Iran’s oil minister Mohsen Paknejad has stepped down following reports that an intermediary trust managing overseas oil sales owed the state nearly $2 billion in revenues. President Masoud Pezeshkian accepted the resignation, which Paknejad attributed to personal reasons.
The departure occurs as Iran navigates an acute economic downturn characterized by inflation at 85% and dramatic currency depreciation. The rial has fallen more than 10% in the past month and reached record lows against the dollar, trading at 269,000 tomans this week. The currency decline stems largely from a US naval blockade that has severely restricted Iran’s oil exports, a critical source of government revenue and foreign exchange earnings. Economic contraction reached 10% in the first quarter, and professional workers including teachers and nurses are reportedly leaving their positions in large numbers due to salary levels failing to keep pace with cost increases.
An investigation has been launched after reports alleged that trustees awarded oil contracts owe hundreds of millions of dollars each to the state-owned National Iranian Oil Company. Some analysts attribute the reporting to internal power struggles within the oil sector. Officials previously conveyed concerns about the situation to the president and supreme leader before military tensions intensified in February.
Government officials have undertaken various measures to stabilize the economy and restore confidence. Tehran’s mayor announced price freezes on 12 basic goods for six months, while ministers indicated additional public sector wage increases were under consideration. However, skepticism persists regarding enforcement of price controls. Minimum monthly wages currently equate to approximately $66, while food inflation has reached 130%.
Diplomatic prospects remain constrained, as Iranian officials have indicated no plans for additional concessions following rejection of a nuclear negotiation acceleration proposal by Donald Trump. Separately, authorities have continued pressuring reform-minded political figures, summoning opposition leadership to explain public criticisms amid the economic squeeze affecting ordinary citizens.
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