The National Iranian Oil Company (NIOC), a key financial lifeline for Iran, is facing severe cash flow issues due to U.S. sanctions and the prolonged war. Iranian President Masoud Pezeshkian described the current situation as the "most difficult period since the 1979 Islamic Revolution."
On August 5, the semi-official Fars news agency reported that the Iranian Industrial Mineral Bank recently froze NIOC's bank accounts due to unpaid debts. The amount of the debt and the accounts that were frozen have not been disclosed.
This action comes despite provisions in Iran's budget law that allow NIOC to postpone some debt repayments until the end of next year.
NIOC's debt to the National Development Fund (NDF), Iran's sovereign wealth fund, amounts to approximately $17 billion (about 24 trillion won). Mehdi Ghazanfari, chairman of the NDF, stated, "The development of the Azadegan oil field, one of Iran's largest oil fields, has been delayed, making it difficult to repay debts solely from oil revenues."
Ghazanfari also mentioned that while they considered recovering debts by taking over other oil fields, the reality has been a repeated postponement of repayment deadlines. He emphasized that the debt issue can only be resolved once the war ends and the situation normalizes.
Due to U.S. sanctions that have blocked foreign investment and funding, NIOC has relied on domestic institutions like the NDF to secure the necessary funds for oil field development. This has led to an increase in NIOC's debt and a greater burden on the sovereign wealth fund.
NIOC's financial struggles exemplify the deteriorating economic conditions in Iran exacerbated by sanctions and war. President Pezeshkian reiterated in an interview with state broadcaster IRIB that "Iran is facing the most challenging situation since the Islamic Revolution."
He asserted, "Economic sanctions have expanded to encompass banks and financial transactions, and military conflicts have erupted. External pressures aim to incite public discontent and provoke anti-government protests."
Pezeshkian highlighted that Iran has been able to endure the crisis thanks to the unity of its people, emphasizing the importance of internal solidarity.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.