The Islamic Revolutionary Guard Corps (IRGC), Iran’s most powerful military force tasked with protecting the regime, has significantly increased its control over the country’s oil exports. According to sources in both the West and Iran, the IRGC now manages around half of Iran’s oil shipments.
Despite heavy U.S. sanctions on the Iranian oil industry, the country continues to export more than 1 million barrels of oil per day, primarily to China.
When Donald Trump became President, he pulled the U.S. out of the 2015 nuclear agreement, known as the Joint Comprehensive Plan of Action (JCPOA), and reinstated sanctions on Iran’s oil exports in 2018. Although President Joe Biden has kept these sanctions in place, his administration has been less strict about enforcement. This leniency has allowed Iran’s oil exports to continue, particularly as global oil markets face challenges, such as the ongoing conflict caused by Russia’s invasion of Ukraine.
As the sanctions continue, the IRGC has expanded its reach into the oil sector. It has increased its control over key aspects of oil logistics, including front companies and a network of ships that transport crude oil covertly. Three years ago, the IRGC controlled about 20% of Iran’s oil exports, but that share has now grown to approximately 50%, according to Western security experts.
Earlier this year, Iran’s oil exports reached their highest levels in six years, but recent weeks have seen a decline. In particular, shipments to China have slowed. The discount on Iranian crude to Brent crude has shrunk to its smallest margin in five years, and Iranian exports dropped in October due to rising regional tensions in the Middle East.
Iranian media reported that exports to China fell sharply in November, dropping by 524,000 barrels per day compared to October. This marked the lowest exports to China in four months, with shipments at just 1.31 million barrels per day.
Iran’s Oil Minister, Mohsen Paknejad, has warned that the country is prepared for additional sanctions on its oil exports once President-elect Trump assumes office.
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