The Islamic Revolutionary Guard Corps (IRGC), Iran’s most powerful armed force defending the regime, has increased their influence over Iranian oil exports and is estimated to control half of these, Western officials and Iranian insiders have told Reuters.
Despite U.S. sanctions on the Iranian oil industry and exports, the Islamic Republic continues to export an estimated more than 1 million barrels per day (bpd) of oil, mostly to China.
During his first term in office, U.S. President-elect Donald Trump tore up the so-called Iran nuclear agreement, formally known as the Joint Comprehensive Plan of Action (JCPOA), and re-imposed sanctions on Iran’s oil industry and exports in 2018.
President Joe Biden and his Administration, while keeping all sanctions on Iran in place, haven’t monitored strictly the compliance of the sanctions as they were keen to keep oil flowing amidst crises elsewhere such as the Russian invasion of Ukraine.
In the meantime, the Revolutionary Guard Corps has expanded its influence over Iranian oil exports, including in logistics, front companies, and the shadow fleet shipping the crude under the radar, according to numerous sources who spoke to Reuters.
Three years ago, the Revolutionary Guards controlled about 20% of Iran’s oil exports—now that share has surged to up to 50%, Western security experts and officials told Reuters.
Earlier this year, Iran boosted its oil exports to six-year highs.
However, exports are estimated to have slowed in recent weeks, as Iran’s crude oil going to China has been priced at its narrowest discount to Brent in five years as Iranian cargo loadings slumped in October due to the heightened regional tensions in the Middle East.
Over the weekend, Iranian media reported that Iran’s oil exports to China slumped in November by 524,000 bpd from October. At 1.31 million bpd, the Islamic Republic’s exports to its main buyer were the lowest in four months in November.
Iran is ready to face possible additional sanctions on its oil exports when President-elect Trump takes office early next year, Iranian Oil Minister Mohsen Paknejad was quoted as saying last month.
By Tsvetana Paraskova for Oilprice.com