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ran Prepares “Zero Oil” Budget Scenario to Withstand US Blockade
Iran is preparing its 2027–2028 budget for a scenario in which oil revenues fall to zero, seeking to keep salaries, pensions and essential services funded under US sanctions and blockade.
Mohammad Ghasemi, a senior official at Iran’s Plan and Budget Organization, outlined the approach in remarks published November 9. The Persian year 1406 budget will examine several scenarios, including a complete loss of oil income, rather than assume export earnings will recover.
The financing options include taxes, customs receipts, collecting outstanding debts and issuing debt securities. Oil deposit certificates are also under consideration. These measures would help cover the shortfall, but their inclusion in emergency planning does not establish that Iran can already replace every dollar of lost oil revenue.
Spending would follow a strict order, with public wages, pensions and debt repayments taking priority. Other expenditure would depend on available funds, while infrastructure money would concentrate on projects that can actually be completed and put to use.
Domestic production is central to the approach because Iran supplies many of its own needs and pays a substantial share of its costs in rials. Keeping businesses running protects jobs, goods supplies and tax receipts. The government therefore intends to avoid excessive tax pressure on war-damaged petrochemical and steel businesses, as well as struggling tourism firms.
Ghasemi said the government had so far avoided direct central bank borrowing for the general budget. That claim has a narrower scope than a blanket rejection of monetary support, since he also acknowledged central bank assistance to smooth payments under the household voucher program.
Officials are seeking funding to increase electronic grocery-voucher support for roughly 45M low-income people and raise wage earners’ tax exemptions. Proposed reforms to energy use and wheat, flour and bread distribution aim to reduce waste and smuggling while protecting household access to essentials.
The objective is to make an oil cutoff less effective at disrupting everyday government functions. If Iran can fund essential payments while preserving domestic production, Washington’s ability to turn lost export earnings into shuttered businesses and unpaid wages would weaken. That depends on securing replacement revenue and containing inflation.
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