Iran International
Bank Melli Iran's branch in Hamburg remains open despite EU sanctions that Germany says apply to the Iranian state-owned bank's German operation, as Washington steps up pressure for its foreign branches to be closed.
The German Foreign Ministry, responding to questions from Iran International, said Bank Melli and its Hamburg branch were already covered by wide-ranging EU restrictions.
“Bank Melli Iran is already subject to far-reaching sanctions at EU level, and this of course also applies to Bank Melli's branch in Germany,” the ministry said.
The ministry did not say whether Germany was considering closing the Hamburg branch or whether Washington had formally asked Berlin to do so.
US pressure
The questions follow US Treasury Secretary Scott Bessent's launch earlier this week of “Operation Economic Outcast,” a campaign aimed at cutting Iran's financial and commercial links abroad.
Bessent specifically targeted Bank Melli, saying “every Bank Melli branch must be shuttered.”
The German Foreign Ministry said Berlin had taken note of Bessent's announcement and remained in talks with Washington and other partners.
“The federal government has taken note of US Treasury Secretary Bessent's announcement and is in constant contact with the US as well as other partners in the EU and in the region regarding further measures against Iran,” it told Iran International.
Berlin gave no indication in its response that a decision had been made on the future of the Hamburg branch.
EU sanctions
The European Union reimposed nuclear-related sanctions against Iran in September last year after France, Germany and Britain triggered the snapback mechanism the previous month.
The measures restored asset freezes on listed Iranian entities and broader restrictions on trade and financial activity.
Bank Melli is explicitly listed under the EU measures along with all its branches and subsidiaries.
EU documents describe Bank Melli as Iran's largest bank, owned and controlled by the Iranian government, and say it provides services to the Ministry of Defense and Armed Forces Logistics.
Under the sanctions, funds and economic resources belonging to or controlled by listed entities must be frozen, and funds or economic resources generally cannot be made available to them directly or indirectly.
EU rules also restrict transfers involving Iranian banks and their branches, while providing exemptions and procedures under which competent authorities can authorize certain transactions.
German oversight
The German Foreign Ministry said the Bundesbank was responsible for implementing EU and UN financial sanctions under Germany's foreign trade framework and referred questions about banking supervision to BaFin.
The Bundesbank says its Financial Sanctions Service Center is Germany's authority for implementing restrictions on capital and payments.
BaFin declined to comment to Iran International on possible measures involving Bank Melli, citing legal confidentiality requirements concerning individual financial institutions.
The regulator told Iran International that Bank Melli remained in its official database and said any final measure that could legally be made public would be published on its website.
BaFin has previously acted against the Hamburg branch.
The regulator said in October 2021 that it had imposed a credit ban on the branch on September 7 of that year after finding that it had breached the four-eyes principle required under German banking rules.
Iran International has also asked the Bundesbank how the restored EU sanctions are being implemented in relation to Bank Melli's Hamburg branch. The central bank had not responded by the time of publication.
For now, Germany has confirmed that EU sanctions apply to the branch but has not said it plans to close it, even as Washington presses foreign governments to shut Bank Melli operations abroad.
The documents, released in redacted form by Canada's Immigration and Refugee Board at the request of Global News, include a Canada Border Services Agency assessment that said Abbas Omidi's senior role in Iran's mining sector benefited the government's ability to finance the Islamic Revolutionary Guard Corps and armed groups abroad.
“As a result of his power and influence, the subject directly benefited the Iranian economy and the government’s ability to continue to fund terrorism and human rights abuses throughout the world,” the CBSA said.
The agency said Omidi was “critical in the Iranian government’s continued ability to draw in mining revenue and fund the military, weapons manufacturing, and terrorism, both foreign and domestic.”
The assessment was written in 2024 and formed part of hundreds of pages disclosed in Omidi's deportation case, Global News reported.
Omidi's lawyer did not respond to requests for comment from Global News. At his deportation hearing, Omidi acknowledged serving as a deputy director general in Iran's Ministry of Industry, Mines and Trade but said his role was mainly technical.
CBSA links mining revenue to IRGC funding
The CBSA said Iran's mining sector was closely tied to the military and the IRGC and provided revenue that helped Tehran support armed groups in the region.
“The abundant amount of wealth generated from the mining industry allows the Iranian regime and specifically, the IRGC, to continue to be a state sponsor of terrorism,” the CBSA report said.
The agency said the IRGC provided financing, training, weapons, technology and other support to groups including Lebanon's Hezbollah, Hamas, Palestinian Islamic Jihad, the Popular Front for the Liberation of Palestine and Iraqi group Kata'ib Hezbollah.
Canada lists the IRGC as a terrorist entity.
The CBSA said Omidi “directly and significantly impacted and benefited the Iranian economy and the government’s ability to continue to fund its military, weapons production, and terrorism and human rights abuses throughout the world.”
Global News said the allegations about Omidi's role in revenue used to support armed groups were contained in the CBSA assessment but were not raised during his deportation hearing.
Deportation case centers on senior government role
The CBSA is seeking to deport Omidi on the grounds that he was a senior official in Iran's government, Global News reported.
Canada moved in 2022 to bar senior Iranian government officials from entering or remaining in the country after Tehran's crackdown on anti-government protests.
Omidi arrived in Canada as a visitor in 2022 after serving in Iran's mining and trade ministry. The CBSA said he had “exerted significant influence on the exercise of government power,” according to Global News.
His deportation hearing began in March. The Immigration and Refugee Board said on Wednesday that the hearing had concluded and that a decision was expected in the fall.
Omidi had sought to keep the proceedings closed to the press, but the board rejected the request after Global News challenged the move.
The reserves, intended to cushion severe shortages and emergencies, have been tapped at a pace in recent weeks that has prompted warnings from experts within the state about the consequences of continuing, the sources said.
Remaining fuel stocks could be depleted within several weeks if withdrawals continue at the current rate, limiting the government's ability to offset disruptions to domestic production or imports and prevent widespread supply stoppages, according to the sources.
The growing reliance on strategic stocks has also opened a dispute between the government and the Revolutionary Guards over how long withdrawals should continue, they said.
Revolutionary Guards officials oppose unrestricted use of the reserves, while government officials want to keep drawing on them to keep filling stations operating and contain public concern over shortages and higher prices, the sources added.
Daily shortfall strains supplies
Iran produces about 120 million liters of gasoline a day but consumes around 135 million liters, leaving a daily deficit of about 15 million liters.
Ali-Akbar Saghab Esfahani, head of Iran's Energy Optimization and Strategic Management Organization, put the daily gasoline shortfall at 14 million to 15 million liters on August 15.
Before the shortage intensified, imports covered about half the gap, much of it through fuel supplies from Russia, the sources said.
A US maritime blockade, Ukrainian strikes on Russian refining infrastructure and the closure of the Caspian Sea supply route have sharply restricted Iran's ability to maintain those imports, according to the sources.
Iranian diplomatic efforts to secure alternative fuel supplies from allies and neighboring countries have yet to produce an agreement.
Britain and Qatar have meanwhile backed a new US economic campaign against the Islamic Republic, as Washington seeks to restrict its financial, shipping and energy trade routes.
Fuel moved to reopen Tehran stations
Gasoline shortages have reached Tehran, forcing some filling stations to close, according to information obtained by Iran International.
Authorities have ordered fuel transferred from neighboring provinces to reopen some stations in the capital, but dozens of others remain at risk of closure, the sources said.
Videos and messages sent by citizens have also documented long lines, station closures and difficulties obtaining gasoline in Tehran, Alborz, South Khorasan and Razavi Khorasan provinces.
The Tehran regional manager of the National Iranian Oil Products Distribution Company attributed temporary closures at some stations to a sudden rise in demand and congestion along fuel transportation routes.
Reports from citizens suggest the disruption is also affecting transportation costs. Several people told Iran International that fares charged by ride-hailing services Snapp and Tapsi had risen sharply as fewer drivers accepted trips.
“Gas stations are crowded, GPS doesn't work and you can't work for Snapp. Fares have gone up, but there are no drivers to accept the trip. We're left without money and without gasoline,” a Tehran resident told Iran International.
Another citizen said the cost of a regular Snapp journey had risen from 1,000,000 rials last month to 3,200,000 rials, while a resident of Shiraz described steep increases in ride-hailing fares despite no gasoline shortage there.
A Snapp driver said fuel consumption from running air conditioning for passengers required him to refill about every two days, but his quota had been exhausted and purchases outside the quota were limited to 25 liters.
Other messages sent to Iran International accused authorities of deliberately restricting supplies before a possible price increase.
“When they want to raise the price of cooking oil, they say there isn't any. When they want to raise the price of rice, they say there isn't any. But after the price goes up, everything is available,” a resident of Mashhad said. “Now it's gasoline's turn.”
The Mashhad resident said filling stations were not receiving enough gasoline but predicted supplies would become readily available if authorities raised prices.
Another citizen questioned why a gasoline deficit of 10% to 20% was causing such widespread disruption and accused authorities of deliberately making fuel scarce to make consumers more willing to accept higher prices.
“Many gas stations are either closed or have no gasoline to distribute,” a Tehran resident said, also accusing the government of diverting fuel for foreign currency earnings.
Another message accused authorities of using the shortage as justification for a gasoline price increase and manipulating distribution to create congestion at filling stations and reduce resistance to higher prices.
“Half of Pakdasht's gas stations have no gasoline and the rest are extremely crowded,” a resident said. “They are trying to force people to accept higher gasoline prices.”
Government weighs three options
The government is considering three responses to the shortage: limiting gasoline supply to domestic production levels, reducing subsidized quotas and selling additional consumption at the unrestricted price, or shifting fuel quotas from vehicles to individuals.
Concern that higher gasoline prices could trigger protests has encouraged the government to use strategic reserves to buy time, the sources said.
Fuel price increases have been politically sensitive in Iran. A sudden rise in gasoline prices in November 2019 triggered nationwide protests followed by a deadly state crackdown.
The attempt to delay harder choices by drawing on emergency stocks is now creating another problem, according to Iran International's sources: the buffer intended to protect Iran during severe supply disruptions may itself be only weeks away from exhaustion.
