Iran's Revolutionary Guards Extend Control over Tehran's Oil Exports

Iran's Revolutionary Guards have tightened their grip on the country's oil industry and control up to half the exports that generate most of Tehran's revenue and fund its proxies across the Middle East, according to Western officials, security sources and Iranian insiders.

All aspects of the oil business have come under the growing influence of the Guards, from the shadow fleet of tankers that secretively ship sanctioned crude, to logistics and the front companies selling the oil, mostly to China, according to more than a dozen people interviewed by Reuters.
The extent of the Iranian Revolutionary Guard Corps' (IRGC) control over oil exports has not previously been reported.

Despite tough Western sanctions designed to choke Iran's energy industry, reimposed by former US President Donald Trump in 2018, Iran generates more than $50 billion a year in oil revenue, by far its largest source of foreign currency and its principal connection to the global economy.

Six specialists - Western officials and security experts as well as Iranian and trading sources - said the Guards control up to 50% of Iran's oil exports, a sharp increase from about 20% three years ago. The sources declined to be identified due to the sensitivity of the matter.

Three of the estimates were based on intelligence documents about Iranian shipping while others derived their figures from monitoring shipping activity by tankers and companies linked to the IRGC. Reuters was unable to determine the exact extent of the IRGC's control.

The IRGC's growing domination of the oil industry adds to its influence in all areas of Iran's economy and also makes it harder for Western sanctions to hit home - given the Guards are already designated as a terrorist organization by Washington.

Trump's return to the White House in January, however, could mean tougher enforcement of sanctions on Iran's oil industry. The country's oil minister said Tehran is putting measures in place to deal with any restrictions, without giving details.

As part of their expansion in the industry, the Guards have muscled in on the territory of state institutions such as the National Iranian Oil Company (NIOC) and its NICO oil trading subsidiary, according to four of the sources.

When sanctions hit Iran's oil exports years ago, the people running NIOC and the wider industry were specialized in oil rather than how to evade sanctions, added Richard Nephew, a former deputy special envoy for Iran at the US State Department.

"The IRGC guys were much, much better at smuggling, just terrible at oil field management, so they began to get a larger control of oil exports," said Nephew, who is now a researcher at Columbia University.
The IRGC, NIOC, NICO and Iran's foreign ministry did not respond to requests for comment.
RISK APPETITE
The IRGC is a powerful political, military and economic force with close ties to Supreme Leader Ali Khamenei.
The Guards exert influence in the Middle East through their overseas operations arm, the Quds Force, by providing money, weapons, technology and training to allies Hezbollah in Lebanon, Hamas in Gaza, Yemen's Houthis and militias in Iraq.
While Israel has killed a number of senior IRGC commanders over the past year, the oil specialists in its ranks have been able to continue their operations, two Western and two Iranian sources said.
The Iranian government began allotting oil, instead of cash, to the IRGC and Quds Force around 2013, according to Nephew.
The government was under budgetary pressure then because it was struggling to export oil due to Western sanctions imposed over Iran's nuclear program.
The IRGC proved adept at finding ways to sell oil even under sanctions pressure, said Nephew, who was actively involved in tracking Iranian oil activities then.
Iranian oil revenues hit $53 billion in 2023 compared with $54 billion in 2022, $37 billion in 2021 and $16 billion in 2020, according to estimates from the US government's Energy Information Administration.
This year, Tehran's oil output has topped 3.3 million barrels per day, the highest since 2018, according to OPEC figures, despite the Western sanctions.
China is Iran's biggest buyer of oil, with most going to independent refineries, and the IRGC has created front companies to facilitate trade with buyers there, all the sources said.
Oil export revenues are split roughly evenly between the IRGC and NICO, said one source involved in Iranian oil sales to China. The IRGC sells oil at a $1-$2 barrel discount to prices offered by NICO because buyers take a bigger risk buying from the Guards, the person said.
"It depends on a buyer's risk appetite, the higher ones will go for the IRGC, which the US designates as a terrorist group."
Two Western sources estimated that the IRGC offered an even bigger discount, saying it was $5 per barrel on average but could be as much as $8.
The oil is allocated directly by the government to the IRGC and Quds Force. It's then up to them to market and ship the oil - and work out a mechanism for disbursing the revenue, according to the sources and intelligence documents seen by Reuters.
NIOC gets a separate allocation.
CHINESE FRONT
One of the front companies used is China-based Haokun. Operated by former Chinese military officials, it remains an active conduit for IRGC oil sales into China, despite Washington hitting it with sanctions in 2022, two of the sources said.
The US Treasury said China Haokun Energy had bought millions of barrels of oil from the IRGC-Quds Force and was sanctioned for having "materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the IRGC-QF".
In one oil transaction dated March 16, 2021 involving Haokun and parties including Turkish company Baslam Nakliyat - which is under US sanctions for its trading links to the IRGC - a payment was processed via US bank JP Morgan and Turkish lender Vakif Katilim, according to the intelligence documents.
The transaction took place before the companies were sanctioned. Reuters has no indication JP Morgan or Vakif Katilim were aware of the Iranian connection - highlighting the risks of companies getting inadvertently caught up in the shadow trade.
JP Morgan declined to comment. Vakif Katilim said in a statement: "Our bank performs its activities within the framework of national and international banking rules."
Haokun declined to comment. Baslam did not respond to a request for comment.
'GHOST FLEET'
Quds Force commander Qassem Soleimani, who was killed in a US strike in Baghdad in 2020, had set up a clandestine headquarters and inaugurated that year for the unit's oil smuggling activities, initially staffed by former oil minister Rostam Ghasemi, according to the intelligence documents.
Reuters could not determine where all the oil money funneled through the IRGC goes. The IRGC headquarters and day-to-day operations has an annual budget of around $1 billion, according to assessments from two security sources tracking IRGC activities.
They estimated that the IRGC budget for Hezbollah was another $700 million a year.
"Exact figures remain undisclosed, as Hezbollah conceals the funds it receives. However, estimates are that its annual budget is approximately $700 million to $1 billion. Around 70%-80% of this funding comes directly from Iran," Shlomit Wagman, former director general of Israel’s Money Laundering and Terrorism Financing Prohibition Authority, said separately.
Hezbollah did not respond to a request for comment.
The former Secretary General of Hezbollah, Hassan Nasrallah, who was killed in an Israeli airstrike, said Iran provided the group's budget, including for salaries and weapons.
Iran's main tanker operator NITC, which previously played a key role in exports, also now provides services to the IRGC.
It executes ship-to-ship transfers of Iranian oil onto vessels operated by the IRGC to ship crude into China, according to sources and ship-tracking data. Such transfers are common practice to help disguise the origin of the oil tankers carry.
NITC did not respond to a request for comment.
In August, Israel's National Bureau for Counter Terror Financing, part of the country's defense ministry, imposed sanctions on 18 tankers it said were involved in transporting oil belonging to the Quds Force.
In October, the US Treasury slapped sanctions on 17 separate tankers it said formed part of Iran's "ghost fleet", outside of NITC vessels. It followed up with sanctions on a further 18 tankers on Dec. 3.

Visitors to Damascus today can’t miss the city’s busy, fast-paced rhythm. Traffic jams clog the main entrances, intersections, and markets, while schoolchildren dart around their parents, backpacks in hand, at the end of the school day. These scenes bring a sense of normalcy, showing that daily life continues despite the challenges.

Cars with license plates from across Syria—Raqqa, Homs, and Idlib—mix with Damascus vehicles at intersections and working traffic lights. “This is new for us,” said a local. “We didn't see cars from these areas before.”

Amid the congestion, as drivers jostled for space, the man joked: “An Idlib plate now means ‘government car’—we’d better make way.”

With traffic police largely absent, a few members of Hayat Tahrir al-Sham have stepped in at key intersections to direct the flow. Still, residents seem to manage on their own, relying on self-organization.

As night fell, parks, cafes, and the bustling Shaalan Street in Damascus filled with families and young people. Crowds moved between juice stands, sandwich shops, and shisha cafes, many with foreign or English-inspired names.

The famed adaptability of locals is evident in small but significant changes. People quickly adjusted to using foreign and Arab currencies, garbage collection resumed swiftly, and even rules for non-Syrians buying SIM cards were amended.

Previously, foreigners had to register with an entry stamp and local address. Now, with Syrian border controls relaxed and monitoring left to the Lebanese side, new measures ensure SIM cards remain traceable without complicating the process.

The “revolution flag” now covers private cars, taxis, and shop entrances in Damascus. Many stores are offering discounts on clothing and shoes to celebrate “victory,” while street vendors eagerly sell the new flag, urging people to buy it with cheers and congratulations.

It’s unclear who genuinely supports the change and who is simply going along to stay safe, especially among small business owners. What is certain, however, is that public spaces have moved on.

From the Lebanese border to the heart of Damascus, slogans praising Assad and the “eternity” he symbolized have been wiped away.

Posters and billboards have appeared across Damascus, especially in Umayyad Square, with messages like “Syria is for all Syrians” and “Time to build a better future.” The slogans call for unity and a shared future for all citizens.

It’s unclear if this is part of an organized campaign by Hayat Tahrir al-Sham or just political improvisation.

Umayyad Square, now a “revolutionary site,” draws crowds day and night, eager to take photos near the historic monument and the abandoned statue of Hafez al-Assad. The scene speaks volumes about untold stories.

Once a key landmark of Damascus, the square is now Syria’s gateway to the world. Syrians from inside and outside the country flood social media with joyful images, while journalists and TV teams from around the globe report in multiple languages.

The atmosphere feels like the opening of “Pandora’s Box,” revealing both the good and the bad.

Journalists in the square, whom you later find in small local restaurants and hotel lobbies, bring to mind post-2003 Baghdad—another capital at a historic turning point, filled with people and emotions.

Like Baghdad, hotel lobbies here are full of contradictions, with journalists playing just a small role.

In these grand spaces, diplomats, UN staff, and translators sit alongside businessmen and contractors eager to capitalize on economic opportunities. While Damascus itself hasn't changed much, its need for basic services, especially electricity, is huge. Entire neighborhoods have been destroyed, with forced displacement, hunger, and fear almost touching the city's hotels and restaurants.

In these hotels, which have become a microcosm of Syrian society, Damascenes are meeting for the first time faction leaders and fighters from the north. Many of them, due to their circumstances, had never seen the capital or entered a hotel.

Their sense of victory is clear, but so is the confusion in their eyes and actions. For example, one might hesitate in an elevator, unsure whether to step out or stay, then greet you politely while avoiding eye contact.

In their military uniforms, with visible weapons and long beards, the fighters stand out in these historic hotels, with their elegant decor and refined staff.

This contrasts sharply with the ordinary Damascenes who visit hotel cafes and restaurants simply for peace and privacy. The fighters bridge the gap with their serious, guarded demeanor, though it softens with a joke from a friend.

Locals feel their “bubble” has burst, and their way of life has changed forever. Yet, most agree that nothing will be worse or last longer than what they’ve already experienced.

Iran's Revolutionary Guards Extend Control over Tehran's Oil Exports