Iran's oil minister, Mohsen Paknejad, has resigned amid intensifying economic challenges and allegations of financial mismanagement tied to the country’s oil exports. The resignation, accepted by Iranian president Masoud Pezeshkian, was reportedly submitted for personal reasons but follows reports that an intermediary trust managing overseas oil sales owes nearly $2 billion in revenues to the National Iranian Oil Company (NIOC).
Iran’s economy is under significant strain, with inflation estimated at 85% and the rial experiencing one of its worst devaluations since the 1979 revolution. The currency fell more than 10% against the dollar in the past month, trading at a record high of 269,000 tomans per U.S. dollar. The drop partly reflects the impact of a U.S. naval blockade disrupting Iran’s oil exports, a critical source of state revenue. Iran’s gross domestic product contracted by 10% in the first quarter of 2026, exacerbating financial pressures on public salaries and living standards.
Reports indicate that informal networks, known as “trustees,” have been employed by Iran to circumvent U.S. sanctions and repatriate oil revenues. A recent investigation highlighted that contracts issued to several individual trustees on Paknejad’s watch resulted in large sums owed to the NIOC, prompting parliament’s energy commission to announce an inquiry into the situation. Observers suggest these disclosures may be part of internal power struggles within the oil sector.
The dire economic conditions are prompting widespread concern. Key professional groups such as teachers and nurses are reportedly resigning in large numbers due to wages falling far behind inflation. Mohammad Sharifi Moghaddam, secretary general of the Nurses’ House, emphasized the severity of the crisis for healthcare workers, noting that many find it more sustainable to stay home on fixed salaries than to continue working under the current system.
Iranian officials have dismissed claims by former U.S. President Donald Trump that oil exports through the Strait of Hormuz have resumed to pre-blockade levels, highlighting ongoing difficulties in export volumes. The government convened emergency meetings to address the crisis but has so far produced limited progress. Meanwhile, Tehran’s mayor, Alireza Zakani, announced a price freeze on 12 essential consumer goods for six months, a move viewed with skepticism regarding its potential enforcement and effectiveness. Officials also indicated the possibility of a second public sector wage increase in an attempt to alleviate some financial hardship.
Despite international pressure and mounting domestic economic woes, Iranian diplomats have opted against offering new concessions in nuclear negotiations following the rejection of a rapprochement proposal by the United States last week. The complex interplay of sanctions, economic mismanagement, and political challenges continues to weigh heavily on Iran’s economy and governance.