Iran Is Selling More Oil but Making Less Money

In an unusual twist for one of the world’s largest oil-producing nations, Iran is exporting more crude oil than it has in years — yet its oil revenues are falling instead of rising. At first glance, this seems contradictory: how can selling more of a valuable commodity generate less money? The answer lies in a complex combination of sanctions, market dynamics, discount sales, and geopolitical realities.
Despite reports that Iran’s oil exports — particularly to China — have reached levels not seen since before the 2010s, the country is earning far less than expected. This economic paradox reflects how the global energy market can work against even the biggest oil producers under certain conditions.
How Iran Is Increasing Oil Exports
In 2025, Iran saw a significant increase in oil exports. Analysts report that shipments climbed back toward levels not seen in nearly a decade, largely by relying on covert shipping networks and intermediaries. These methods allow Iran to bypass some international sanctions and keep crude flowing to buyers.
Most of this oil is shipped to China, often through informal channels that involve turning off tracking systems, transferring oil ship-to-ship, and using private buyers outside of formal markets. This “shadow fleet” allows Iran to maintain export volumes even when official sales are restricted.
Despite these logistical challenges, Iran now exports millions of barrels per day, compared with much lower figures during periods of tight sanctions in the early 2020s.
Why Exporting More Oil Doesn’t Mean More Revenue
Selling more oil would normally mean more revenue, but several factors are keeping profits low for Iran:
1. Deep Discounts on Iranian Crude
Because Iran cannot rely on official export channels, it is forced to sell oil at steep discounts. Chinese buyers, for example, often purchase Iranian barrels $6–$10 below global market prices. While this keeps exports flowing, it significantly reduces profits.
2. Extra Costs Due to Sanctions
Operating outside legal channels comes with high costs. Moving oil covertly involves additional expenses for logistics, insurance, and intermediary services. These “shadow market” costs cut into Iran’s earnings, meaning more exports don’t translate into more cash.
3. Falling Global Oil Prices
Global crude prices dropped in late 2025 and early 2026 due to oversupply and lower demand. When world prices fall, countries like Iran — already selling at discounts — suffer even more, further reducing revenue.
4. Currency Devaluation
Iran’s domestic currency, the rial, has continued to weaken. When oil earnings are converted into local currency, the value received is much lower than expected. Combined with high inflation, this leaves the government and citizens with less real purchasing power.
China’s Role in Iran’s Oil Paradox
China has become Iran’s largest and most important oil buyer. Roughly 80–90% of Iranian exports are destined for Chinese refineries, many operating outside official global channels.
While this relationship keeps Iran’s oil flowing, it also creates a reliance on a single major customer. China benefits from discounted oil, while Iran earns less revenue and has less bargaining power. Meanwhile, competition from other discounted producers like Russia further depresses prices, exacerbating the revenue shortfall.
The Economic Impact on Iran
Despite higher exports, the lack of revenue growth has serious consequences for Iran’s economy:
Government budget shortfalls, since oil revenue makes up a large portion of public spending
Inflation and a weak currency, reducing purchasing power for ordinary citizens
Rising public dissatisfaction, with protests and economic grievances surfacing due to stagnant income and reduced services
The paradox of more exports but less income highlights how sanctions, global market conditions, and domestic economic challenges interact in complex ways.
Sanctions and the Shadow Fleet
The reason behind Iran’s low profits is deeply tied to international sanctions. These sanctions, particularly those reimposed after the U.S. exited the 2015 nuclear deal, prevent Iran from selling oil through conventional banking and trading channels.
To bypass restrictions, Iran relies on a shadow fleet, including covert tankers and private intermediaries. While this keeps oil flowing, it comes at a high cost and keeps Iran outside mainstream markets, preventing the country from earning full market value.
In short, Iran is trading profitability for survival, ensuring exports continue while accepting lower revenue.
Can Iran Turn This Around?
Experts disagree on whether Iran can reverse this trend. Potential solutions include:
Sanctions relief or renewed diplomatic agreements, which could allow Iran to access legitimate markets and sell oil at full price
Diversifying export markets, reducing dependence on China
Investing in domestic infrastructure, improving efficiency and reducing costs for shipping and production
However, geopolitical uncertainty, competition from other producers, and internal economic challenges make a full recovery uncertain.
Final Thoughts
Iran’s oil industry demonstrates that more isn’t always better. Selling higher volumes does not guarantee higher profits, especially when sanctions, discounts, and global market forces are in play.
The country’s paradox — exporting more oil but making less money — highlights the delicate balance between geopolitics, economics, and global energy markets. While oil remains Iran’s most important economic asset, the combination of sanctions, low prices, and extra costs continues to challenge the government and citizens alike.
For the international community, this situation is a reminder that market access and pricing power are just as important as production volumes. For Iran, it’s a tough lesson in how exporting more can sometimes mean earning less.