Iran’s economy continues to grow despite a 91% drop in oil revenues

Iran’s economy continues to grow despite a 91% drop in oil revenues

Sanctions re-imposed by the US on Iran’s oil exports from 2018-2020 have reduced Iran’s oil revenue by 91%, losing $98.6 billion in revenue.

The Iranian government has successfully run an economy with no oil revenues. Photo: IntelIINews

The US administration under President Donald Trump’s withdrawal from the 2015 Iran nuclear deal in May 2018 has severely affected Iran’s banking and oil sectors. The US wants to reduce Iran’s crude oil exports to zero and limit Tehran’s access to export revenues.

Although Iran’s oil exports have never fallen to zero, Iranian officials have faced growing pressure to sell and ship oil to the external market. As a result, Tehran has tried to make up for lost foreign exchange earnings through the export of petroleum and petrochemical products. This is considered a successful plan by Tehran.

According to a recent report submitted by Iran’s Foreign Ministry to the National Assembly, the all-out economic war has reduced Iran’s oil revenues by about $98.6 billion between 2018 and 2020. The so-called “maximum pressure” is weighing heavily on the Iranian economy, and the country cannot access its oil revenues at banks in other countries, including South Korea and Iraq (I – sprinkle). So Iran has come under increasing pressure as the COVID-19 pandemic broke out and Tehran is unable to buy medical equipment and medicines.

The impact of the COVID-19 pandemic, the sharp decline in oil revenues and the unstable situation of the world economy have pushed the Iranian economy into a very difficult situation. Iran’s oil revenue in 2020 has recorded its lowest level in 20 years. Besides, the fact that oil prices fell below 20 USD/barrel in the spring of 2020 and failed to reach above 70 USD/barrel at the end of last year also affected the oil revenue of this Middle Eastern country.

The sharp drop in oil revenue caused Iran’s economy to shrink by 7.4% in the first quarter of 2019. However, Iran’s economy has seen a very positive improvement when it reached 2.5% growth in 2020, even though the country has no oil revenue. Meanwhile, the world economy shrank 4% last year. Iran has exported petroleum products, including gasoline, not only to West Asia but also to all over the world and especially to the South American market.