Where has all of the Islamic Republic of Iran’s record crude oil income in the last several years gone? Akbar Torkan, ex-deputy oil minister, released some startling statistics during a recent energy and infrastructure event in Iran that may give us greater insight into this question.
The statistics, which go back to the reign of Mozaffar al-din Shah (1853-1907), reveal that three successive Iranian regimes (the Qajar and Pahlavi dynasties and Islamic Republic) have earned over $1,116 billion from oil income over the course of the last century.* A breakdown of the numbers by period is provided below.**
The overwhelming majority of Iran’s oil income was earned after the Islamic Revolution, with the pre-1979 figure representing only about $140 billion or 12.6 percent. Nearly 50 percent of all of Iran’s oil revenues, $531 billion, has been earned during the administration of president Mahmoud Ahmadinejad. Perhaps the most startling part of Torkan’s revelations was regarding where the Ahmadinejad administration has spent nearly all of this money:
“Statistics show that since 2005 until the end of last year more than $483 billion from oil revenues was spent on imports of commodities from abroad.”
According to Torkan, of this $483 billion figure 17 percent went toward importing capital goods and 83 percent toward intermediate and consumer goods .
The Iranian Student News Agency (ISNA) confirmed this figured with the head of Iranian customs Abbas Memarnejad who said that, while he did not have precise statistics for the last seven years, it was likely that over 80 percent of Iran’s oil export revenue was used to meet the country’s economic and social needs through imports.
Editor’s note: Allegations of corruption and mismanagement have plagued the Islamic Republic since its founding. However, these statistics reveal possible corruption and mismanagement of the Iran’s oil income on a profound scale, even when compared with the Islamic Republic’s own checkered record.
Given intensifying economic sanctions on Iran since 2005, which often make bringing goods into the country more difficult, why have imports increased so dramatically? Furthermore, with the dire state of Iran’s economy, where has this $531 billion gone, and what has been imported with the $483 billion? While this oil income could have been used to dramatically improve infrastructure and the standard of living in Iran, both appear to have declined giving the appearance that this vast oil wealth has been essentially “consumed” out of existence.
*Although Mehr News Agency stated the total oil export revenues over the last 103 years as being $1,116 billion (with no indication whether this figure has been adjusted for inflation), a tally of all of the figures provided for various periods resulted in a total oil export revenue of $1,105 billion, the figure used in the chart above.
**It is unclear if the figures provided by Torkan have been adjusted for inflation.