Iran state oil company’s bank accounts reportedly frozen over debt

The National Iranian Oil Company’s bank accounts have been frozen by a state-owned lender over mounting debt, the semi-official Fars news agency reports, underscoring the strain being felt by the country’s most important source of revenue.

The Bank of Industry and Mine does not provide details on the amount owed or the accounts affected, according to Fars, which adds that the move came despite provisions in Iran’s budget law that deferred repayment of certain NIOC debts until the end of the Iranian calendar year in March 2027.

Separately, the head of the National Development Fund (NDF) says NIOC will not be able to repay the fund a nearly $17 billion debt using proceeds from the Azadegan oilfield, one of the country’s largest, as its development has been slowed by bureaucratic delays and administrative obstacles.

“The repayment of NIOC’s debt via this route (Azadegan) won’t work… There was hope for payment of debts via moves such as the cession of other oilfields but there is leniency and postponing due to the current conditions,” Mehdi Ghazanfari is quoted as saying by the semi-official Borna news agency.

“We hope that with the end of the war and a return to normal, this issue will be solved,” he says, referring to the US-Israeli war with Iran.

The developments highlight mounting financial strains on NIOC as sanctions, years of underinvestment and reliance on domestic financing have increased pressure on its balance sheet.

With foreign investors largely absent from the country’s energy sector due to US sanctions, NIOC has increasingly relied on domestic institutions, including the NDF, to finance field development. This has turned the NDF, which was intended as a sovereign wealth fund, into a source of project financing and left the oil company with mounting debts.