Iran Turns to Shadow Networks to Sell Oil, Import Goods Amid Sanctions, Raising Corruption Concerns
TEHRAN, Iran – Iranian authorities are increasingly relying on unofficial channels to sell oil and import essential goods as U.S. sanctions tighten and regional tensions escalate, but the practice is fueling concerns about widespread corruption, according to officials and industry insiders.
A growing network of state-linked “trustees” is handling opaque deals to export Iranian petroleum and other sanctioned products, with billions of dollars in proceeds reportedly not being returned to the country. Judiciary chief Gholam-Hossein Mohseni-Ejei recently confronted financial authorities about the missing funds, demanding accountability from those who approved the arrangements.
“Who gave them this oil and other facilities? You at the Central Bank and the economy ministry and other places, was it not you who said you audited these trustees?” Mohseni-Ejei asked during a meeting with judges and provincial officials earlier this month.
The situation stems from years of difficulty in repatriating foreign currency earned from oil sales, exacerbating an already struggling economy plagued by inflation and a depreciating currency. The challenges have intensified as hopes for reviving the 2015 nuclear deal – and lifting associated sanctions – have faded.
Ali Akbar Pour Ebrahim, a former CEO of Naftiran Intertrade Company (NICO), the primary arm of Iran’s Ministry of Petroleum for crude oil sales, described a significant shift in how Iran’s oil money is managed. Speaking to the Iranian Labour News Agency (ILNA) in mid-February, Pour Ebrahim said the ministry has been sidelined.
During the administration of former President Hassan Rouhani, the ministry directly handled oil proceeds. However, under the subsequent administration of President Ebrahim Raisi, that authority was transferred to bank trustees operating under the purview of the Central Bank.
“They forced the Petroleum Ministry to shut down its own trustees and created bank trustees,” Pour Ebrahim explained. He alleges that as much as $11 billion has not been returned after being handled by these trustees, who he claims used nationals from Pakistan and Afghanistan to open bank accounts in the United Arab Emirates and funnel funds through shell companies.
The U.S. has imposed restrictions on activities with Iran since 1979, following the seizure of the U.S. Embassy in Tehran, and continues to enforce a number of sanctions programs.
Parliament member Hossein Samsami confirmed to state-affiliated media that some agent banks have colluded with the trustees, falsely reporting the receipt of oil money to the Central Bank without actual deposits. Mahmood Khaghani, a former oil official, suggested that an independent audit would reveal misappropriated funds exceeding $11 billion.
The trustee-based system, Khaghani explained, originated roughly two decades ago with the emergence of a “shadow government” as international pressure mounted over Iran’s nuclear program, eventually leading to United Nations sanctions. He alleges that experts within the Petroleum Ministry and other bodies were replaced by individuals affiliated with the Islamic Revolutionary Guard Corps (IRGC) and other unelected state entities.
“In effect, a number of people in the parliament, judiciary, government, and security and intelligence apparatuses entered oil deals,” Khaghani said. “This did not remain limited to selling oil… The mafia is not active exclusively in oil but everywhere.”
Adding to the complexity, the government is now allowing importers of essential goods, including food, to trade oil for their products. Agriculture Minister Gholamreza Nouri Ghezeljeh announced this month that importers will be officially designated to receive oil shipments from the Petroleum Ministry, with the ability to barter up to $1.5 billion worth of goods.
This move comes after the Pezeshkian administration eliminated a preferential currency exchange rate for essential goods imports, ostensibly to combat corruption. Critics argue the new scheme simply shifts the opportunity for illicit gain to a different group.
Further complicating matters, reports have surfaced alleging that Iranian authorities are selling sanctioned ships for scrap metal to acquire new vessels, circumventing sanctions on its tanker fleet, which is used to transport oil through a “shadow fleet” that often turns off transponders to avoid detection. NICO reportedly sold one sanctioned vessel for approximately $14 million, significantly below its market value.
The United States has been increasingly focused on intercepting tankers carrying Iranian oil and pressuring China to halt oil purchases, with Iran threatening to close the strategic Strait of Hormuz in response.
