Iran is facing a financial problem on top of the pressure from the United States, which maintains a naval blockade of Iranian ports and has imposed further sanctions on its oil exports. Tehran says billions of dollars in revenue from earlier oil sales have gone missing.
A spokesperson for Iran’s judiciary said in September that a network of oil intermediaries known as “trustees” owed the government between 10 billion and 11 billion euros, or roughly $11bn to $12bn. That sum equalled half of the total oil revenue projected in the government budget for the current fiscal year. US officials, including Treasury Secretary Scott Bessent, have pointed to Iran’s difficulties in accessing oil revenue as evidence that Washington’s economic pressure campaign is working. In August, Bessent said that “Iran’s shadow banking system was buckling” under the campaign, which has been stepped up as Washington seeks to force Tehran to capitulate in the war between the two countries. That conflict was launched by the US and Israel in late February.
How a 2012 workaround created the trustee network
The debt, and the crisis it has created for the Iranian government, both stem from an oil-sales arrangement Tehran adopted in 2012 in response to US sanctions targeting its oil exports. American and European sanctions on Iranian oil sales and revenue collection also began that year. The stated rationale for those measures was that oil revenue helped finance Iran’s nuclear programme, and that restricting exports could slow its progress.
Unable to sell oil through the Oil Ministry and receive the proceeds through the Central Bank, the government devised a way around the sanctions. It began selling oil to domestic buyers, or using crude to settle outstanding obligations to institutions and organisations that the state owed money.
This gave rise to what is often called the “trustee network” in Iran. Rather than selling all its oil through official channels, the state entrusted crude to institutions, individuals and companies, which sold it on its behalf. The proceeds were supposed to flow into the government’s treasury, after which sellers or recipient institutions would recover their agreed costs and outstanding claims. Some institutions sold the oil themselves, while others contracted private trading companies to handle the sales.
Early recipients and corruption cases before 2016
The Oil Industry Pension Fund, which was set up for retired Oil Ministry employees familiar with the oil-sales process, was among the first institutions to receive crude for sale. Khatam al-Anbiya Construction Base, described as a major hub for large-scale infrastructure projects, was another recipient. Even the municipal police were paid in crude oil for sums the government owed them.
Discrepancies appeared early on between the revenue expected from these sales and the amounts sellers actually deposited into the treasury. According to the source, these gaps eventually led to some of Iran’s largest economic corruption cases.
The accounting problems and the government’s difficulty in recovering money from private sellers continued until 2016. That year, the Joint Comprehensive Plan of Action (JCPOA) nuclear deal was signed and sanctions on Iranian oil sales were lifted, allowing the government to regain control over sales. Individuals who had sold Iranian oil but failed to return the proceeds were imprisoned. With legal and transparent channels available again, the government was able, for a time, to manage its oil revenue and spending more tightly.
Renewed sanctions deepen debts owed by oil traders
After US President Donald Trump withdrew the United States from the JCPOA in 2018, during his first presidential term, Tehran once again had to rely on private oil traders to sell its crude. The problems that come with selling through intermediaries returned, including delays in handing over revenue, accounting discrepancies, debts owed by sellers to the government, and the occasional seizure of Iranian oil shipments at sea. Together, these constrained the government’s ability to manage its oil income.
Washington also widened its sanctions beyond government institutions and interests. Its lists came to include bank accounts involved in transactions with the government, currency-exchange offices, companies and individuals. As a result, the time between a person joining Iran’s oil-trading network and being sanctioned, with their assets and companies targeted and their accounts blocked or frozen, grew steadily shorter.
This left sanctioned traders with debts to the government that they could no longer settle, because they could not access their accounts. It also left Iran with little option but to expand its private sales network. That meant more people were involved in trading Iranian oil, each received a smaller volume of crude, and the risk that the proceeds would never be returned rose.
Iranian officials have also accused trustees of exploiting the sanctions workarounds to enrich themselves. These claims remain allegations, and the source does not present them as established findings. The overall sum owed by private sellers combines unpaid balances, disputed financial obligations and those allegations of corruption.
Iran’s judiciary chief recently addressed the issue, warning that oil sellers who refuse to return the proceeds will face legal action. However, the source notes that such warnings do not change the sanctions environment or remove the obstacles that prevent some sellers from paying the money back.
