Iran's Oil Intermediaries Owe Billions as Sanctions Squeeze Revenue

Iran's government is owed between eleven and twelve billion dollars by a sprawling network of oil traders and institutions—a sum equivalent to half the country's projected annual oil revenue. The debt emerged from a system Tehran devised in 2012, when American and European sanctions began choking off its ability to sell crude through normal channels. Unable to move money through the Central Bank or Oil Ministry without triggering sanctions, Iran turned to an improvised solution: entrust the oil itself to domestic buyers, pension funds, construction companies, even municipal police departments. These "trustees," as they became known, would sell the crude on the government's behalf and return the proceeds. The arrangement was meant to be temporary. It became permanent.

The system worked poorly from the start. Even in those early years, money went missing. Sellers reported lower revenues than expected. Accounting discrepancies piled up. Some individuals who had been entrusted with Iranian oil simply did not return what they owed. The government pursued corruption cases against some of them, and a few ended up imprisoned. But the underlying problem—how to move oil and money when the world's financial system was closed to you—remained unsolved. Then, in 2016, the nuclear deal lifted sanctions. For a brief window, Iran regained control. It could sell oil openly again through legitimate channels. The government recovered some of the missing money. The trustees faded into the background.

That reprieve lasted two years. When President Donald Trump withdrew the United States from the nuclear agreement in 2018, sanctions snapped back into place, and Iran found itself back where it started: unable to use normal banking channels, forced once again to rely on private traders to move its oil. But the landscape had changed. The United States had expanded its sanctions far beyond government institutions. It now targeted bank accounts involved in any transaction with Iran, currency-exchange offices, companies, and individuals. The window of time between when a trader entered Iran's oil network and when that trader—along with their assets and accounts—got sanctioned grew shorter and shorter.

This acceleration created a trap. Traders who had been entrusted with Iranian oil suddenly found their bank accounts frozen. They could not access the money they had received from selling the crude. They could not return it to the government even if they wanted to. Meanwhile, Iran, desperate to keep oil moving, kept expanding its network of private sellers. More people meant smaller volumes per trader, which meant higher risk that money would not come back. Some traders, according to Iranian officials, deliberately exploited the chaos to enrich themselves, pocketing the difference between what they sold the oil for and what they claimed to have received.

By September of this year, Iran's judiciary spokesperson put a number on the damage: between ten and eleven billion euros owed by trustees to the state. The figure stunned even within Iran's government—it represented roughly half of all the oil revenue the country had budgeted for the entire fiscal year. American officials, including Treasury Secretary Scott Bessent, seized on the disclosure as proof that their sanctions campaign was working. Bessent had declared in August that Iran's shadow banking system was "buckling" under pressure. The debt was evidence of that collapse.

But the debt also exposed a deeper bind. The billions owed were not simply the result of theft or incompetence, though some of that occurred. They were the direct consequence of a sanctions regime so comprehensive that it had broken the basic mechanics of how a government collects money for oil it has sold. Traders could not access accounts to pay. The government could not force payment without access to international banking. Iran's judiciary chief warned that oil sellers who refused to return proceeds would face legal action. The threat meant little. No court order could unfreeze a sanctioned bank account or force a trader to move money through channels that did not exist. The debt would likely remain, a permanent scar from years of operating outside the global financial system.