Iran Replaces Oil Minister as U.S. Sanctions Squeeze Exports to Zero

Iran’s oil minister, Mohsen Paknejad, has resigned amid intensifying U.S. sanctions that are severely restricting the country’s crude exports. President Masoud Pezeshkian accepted Paknejad’s resignation on Sunday and appointed Hamid Bovard, the head of the National Iranian Oil Company (NIOC), as acting oil minister. Paknejad reportedly cited personal reasons for his departure, though he had previously requested to step down and was denied.

Bovard takes over as Washington ramps up efforts to eliminate Iran’s remaining oil shipments. U.S. Treasury Secretary Scott Bessent claimed that Iran had no oil shipments at sea and would generate zero revenue this week. Iran’s central bank governor had earlier stated that the country’s oil exports had effectively fallen to zero. Despite this, Paknejad insisted just before his resignation that revenues from previously sold oil were still reaching Iran.

Bovard, who is already under U.S. sanctions, has a long career in Iran’s petroleum sector, having previously led the National Iranian South Oil Company and the Iranian Offshore Oil Company. He now faces the challenge of maintaining production and finding markets for Iranian crude while U.S. sanctions aim to block exports. The sanctions pressure is compounding Iran’s broader financial crisis, with the rial hitting a record low and inflation exceeding 70%.

Domestically, Iran is also grappling with fuel shortages, with a daily gasoline deficit of roughly 10 million liters. The government recently raised gasoline prices above the subsidized quota in response to shortages and long lines at filling stations. Paknejad had led the Oil Ministry since August 2024, leaving Bovard with the task of navigating these economic and operational challenges.