Fuel smuggling from the borders of Sistan and Baluchistan province has become a significant source of income for some Iranian regime institutions. Reports indicate that the Islamic Revolutionary Guard Corps (IRGC) plays a crucial role in this illicit activity, transferring millions of liters of fuel daily to neighboring countries, particularly Pakistan and Afghanistan. The revenue generated from this smuggling funds military expenditures and advances weapons projects, including the construction of missiles and drones.
The Role of the IRGC in Fuel Smuggling
Energy industry analysts and regional security experts have revealed to the Washington Post in recent years that the fuel smuggling network is orchestrated by Iranian regime elements, notably the IRGC and private shipping companies based in Persian Gulf countries. The IRGC reportedly enforces strict control over maritime borders and port facilities to dominate this lucrative trade. When unauthorized individuals attempt to profit from fuel smuggling, the IRGC often intervenes to eliminate competition.
Mojtaba Mahfouzi, a parliamentarian representing Abadan, highlighted the magnitude of this operation, stating that such large-scale smuggling involves powerful mafias. “Smuggling of this volume cannot be attributed only to individual smugglers; there are mafias operating behind the scenes,” he remarked.
The U.S. Treasury Department has previously accused the IRGC of profiting from oil and petroleum product smuggling. Hamidreza Dehghannia, spokesperson for the Headquarters for Combating Goods and Currency Smuggling, admitted on December 26, 2021, that approximately nine million liters of petroleum products are smuggled daily, with three million liters being fuel.
Contradictory Statements from Officials
While some officials, such as Bijan Zanganeh, Iran’s former oil minister, have downplayed the scale of smuggling, claiming it does not exceed five million liters per day, others have offered conflicting accounts. The regime’s president Masoud Pezeshkian recently acknowledged that 20 to 30 million liters of fuel are smuggled daily, stating, “This volume of smuggling, given that production and distribution are under our control, is unacceptable.”
Impact on Iran’s Energy Crisis
Iran’s energy sector is in disarray, plagued by systemic inefficiencies and decades of mismanagement. The regime’s use of euphemistic terms like “dissatisfaction” to describe energy shortages has drawn criticism from experts. Hashem Orei, a Sharif University academic, called the term misleading, asserting that Iran’s energy issues have escalated from shortages to a full-blown crisis. Orei noted that Iran faced an 18,000-megawatt electricity shortage in 2024, a figure projected to rise to 24,000 megawatts in 2025.
Javad Nofarsti, an energy economics expert, highlighted the gas shortage, explaining that Iran’s daily requirement is 1.2 billion cubic meters, yet production is only 850 million cubic meters. This shortfall has led to blackouts, the closure of universities, schools, and offices, and the shutdown of gas power plants in several provinces.
The Broader Economic Implications
The roots of Iran’s energy crisis can be traced to years of poor planning and the impact of international sanctions, which have hindered oil sales. The Jomhouri-e Eslami newspaper recently emphasized the need for “honorable international policies” to lift sanctions, restore trade, and address energy shortages. The paper also called for resolving the FATF (Financial Action Task Force) issue to curb fuel smuggling.
Facing mounting economic pressures and the threat of public unrest, the regime has signaled a potential shift in policy. Pezeshkian announced that the FATF accession bill would be reviewed by the Expediency Council, with Supreme Leader Ali Khamenei’s approval. Hours before this announcement, Abdolnaser Hemmati, Minister of Economic Affairs and Finance, confirmed Khamenei’s agreement to revisit the Palermo Conventions on combating organized crime and the CFT (Combating the Financing of Terrorism) agreements.
Conclusion
Fuel smuggling exemplifies the systemic corruption within Iran’s ruling institutions, particularly the IRGC, and underscores the regime’s inability to manage its energy resources effectively. The smuggling not only depletes national resources but also exacerbates the ongoing energy crisis, leaving Iranian citizens to bear the brunt of the regime’s failures. Unless fundamental changes are made, the intertwined issues of corruption, mismanagement, and sanctions will continue to cripple Iran’s economy and energy sector.
Source » irannewsupdate