Iranians Ask, Where Is The Money From Higher Oil Exports?

The currency, rial, fell to a three-month low of 280,000 to one US dollar on Monday.

Iranian government officials including President Ebrahim Raisi and Oil Minister Javad Owji have been recently boasting about a 40-percent increase in Iran's oil exports and revenues.

Conservative newspaper Jomhouri Eslami wrote last week, "What is the impact of the extra revenues, if officials are right about selling as much oil as in the months before the US imposed sanctions?”

The daily wrote: "Some individuals officials are making pleasant statements to entertain the people, but their statements are not rooted in reality, and this will disappoint the people and will erode their trust in the government."

"While the prices of essential commodities and other goods are rising daily,” and people are suffering, “making hollow statements about improvement in the economy will not fool anyone," Jomhuri Eslami wrote.

Former reformist lawmaker Mostafa Kavakebian wrote in an April 8 tweet: "Government officials say that the Raisi administration can sell millions of barrels of oil at $100 per barrel” by circumventing US sanctions, and even releasing Iran's frozen assets in South Korea. “But why these measures do not affect people's livelihood and our diplomats are still wasting their time to get results from the Vienna talks?"

Hardliner journalist and activist Abdollah Ganji, who is close to the IRGC, tweeted in response, "Incidentally, I had the same question and asked the oil minister ‘if you selling more oil and you can repatriate the money, why we do not see its impact on people's livelihood?’ He said: We spent most of that money to make up for the $17 billion budget deficit from last year. The rest of it was spent on importing foodstuff with double prices on the global market."

Responding to the same question, social media users wrote in their comments that the extra income's impact is not visible "Because there are too many of those who steal the money."

Another comment read: "It is all lies. They do not sell more oil and do not bring any money into the country. They export the same amount of oil in barter trade deals. And when they bring back any money for selling the cheap oil, they have to pay a high percentage to middlemen." Yet another Twitter user said: "The system is corrupt, and it corrupts others. The situation will not get better as long as this regime is in power."

Oil Minister Javad Owji had said on March 24, "Iran has reached a record high of crude exports and revenues since sanctions hit the country’s oil industry in 2018." His Twitter post was accompanied by a quote from Supreme Leader Ali Khamenei, who praised the Raisi government for circumventing US sanctions.

Owji added that "The Oil Ministry provided hard currency and rial funds to the government beyond its budget commitments."

The minister's statement was in line with international media reports in February that said Iran’s oil exports had risen despite US sanctions. Reuters reported on February 10 that in the preceding two months daily shipments had surpassed one million barrels a day, the highest since May 2019.

Although there have been more exports, the additional revenue is probably too small to have a visible impact. If there were no US sanctions, Iran could export 2 million bpd and earn close to $60 billion a year at current prices, but Tehran is getting less than half of that now because even if it exports 1 million barrels pd, that is half the pre-sanction volume, sold at a discount.

Meanwhile, middlemen who do the illicit shipping take a big cut and a significant amount of the money probably does not come back in cash, but in food imports, as the oil minister’s remark seemed to suggest.