Iran Faces Severe Fuel Crisis Amid New U.S. Sanctions

The Government of Iran is facing a severe nationwide fuel crisis characterized by widespread gasoline and diesel shortages. Motorists are reporting hours-long queues and sleeping in their vehicles to secure fuel, while filling stations in Karaj have limited individual purchases to five liters. The crisis stems from a daily gasoline deficit of approximately 15 million liters, worsened by war damage to infrastructure, import constraints, and a new round of economic sanctions and a tightened blockade imposed by the United States.

Public distrust has intensified following reports of deteriorating fuel quality. The Persian Gulf Star Oil Company began testing methanol as an oxygenate in domestic gasoline, and a water contamination incident was confirmed at a filling station in Rafsanjan. In Tehran and Rey, residents have reported vehicle damage attributed to poor fuel quality, leading to protests by motorists.

While Iranian authorities argue that fuel subsidies encourage smuggling and create financial instability, economists suggest the shortages may be a strategy to prepare the public for price increases. The government faces a significant political risk, as similar price hikes in 2019 triggered deadly nationwide protests. Meanwhile, the National Iranian Oil Company continues to struggle with tens of billions of euros in debt to commercial and central banks.