Iran’s oil minister resigns as country’s economic crisis worsens

Departure comes amid large drop in oil receipts, rampant inflation and shrinking economy

Iran’s oil minister has resigned days after allegations that an intermediary trust selling Iranian oil abroad owed millions of dollars’ worth of export receipts to the state.

The Iranian president, Masoud Pezeshkian, said he had accepted the resignation of Paknejad, who had given personal reasons for going.

Emergency government meetings over the weekend to combat the crisis have yielded little tangible progress, and there are growing reports that the professional middle class, notably teachers and nurses, are resigning in large numbers because their salaries are not keeping up with price rises. The central bank says its role is not to defend a specific rate, but manage fluctuations.

Iran has been using informal networks known as “trustees” to bypass US sanctions and repatriate oil revenues. A report last week by the Farhikhtegan newspaper alleged that a trust set up on Paknejad’s watch to recoup income from Iran’s overseas oil sales owed the state-owned National Iranian Oil Company nearly $2bn (£1.5bn) in revenues. Three individual trustees awarded oil contracts allegedly owe hundreds of millions of dollars each to the NIOC.

Although Iran’s oil export problem, and its impact on foreign exchange reserves, is primarily caused by the US naval blockade on Iran’s oil exports, reports of lax management or possibly corruption will do little to bolster confidence in government at a time when most Iranians are going through an unprecedented squeeze on their standards of living.

In an attempt to shore up public confidence in the government’s strategy, ministers have been seeking to rebut Donald Trump’s claim that oil is now flowing through the strait of Hormuz at near pre-blockade rates.

Reuters reported last week that the seven-day moving average of the region’s crude oil exports reached 18.5m barrels a day on 1 October. About the same amount was exported before the US-Israeli war with Iran began.

Alireza Zakani, the mayor of Tehran, has announced he is freezing the price of 12 basic items including sugar, rice, oil and detergent for six months. There has been scepticism about how these price controls will be enforced, but he claimed the national government was going to study his plan. Ministers also said a second rise in public sector wages was likely.

“The current healthcare system has shown no regard for the issues and demands of the nursing community.️ Nurses have come to the conclusion that it is more cost-effective and less damaging to their wellbeing to stay home and receive a salary of 25m tomans.”

The front has already written to the government calling for transparency about corruption at a time when people are facing pressure from inflation, high prices and falling living standards.