In Iran, China’s Defense Minister Calls For Global Effort To Thwart US

Speaking to Shargh newspaper, Spokesman of the Customs Organization Ruhollah Latifi said Iran's daily gasoline exports averaged 5.3 million liters in the previous Iranian calendar year. Annual revenues from selling gasoline amounted to $732.6 million, around 38 cents per liter, he said, referring to the Iranian calendar year which ended on March 20.

In 2021, according to OPEC figures, crude oil sold for around $78 per barrel which puts the price of one liter of crude at around 49 cents, higher than the price of gasoline, Shargh's Maryam Shokrani wrote.

Latifi told Shargh that nearly half of all gasoline exports -- at around 39 cents and a total of $244.6 million -- were made in the last month of the year (February 20 to March 20). These figures show that despite the spike in international prices of crude oil and gasoline in March, Iran's gasoline sold at the same rate as before.

Mostafa Nakhaei, spokesman of the parliament's energy committee also told Shargh that the parliament had received reports that in the one-year period from March 21, 2020, gasoline had sometimes been exported at prices as low as 5,000 rials, one-third of its subsidized domestic price – an incredible two US cents per liter or around 10 cents a gallon. ($1=280,000 rials)

Why so cheap?

Bulk gasoline prices in the Persian Gulf region were above 80 cents a liter in this period.

Unlike crude oil, gasoline exports are not sanctioned by the United States, and it is not clear why Iran sold the refined product so much cheaper than international prices.

One explanation can be the desperate need for cash dollars as international banking transfers are out of question amid American banking sanctions. It could also be due to shadowy middlemen and networks handling most of Iran’s fuel exports who take substantial cuts and reduce government revenues. Some of these middlemen are people well connected with top officials, as previous scandals from early 2010s revealed.

As the news emerged on Wednesday some Iranians began commenting on social media that in 2019 the government suppressed protests to a hike in fuel prices by killing hundreds of people while it is ready to export gasoline at two cents a liter.

Nakhaei said that some lawmakers have demanded a probe into the export of gasoline at such low prices and the loss the oil and refinery industries have incurred because of that. "Apparently the government only endeavored to raise the gasoline export figures at any cost," he said.

More oil exports with no visible impact

Officials of the government of President Ebrahim Raisi have repeatedly boasted that they have succeeded in raising oil exports by as much as 40 percent despite sanctions imposed by the US in 2018 when Donald Trump pulled the US out of the 2015 nuclear deal with Iran. They also claim that they are now even fully repatriating the revenues from oil sales.

Many Iranians ask why they can see no change in economic indices despite increased oil exports and repatriation of revenues as the government claims, especially with very high fuel prices since the invasion of Ukraine.

An informed source in oil ministry on Tuesday told the government mouthpiece, Iran newspaper, that the reason for not being able to experience any prompt effect of the money coming into government coffers from oil sales was that it takes 90 days to receive the payments from buyers.

But the government claim about higher oil exports goes back to all of 2021, not just the last three months.

Mohammed al-Halbousi, who arrived in Tehran at the head of a parliamentary delegation Wednesday, said the country’s Prime Minister Mustafa Al-Kadhimi had attended the latest round of talks between Tehran and Riyadh, which was held in the in Baghdad last week. Al-Halbousi made the remarks in a joint press conference after meeting with his Iranian counterpart Mohammad-Bagher Ghalibaf.

“We see negotiation and understanding as the solution to problems between neighbors,” al-Halbousi said. “Many problems require dialogue and consultation”. Diplomatic relations between Sunni Muslim-ruled Saudi Arabia and predominantly Shiite Iran were broken off in 2016, with the two supporting opposing sides in conflicts in both Syria and Yemen.

During his one-day visit, al-Halbousi was also scheduled to meet with President Ebrahim Raisi, Secretary of the Supreme National Security Council Ali Shamkhani, and Foreign Minister Hossein Amir-Abdollahian.

Halbousi's visit to Iran − his second since 2018 when he assumed office − took place as factional discussions continue over forming a new Iraqi government several months after parliamentary elections. Halbousi’s Sunni alliance is part of a parliamentary bloc in which it is allied with Muqtada Sadr’s Shiite party and the Kurdistan Democratic Party, but the process of forming a government is hindered by the complexities of sectarian arrangements and opposition from the Patriotic Union of Kurdistan and Shia parties close to Tehran.

In a meeting with a group of university students and representatives of student associations in Tehran on Tuesday, Khamenei said the world is on the threshold of a new global order that will replace the “monopolar and bipolar world”.

“Today, the world is on the eve of a new international order that has been in the making following the era of a global bipolar order and the theory of a unipolar world order, during which America has been becoming weaker day by day,” Khamenei said.

He added that “The events of the recent war in Ukraine must be viewed more deeply and in the context of the formation of a new world order which will probably be followed by complex and difficult processes”.

In such a new and complex situation, all countries, including the Islamic Republic, have a duty to be active in both soft and hard power to ensure their interests and security and avoid isolation, Khamenei noted.

During his speech, he didn't refer to the negotiations to restore the 2015 nuclear accord, but some in Tehran speculate that the Russian invasion of Ukraine will eventually force Washington to agree to Tehran's demands and make a deal.

In a sign of developing military cooperation, Iran, Russia, and China held naval drills in January in the north Indian Ocean. These were the third such trilateral naval exercises since the first was held in late 2019 and announced as the formation of Marine Security Belt. The 2022 Marine Security Belt exercise covered 17,000 square kilometers and included the navies both of Iran’s Army and its Revolutionary Guards Corps (IRGC).

China’s military role in the region is less than its expanding commercial presence. Chinese trade with Saudi Arabia in 2020 topped $65 billion, and with the United Arab Emirates was around $60 billion.

While Iran-China trade fell back to around $15 billion in 2021 after reaching around $50 billion in 2014, the head of the Tehran-Beijing chamber of commerce, Majid-Reza Hariri, has suggested that the lifting of United States’ sanctions could see it reach $60 billion. Hariri said establishing Iranian representative offices in China was a work in progress.

Zabihollah Khodaeian, the judiciary spokesman, told reporters Tuesday that Ahmad Hashemi-Shahroudi was also liable for "returning the funds" in the case involving Sarmayeh Bank. But some media have claimed Hashemi-Shahroudi fled to Iraq when a business partner, Mohammad Emami, was arrested in 2016. Emami has been sentenced to a 20-year prison term, according to Khodaeian.

Another defendant in the case, Shahabeddin Ghandali, former chief executive officer of the Iran Teachers’ Reserve Fund, was arrested in 2016 on charges of embezzling $2.5 billion. The fund, which has 800,000 members and is run by the education ministry, was an investor in Sarmayeh Bank.

According to a confidential report of the Iranian parliament leaked by reformist lawmaker Mahmoud Sadeghi in December 2020, Hashemi-Shahroudi and Emami took loans from Sarmayeh between 2012 and 2014 to invest in property. They subsequently sold the properties to Sarmayeh at far higher prices, with the bank − according to the report − waiving penalties for late repayment.

The fund lost nearly $3.5 billion of its investments in Sarmayeh Bank as a result of fraud perpetrated by, according to judicial officials, over 400 individuals.

Parviz Kazemi, minister of labor and social welfare under President Mahmoud Ahmadinejad's cabinet, Ammar Salehi, son of army commander Ataollah Salehi, and Hadi Razavi, son-in-law of Mohammad Shariatmadari, minister of labor in Hassan Rouhani's cabinet, were among defendants in the case.

Corruption and cronyism, often associated with political figures and groups, has plagued Iran for over a decade. There have been several massive fraud and embezzlement cases since then, including in major banks and other financial institutions.

In 2017 and 2018 corruption in the financial sector and rising prices sparked the biggest wave of anti-government protests since the unrest over a disputed election in 2009.

In October 2020, Spain extradited Sarmayeh’s former chief executive officer (CEO), Alireza Heydar-Abadipour, who had been arrested in 2019 following a "red notice" to Interpol issued by Iranian police. Heydar-Abadipour had been sentenced in absentia to a 12-year prison sentence for fraud and embezzlement.

Lacking an extradition agreement with Canada, Iran was unable to pursue Mahmoud-Reza Khavari, the former CEO of the state-owned Melli Bank, who fled to Canada in 2010, after being accused of embezzling billions of dollars.

In 2017 and 2018, protesters who lost their deposits in the Samen al-Hojaj Finance and Credit Institution in Khorasan province held rallies in front of banks and other financial institutions. Samen al-Hojaj, which went into liquidation, had lent tens of millions of dollars at a very low interest rate and paid high salaries to some officials, while not paying dividends to small investors lured with promises of high returns.