 and 2020.
However, more detailed investigations by international analytical bodies indicate that these exports are carried out with heavy discounts, costly routes, and the use of hidden intermediaries. The analytical platform Iran Open Data has estimated that Iran lost about 20% of its potential oil revenue last year due to these limitations and additional costs. Simply put, Iran is selling oil, but cheaper, harder, and riskier than before.
Snapback Mechanism: Sanctions Returned Under a New Name
The Minister of Oil has emphasized that the snapback mechanism has no impact on Iran’s oil sales.
However, according to the official statement of the European Union Council in September 2025, the activation of this mechanism means the return of all UN sanctions against Iran, including financial, insurance, maritime transport, and foreign investment restrictions.
Analysis by the Israeli think tank JISS also shows that although these sanctions may not completely stop Iran’s exports in the short term, they severely reduce production capacity and investment in the oil industry in the medium term.
In such conditions, the claim that the snapback mechanism is ineffective is neither accurate nor consistent with field evidence and international reports.
Shadow Economy and the Risk of Dependence on China
Circumventing sanctions has gradually become part of the official structure of Iran’s oil economy. Unflagged tankers, ship-to-ship transfers, changing the name of origin and destination, and sales through Asian intermediaries are only part of a complex network Iran has created to maintain its oil exports.
However, this network has numerous hidden costs: increased insurance risk and ship seizures, a drop in sales prices due to mandatory discounts, and a 70-80% concentration of the export market on China, which alone is a major risk.
According to energy trade experts, over-reliance on a single major buyer makes Iran highly vulnerable to any political or economic changes in relations with Beijing.
Lack of Transparency: Narrative Instead of Reality
For years, Iran has not published official data on the actual volume and price of oil exports. As a result, domestic economic assessments are shaped not based on transparent statistics but on political and unverifiable narratives.
The Minister of Oil’s claim that there is no problem in oil sales cannot be considered reliable or measurable in the absence of independent data.
Energy analysts warn that the lack of transparency has pushed energy policy towards short-term promotional decisions without backing.
A Costly Future for Iran’s Oil
Sanctions may not have stopped Iran’s oil exports, but they have kept the country’s oil economy in a fragile and costly state. Dependence on unofficial routes, reduced actual income, inability to attract foreign investment, and increasing political risks are all challenges hidden behind optimistic statistics.
In reality, Iran still sells oil today, but at a higher cost, with less income, and a more uncertain future.
What Should Be Done
The Minister of Oil’s claims about the ineffectiveness of sanctions reflect only part of the reality. Although Iran’s exports continue, the impact of sanctions remains indirectly and structurally persistent.
To break this repetitive cycle, experts suggest: 1) Full transparency in export and oil revenue data, 2) Diversifying export markets beyond China, 3) Domestic investment in extraction and refining infrastructure and technologies, 4) Focusing on non-oil exports to reduce economic dependence on oil.
Sanctions may not have silenced Iran’s oil sales, but they have undoubtedly reduced the quality and economic power of these sales. Ignoring this reality is the same mistake that could lead to much heavier costs for Iran’s energy industry and national economy in the future.