Sanctions make it riskier and more costly to buy, ship, insure, finance, and pay for Iranian oil—but they have not stopped exports. The key distinction is that barrels shipped and gross sales revenue do not necessarily translate into money Iran can transfer or spend freely. Restricted access to foreign currency can put pressure on the rial and contribute to inflation, alongside domestic policy, oil prices, expectations, and other disruptions.
How do sanctions affect Iran’s oil exports?
U.S. sanctions target parts of the trade and payment chain, not just the oil buyer. Depending on the authority and transaction, foreign buyers, intermediaries, shipping companies, vessels, insurers, financial institutions, and service providers can face sanctions exposure for specified significant dealings involving Iranian petroleum, sanctioned Iranian banks, or the rial. The rules are not a blanket prohibition on every transaction by every foreign person: the actor, conduct, applicable authority, date, and any exception matter.
The Congressional Research Service’s March 2025 brief describes U.S. secondary sanctions as a way to deter foreign actors from taking part in activity that would be prohibited for U.S. persons. It notes authorities covering significant transactions with sanctioned Iranian banks, including the Central Bank of Iran, and transactions involving the purchase, acquisition, sale, transport, or marketing of Iranian petroleum. Country-specific exceptions have applied under defined conditions; CRS says the last approved significant-reduction exception was in 2018. Sanctions are time-sensitive, so check the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) Iran sanctions page and Iran-related FAQs for current rules and designations before assessing a specific transaction.
Exports continue, but are difficult to measure
Sanctions have not eliminated Iranian petroleum exports. CRS reported that exports reportedly reached a record in the first quarter of 2024, with almost all going to China, and remained high into early 2025 despite reported disruptions. These are reported estimates, not a complete count: concealment makes cargoes harder to track. CRS says Iranian petroleum was reportedly sold below prevailing prices to attract traders, particularly smaller, semi-independent Chinese refineries known as “teapots.”
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Reported concealment methods include disguising a cargo’s origin, falsifying tanker location signals, and using older shadow-fleet vessels with difficult-to-trace ownership. OFAC’s April 16, 2025 maritime advisory describes risk indicators and recommends risk-based diligence. In its April 2025 review, OFAC said actions in December 2024 and February–April 2025 had sanctioned 86 individuals and entities across more than 25 countries and identified 85 tankers as blocked property involved in Iranian oil shipments and sales. Those are enforcement figures for the specified periods, not a count of all Iranian tankers or exports. A designation is an enforcement action, not itself proof of a criminal conviction.
How does Iran get paid—and why may the proceeds be hard to use?
Some sanctions exceptions come with conditions on where oil proceeds are held and what they can pay for. OFAC describes circumstances in which proceeds must be credited to an account in the country with primary jurisdiction over the foreign financial institution and may not be repatriated to Iran. Under the relevant exception, the funds must be used for bilateral trade, rather than trade with a third country. The exact restrictions depend on the applicable authority and arrangement; they should not be assumed to govern every payment route.
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This creates a practical difference between a recorded sale and unrestricted foreign exchange. A sale may generate a gross revenue estimate even when its proceeds are held abroad, limited to permitted uses, or difficult to transfer. Transactions with designated banks and specified dealings with the Central Bank of Iran can also expose foreign financial institutions to sanctions. OFAC says certain significant transactions involving the rial—including some derivatives or holdings of rial-denominated accounts outside Iran—can trigger correspondent-account or blocking sanctions exposure. Its FAQs also warn that barter is not automatically outside the rules: certain petroleum-related barter arrangements involving a financial institution, or supporting NIOC, NICO, or the Central Bank of Iran, may be sanctionable.
Gross sales revenue is not accessible reserves
The U.S. Energy Information Administration’s estimates, cited by CRS in March 2025, are gross petroleum sales revenue for the years shown. They do not measure repatriated proceeds, freely accessible hard currency, or net government income.
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Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →| Year | Estimated Iranian petroleum sales revenue | Source and qualification |
|---|---|---|
| 2022 | $54 billion | U.S. Energy Information Administration estimate for 2022, cited by CRS in March 2025; gross sales revenue. |
| 2023 | $53 billion | U.S. Energy Information Administration estimate for 2023, cited by CRS in March 2025; gross sales revenue. |
The reviewed sources do not provide a reliable comprehensive percentage of current oil proceeds that Iran can readily spend in reserve currencies. In May 2026, the U.S. Treasury described exchange houses and foreign front companies as mechanisms used by sanctioned Iranian banks and associated companies to receive funds from overseas oil and petrochemical sales. That is Treasury’s account of networks targeted in its enforcement action; it does not quantify how much revenue reaches Iran or is usable. Treasury Secretary Scott Bessent described the enforcement rationale by saying, “Iran’s shadow banking system facilitates the illicit transfer of funding for terrorist purposes.” This is Treasury’s stated rationale, not an independent measurement of the share of oil proceeds available to Iran.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How can payment restrictions affect the rial and inflation?
Oil exports are an important source of foreign exchange. If sanctions make sales more difficult, lower the realized price, restrict access to proceeds, or impede transfers and international payments, usable foreign currency can be scarcer than gross receipts suggest. That can constrain import payments and the authorities’ ability to supply currency to the market, increasing pressure on the parallel exchange rate or widening gaps between exchange rates. A weaker rial can, in turn, raise the local cost of imported goods and inputs and add to inflation.
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These are transmission channels, not proof that sanctions alone caused a particular exchange-rate move. Fiscal deficits, monetary and exchange-rate policy, oil prices, political uncertainty, expectations, and other disruptions also influence currency and prices. The rial’s official and parallel-market rates are not interchangeable, so a quoted movement needs its market and date.
What historical evidence does—and does not—show
A Congressional Research Service report version from 2021 said the rial’s unofficial-market value fell about 56% between January 2012 and January 2014 amid sanctions. CRS also reported that the rial stabilized after the 2013 interim agreement, then fell sharply amid the prospect and reimposition of U.S. sanctions in 2018. These figures describe those historical periods; they are not a current exchange rate or a universal estimate of sanctions’ effect.
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A 2022 IMF Working Paper by H. Elif Ture and Ali Reza Khazaei analyzed Iranian quarterly data from 2004–2021. Its model identified currency depreciation and fiscal deficits as inflation drivers over short and long horizons, and sanctions—proxied by oil exports—as an inflation driver over both horizons. Its sanctions-removal scenario discusses a possible strengthening of the rial and effects on inflation; it is a model-based result, not a forecast for today.
An IMF staff report from 2014 describes another part of the mechanism: the intensification of international sanctions in 2012 created difficulties accessing international payment systems and making payments in convertible currencies, affecting the liquidity and currency composition of foreign assets. Holding foreign assets, in other words, is not the same as being able to mobilize them for payments.
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