Iran oil minister resigns amid fuel shortages and crude export pressure

Iranian Oil Minister Mohsen Paknejad has resigned due to personal reasons, with Hamid Bovard, chief executive of the state-run National Iranian Oil Company, appointed as acting minister. Paknejad served in the role since August 2024 and insisted on leaving. President Masoud Pezeshkian accepted the resignation on Sunday, naming Bovard in his place. Bovard, 62, has led the NIOC since 2024 and previously managed other oil companies in Iran. He will oversee the ministry while the government decides on a permanent replacement.

Iran's energy industry faces intense pressure from a US naval blockade, causing exports to plummet to zero, according to the central bank chief. Paknejad resigned amid fuel shortages and crude export pressure. The change comes less than a month after Iran raised petrol prices for motorists exceeding their subsidized monthly allocation. The government implemented the measure to address a daily petrol deficit of about 10 million litres, following shortages and long queues at petrol stations.

The price increase, effective September 7, doubled the rate for petrol above the 110-litre quota, with the first 110 litres priced at 15,000 rials and the remaining litres at 30,000 rials. Iran continues to subsidize the first 110 litres purchased each month. Fuel consumption has surpassed domestic refining capacity, increasing the country's reliance on imports.

Despite Paknejad's resignation, the government maintains that revenue from oil already sold continues to reach Iran. In August, Paknejad reported that Iran had lost about 95 million cubic metres of gas production due to infrastructure damage caused by the war with the US.