Iran claims oil debtors owe billions amid sanctions crackdown

Iran claims that its network of oil intermediaries owes the state billions of dollars, yet the origins of this massive debt remain murky. As American ships block Iranian ports and new sanctions squeeze exports, Tehran faces a different crisis: unaccounted revenue from past sales has vanished into thin air. A spokesperson for Iran's judiciary stated in September that these trustees owe between 10 billion euros and 11 billion euros to the government. That sum equals roughly half of what the current budget projected as total oil income.

US officials, including Treasury Secretary Scott Bessent, point directly at this struggle to collect funds as proof that economic pressure is working. In August, Bessent declared that Iran's shadow banking system was buckling under Washington's campaign. That push intensifies now that Washington seeks to force Tehran to capitulate in the war launched by the US and Israel last February.

But who exactly are these intermediaries? Why does Iran need them so badly? And where did the money go? The answer starts with a deal from 2012. When American and European sanctions hit oil sales and revenue collection that year, Tehran needed a workaround. Officials argued that oil money funded the nuclear program, so stopping exports would halt progress. Unable to sell crude through the Oil Ministry or get cash via the Central Bank, the state turned to private buyers and existing debts within its own institutions.

This created the trustee network. Instead of moving all oil through official channels, the government handed crude over to individuals, companies, and organizations to sell on its behalf. The plan was simple: sellers would pass proceeds into the treasury while recouping their costs later. Some groups sold the oil themselves, while others hired private traders. Early recipients included the Oil Industry Pension Fund for retired ministry employees, Khatam al-Anbiya Construction Base for infrastructure projects, and even municipal police departments settling owed payments in barrels of crude.

Discrepancies appeared quickly. Even back then, the revenue expected from sales did not match what sellers actually deposited into the government's coffers.

Discrepancies in accounting eventually sparked some of Iran's largest economic corruption cases. These issues persisted until 2016, when the Joint Comprehensive Plan of Action nuclear deal was signed and sanctions on Iranian oil sales were lifted. The government then regained control over oil sales after recovering money from private sellers entrusted with the task. Individuals who sold oil but failed to return proceeds faced imprisonment under these new rules. With legal channels restored for a time, officials could manage revenues and spending with far greater control than before.

How did funds from oil sales go unreturned in the first place? After US President Donald Trump withdrew the United States from the JCPOA in 2018 during his first term, Tehran relied again on private traders to sell its crude. The old problems resurfaced immediately because selling through intermediaries rather than official state channels caused delays and created new debts owed by oil sellers to the government. Shipments of Iranian oil were occasionally seized at sea while these disputes festered in legal limbo.

Furthermore, the US expanded its sanctions beyond just government institutions to include bank accounts involved in transactions with Iran. Currency-exchange offices, companies, and individuals found themselves on the sanctions lists as well. Consequently, the time between an individual participating in Iran's oil-trading network and facing asset freezes or account blocks grew progressively shorter. This pressure contributed to a massive accumulation of debts owed by sanctioned traders who could no longer access their accounts. The government was left with little choice but to expand its private oil-sales network further. That meant increasing the number of people involved while reducing the volume allocated to each one, ultimately raising the risk that proceeds would never be returned.

Iranian officials have also accused trustees of exploiting these sanctions workarounds to enrich themselves personally. The billions of dollars currently owed by private sellers represent a messy combination of outstanding payments, disputed financial obligations, and serious allegations of corruption. Iran's judiciary chief recently addressed this issue directly, warning that oil sellers refusing to return proceeds will face legal action without delay. Yet such warnings do not change the harsh sanctions environment or remove the obstacles preventing some traders from paying up. The situation remains precarious for communities dependent on these revenues.