Fuel smuggling has become one of the most pressing economic crises in Iran today. Official reports indicate that 20 to 30 million liters of fuel “disappear” daily. However, the reality is that this fuel is not lost but systematically smuggled. The true beneficiaries of this illicit trade are powerful institutions and influential groups within the ruling system. The existence of a complex and deeply rooted fuel smuggling mafia is no longer a secret—even high-ranking officials of the regime openly acknowledge it.
Masoud Pezeshkian openly questioned this phenomenon, stating:
“How can nearly 20 million liters of fuel disappear daily when the state itself is both the producer and distributor? These thieves should be executed.”
Similarly, Mohammad Bagher Ghalibaf, the head of the regime’s parliament, admitted:
“Between 25 to 30 million liters of fuel are smuggled out of the country every day. There is no doubt that this smuggling is conducted in an organized manner, as the main producers and consumers of this fuel are the very entities behind this trade.”
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The Organized Structure of Fuel Smuggling
These statements point to the existence of a well-organized smuggling network operating freely across Iran’s borders. While everyone is aware of this network, a policy of concealment and cover-ups is actively employed to protect those involved.
On December 20, 2023, the Iranian regime’s newspaper Arman Melli shed light on the nature of this network, stating:
“These smuggling operations are carried out by organized groups that exploit weaknesses in oversight systems. These networks have strong communication structures and wield influence at the highest levels of decision-making in the country.”
The fundamental question remains: How can such a network smuggle tens of millions of liters of fuel daily when all border crossings and energy transport routes are under the strict control of security and military agencies?
Iranian Regime’s Role in Iraq’s Oil Smuggling Network
Adding to the evidence of the regime’s involvement in large-scale fuel smuggling, Reuters published a report on December 3, 2024, revealing a sophisticated oil smuggling network in Iraq. This network reportedly generates between $1 billion and $3 billion annually for the Iranian regime and its affiliated groups. The report, based on information from five informed sources and three Western intelligence reports, indicated that the network exploits Iraqi government policies that allocate subsidized fuel to asphalt factories. Instead of using the fuel for its intended purposes, smuggling networks redirect it for export to other countries.
According to Reuters, between 500,000 to 750,000 tons of heavy fuel oil—equivalent to 3.4 to 5 million barrels of crude oil—are smuggled monthly from Iraqi factories and primarily exported to Asian markets. A common tactic used by this network involves blending smuggled Iraqi fuel with Iranian fuel and selling it under the label of an Iraqi product. This allows the Iranian regime to bypass strict U.S. sanctions on its oil exports while reaping enormous profits. Notably, when Reuters sought comments from Iranian regime and Iraqi authorities, both governments declined to respond.
Government Complicity in Fuel Smuggling
Perhaps the most shocking admission regarding the Iranian regime’s involvement in fuel smuggling came from Pezeshkian himself, who revealed during a parliamentary session that the government purchases approximately 9 million liters of fuel daily from smugglers. This statement confirms that the authorities are fully aware of these smugglers’ identities. Instead of combating them, the government engages in direct business transactions with them. If the regime knows who these smugglers are, why does it not take action against them? The answer lies in the deeply entrenched interests that profit from this trade.
The Iranian Regime’s Security Forces: The Key Players in Fuel Smuggling
Despite repeated claims of ignorance and denial from regime officials, it is evident that smuggling 20 million liters of fuel daily is not the work of small-scale criminals or disorganized groups. Fuel smuggling has become a highly structured operation controlled by entities with the resources to manage, regulate, and even legitimize these transactions. At the forefront of this operation is the Iranian regime’s security forces, which play a primary role in this illicit trade.
By controlling ports, border crossings, and international smuggling networks, these forces have turned fuel smuggling into a multi-billion-dollar industry. A significant portion of the profits is funneled into military entities and proxy groups, while key officials and influential figures within the regime receive their share of the enormous revenues. Meanwhile, the Iranian people bear the consequences—suffering from fuel shortages, soaring prices, and economic crises exacerbated by corruption and sanctions.
The Policy of Concealment and Misinformation
A deeper analysis of Iran’s fuel smuggling crisis reveals that it is not merely an economic problem but a structural and political one. Although government officials publicly acknowledge large-scale smuggling, no concrete actions have been taken to curb it. Everyone knows who is responsible, yet a policy of cover-ups and misinformation continues to shield the real perpetrators.
The state-run Ham Mihan highlighted this deception in its editorial, criticizing the government’s inaction:
“Can you publish a report exposing the true scale of this network? Why the silence? Does it conflict with political interests? Who are these smugglers you keep threatening without taking any real action? If these threats had ever been enforced, there would be no need to repeat them daily. The day you publish an official report listing the names and photos of these so-called ‘respectable’ smugglers, only then will the people believe that you are serious about ending this crisis.”
As long as this powerful smuggling mafia remains active, fuel smuggling will persist, intensifying economic pressure on the Iranian people. After all, a knife cannot cut itself.
