Economy

Where's the money? Iranians wonder where regime's oil profits are going

By Babak Dashti

Former IRGC chief Mohsen Rezaei talks to the media after registering his candidacy for the June 2021 presidential elections, at the Interior Ministry in Tehran, on May 15. [Atta Kenare/AFP]

Former IRGC chief Mohsen Rezaei talks to the media after registering his candidacy for the June 2021 presidential elections, at the Interior Ministry in Tehran, on May 15. [Atta Kenare/AFP]

While top Iranian officials tout record income on oil exports, lawmakers, observers and civilians are wondering where all the money is going.

Oil Minister Javad Owji on March 24 said that "Iran has reached a record high of crude exports and revenues since sanctions hit the country's oil industry in 2018".

His tweet was accompanied by a quote from Iranian leader Ali Khamenei, who praised Iranian president Ebrahim Raisi's government for circumventing US sanctions.

In early February, Fars News agency, which is affiliated with the Islamic Revolutionary Guard Corps (IRGC), reported that the country's oil export income grew almost 500% in the first five months of the Raisi administration.

Iranian leader Ali Khamenei praised President Ebrahim Raisi's administration in a speech delivered March 21. [Khamenei.ir]

Iranian leader Ali Khamenei praised President Ebrahim Raisi's administration in a speech delivered March 21. [Khamenei.ir]

Iranian President Ebrahim Raisi's inauguration ceremony was held under COVID-19 restrictions in Tehran in 2021. [Khamenei.ir]

Iranian President Ebrahim Raisi's inauguration ceremony was held under COVID-19 restrictions in Tehran in 2021. [Khamenei.ir]

These and other statistics by regime officials, most reported with no proof, have sparked intense debate inside Iran about where the profits are ending up.

The issue is particularly acute as Iranians are suffering from growing poverty, unemployment, inflation and desperation.

On Twitter, which is banned in Iran but used by many Iranian officials and citizens who use virtual private networks, several conversation threads about the alleged oil profits ended up with questions about why this money was not directly improving the lives of ordinary Iranians.

For instance, journalist and activist Abdollah Ganji, who is close to the IRGC, on April 10 tweeted, "Incidentally, I had the same question and asked the oil minister: 'If you're 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."

A number of social media users had their own opinion of the oil minister's remarks, with one saying, "Because there are too many of those who steal the money."

"It is all lies," another one said. "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."

"The system is corrupt, and it corrupts others. The situation will not get better as long as this regime is in power," another user said.

Lies, deception

Ali Hatami, an Iran-based journalist who works on oil-related stories, told Al-Mashareq he does not believe the Oil Ministry's statement about the country's income from oil exports during Raisi's first year as president.

"This regime is built on lies and deception. Officials make a series of statements for 'domestic use' while they make different statements for the West. They are boasting about the amount of oil they have been able to sell and simultaneously complaining about sanctions."

The Islamic Republic has no credibility and there is no reason anyone should believe anything its officials say, Hatami said.

Former Minister of Roads and Urban Development Abbas Akhoundi recently alluded to the IRGC's engagement in a "clandestine economy" when he announced the existence of a "transnational corruption network".

In August, the US Treasury sanctioned an Iranian oil smuggling network based in Oman, which had been helping the IRGC's Quds Force (IRGC-QF) sell Iranian oil to foreign customers.

It identified the director of the network as Mahmoud Rashid Amur al-Hasbi, an Omani national, who had been co-operating with senior IRGC-QF officials, including Rostam Ghasemi.

Raisi's top economic official Mohsen Rezaei, a former IRGC commander, in November claimed that faced with sanctions, Iran had been selling oil via smuggling and "moving the revenue into the country covertly".

Many blame the IRGC

Many Iranians see a direct connection between the oil income embezzlement, and corruption in general, and the past and present IRGC officers who enjoy disproportionate representation and privileged positions in Raisi's administration.

Owji, the oil minister, has filled the ministry with former IRGC commanders and security forces, even though he was never a member of the IRGC himself.

Other members of the Raisi cabinet have been charged with corruption and embezzlement by the Islamic Republic's own judiciary system, while others have been charged with terrorist acts and are "wanted" or sanctioned by the West.

Among them is Interior Minister Ahmad Vahidi: the first commander of the IRGC-QF, who is accused of involvement in the 1994 bombing of a Jewish community centre in Argentina.

Vahidi has been on an Interpol "wanted list" for years.

Also among them is Minister of Intelligence Esmail Khatib, an extremist figure closely affiliated with Khamenei, who is one of the founders of the IRGC's intelligence division.

Both Vahidi and Khatib are notorious for their ruthlessness, and for their commitment to Khamenei and the IRGC.

'Military-security-mafia apparatus'

"After eight years of tension between former Foreign Minister Javad Zarif and the IRGC, the Islamic Republic's foreign policy is now officially and openly dominated by this military-security-mafia apparatus," said Iran analyst Behzad Baghaei.

Iranian Foreign Minister Hossein Amir-Abdollahian was a close, long-time ally of the late IRGC-QF commander Qassem Soleimani.

Like Soleimani, Amir-Abdollahian has prioritised the Iranian regime's intervention in the region, and has chosen to throw his support behind IRGC-QF proxies in the region over the national interest.

Another notorious IRGC figure in the current cabinet is Rostam Ghasemi, minister of roads and urban development, who was also former president Mahmoud Ahmadinejad's oil minister.

Ghasemi, who is the former commander of the IRGC's Khatam-al-Anbiya Construction Headquarters, is under US sanctions for his involvement in many of the IRGC's corrupt, mafia-like economic deals.

With 40 years of experience in the IRGC, he has held positions from commander of Khatam al-Anbiya base to deputy economic director of the IRGC-QF.

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