Iran budget chief calls for oil revenues to go into sovereign fund

Iran’s oil revenues should be deposited into a national fund before being spent, the country’s budget chief said on Monday, urging greater transparency and fiscal discipline as the military's share of the revenue continues to rise.

A third of Iran’s projected oil revenue for the year ending March 2026—worth $12.4bn—will go directly to the armed forces and military projects, three times more than last year.

The rest of the oil income, along with $33.5bn in gas revenues, will be split between the government’s budget, the National Development Fund (NDF), and the national oil company.

“The best course of action is to deposit all oil revenues into the National Development Fund,” the head of Iran’s planning and budget organization Hamid Pourmohammadi told a forum in Tehran on Monday.

“This way, we can determine at the start of the year how much the government needs, and based on that, the government can plan how much it can spend by year’s end.”

Pourmohammadi offered no detail on the existing arrangements which allow the fund to be bypassed and institutions such as the Revolutionary Guards (IRGC) access a portion of Iran’s oil revenue before it reaches the government’s coffers.

He conceded, however, that the administration of moderate president Masoud Pezeshkian lacks consensus on how to implement the NDF-takes-it-all idea.

The NDF was established in 2010 to replace the Foreign Currency Reserves Fund (FCRF). While the FCRF was meant to safeguard oil income for future generations, the NDF has increasingly been used to cover budget deficits, despite the state objective of investing oil revenues.

The fund has long operated under the direct control of supreme leader Ali Khamenei, with administrations needing his approval for withdrawals.

One of Pezeshkian’s first moves in office was to request funds to pay wheat farmers.

In recent years, billions have been syphoned to the IRGC and the state broadcaster, functioning as main vehicles of Khamenei’s hard and soft power.

The NDF’s share of oil and gas revenues dropped from 40% to 20% in the two years ending December 2024, according to Didban Iran citing a deputy of Iran’s budget office Hamid Amani Hamadani.

Iran’s private sector owed $7bn to the fund in January 2025, according to senior NDF official Mehdi Ghazanfari. This is a debt repaid slowly in local currency, which the fund must convert to dollars at below-market rates.

Ghazanfari put the total pay-outs from the fund to the administration at just above $103bn in 12 years. He also said $45bn had been loaned to private-sector in the same period—often to firms with ties to the IRGC or the supreme leader’s office

As of May, the fund’s remaining assets stood at $30.7bn—dragged down by unpaid debts from both government and politically shielded companies.