The Islamic Republic, especially during Mahmoud Ahmadinejad's term, significantly changed the decision-making chain in the oil industry. During this period, some projects were entrusted to military institutions, and the sale of oil shipments to compensate for the budget deficit was assigned to entities outside the Ministry of Oil. These developments have increasingly linked Iran's oil issue to the topic of 'governance.'
Sanctions and Governance Complexities
Analyses indicate that Iran's oil issue is not limited to sanctions and lack of investment. Fundamental questions about who makes decisions, who signs contracts, and who is accountable have become a major challenge. If Iran cannot answer these questions, the influx of large investments and advanced technologies will not help improve the situation.
Read more: Strengthening Japan's Navy Amid China's Criticism of Defense Budget
State Transfers and Semi-Privatization
The Ahmadinejad government extensively transferred state assets, but these transfers did not lead to the emergence of an independent private sector. Academic research shows that this process has led to a form of semi-privatization. In this structure, the Ministry of Oil and its subsidiaries have lost much of their authority, and oil sales have been entrusted to entities such as the Law Enforcement Force. These changes have blurred the lines between employer, contractor, and seller.
Khatam Headquarters and Executive Challenges
The Khatam al-Anbiya Construction Headquarters, the economic and engineering arm of the Revolutionary Guards, has played an important role in oil contracts. This headquarters has its own specific complexities due to its extensive network of affiliated companies. During Ahmadinejad's time, this headquarters obtained large contracts without real competition, which itself led to increased disorder in the oil industry.
International Experiences and Domestic Challenges
Personal experiences working in international companies like Shell and BP also indicate that political pressure and sanctions have raised the costs of entering the Iranian market. Additionally, the multiplicity of power centers and ambiguous responsibilities significantly increases the cost of remaining in the market for foreign companies. Therefore, the current structure of Iran's oil industry needs fundamental changes to attract foreign investment and improve efficiency.
Read more: English Think Tank Analysis: Europe's Dependence on American Energy Threatened by War Against Iran · Trump Rejected Proposal to Reopen the Strait of Hormuz and Returned Political Risks to the Oil Market
