Mohsen Paknejad resigns as Iran oil minister amid economic pressure

Iranian Petroleum Minister Mohsen Paknejad resigned from his post, and President Masoud Pezeshkian accepted his departure on October 5, according to announcements made by the Iranian presidential office. The resignation follows mounting economic pressure, currency depreciation, and allegations that an overseas intermediary trust owed billions in oil export revenues to the state.

Resignation Accepted Amid Economic Pressures

Paknejad gave personal reasons for stepping down after reports surfaced that a trust established during his tenure to recoup overseas oil sales income allegedly owed the state-owned National Iranian Oil Company nearly $2 billion. Seyyed Mehdi Tabatabaei, deputy for communications at the Iranian president’s office, stated to state-run IRIB TV that Paknejad had previously submitted his resignation for personal issues which Pezeshkian initially declined to accept before ultimately accepting it. State television ran an interview with an official from the presidential office confirming the sequence of events and President Pezeshkian’s commendation of Paknejad’s service. The crisis has also prompted emergency government meetings over the weekend to combat the situation, which have yielded little tangible progress.

Leadership Handover at the National Iranian Oil Company

Following the departure, Hamid Bovard, the chief executive officer and deputy petroleum minister heading the National Iranian Oil Company, was appointed as acting Minister of Oil by a presidential decree. The transition occurs as Iran contends with a severe economic downturn driven by a United States naval blockade that has severely restricted crude exports, the mainstay of government revenue. Inflation stands at 85 percent, food inflation has reached 130 percent, and the Iranian rial traded more than 10 percent lower than the previous month, hitting record lows against the dollar. A toman is equal to 10,000 rials, and the minimum monthly wage of 166 million rials is worth about $66. The central bank stated that its role is not to defend a specific rate, but to manage fluctuations.

Parliament Launches Inquiry into Oil Revenue Allegations

The parliament’s energy commission launched an inquiry into the oil revenue allegations following leaks published by the Farhikhtegan newspaper, with some of the leaks potentially reflecting a power struggle inside the oil industry as announced by Reza Sepahvand, a spokesperson for the parliament’s energy commission. Iranian Deputy Foreign Minister for Legal and International Affairs Kazem Gharibabadi stated that the United States had submitted its views through mediators regarding a seven-day proposal presented by Iranian Foreign Minister Seyed Abbas Araghchi in New York to cease hostilities and reopen the Strait of Hormuz. Gharibabadi noted that the U.S. views are currently being reviewed inside the country through appropriate channels, while preparations continue for alternative scenarios. Iran has been using informal networks known as “trustees” to bypass US sanctions and repatriate oil revenues.