Iranian gasoline crisis

The Iranian gasoline crisis which refers to the period from December 2024 to June 2025, is a significant Iranian gasoline supply crunch as domestic consumption surges to unprecedented levels while production struggles to keep pace. National gasoline use climbed to around 750,000 barrels per day (approximately 120 million liters per day) in late 2024 - an increase of about 7–8% over the previous year, whereas domestic refining output was roughly 670,000 barrels per day (about 100-105 million liters). This resulted in a daily supply shortfall of around 15-20 million liters (approximately 15-20% of demand), which had to be met through fuel imports or withdrawals from reserves. At times of peak travel (such as public holidays), consumption spiked even higher, exceeding 133 million liters per day and briefly reaching as much as 143 million liters on a single day in early June 2025.

Background

By the end of 2024, Iran's gasoline consumption reached approximately 750,000 barrels per day (around 120 million liters per day), marking a 7–8% year-on-year increase. In contrast, domestic refinery output stood at only 670,000 barrels per day (roughly 100–105 million liters). The resulting deficit of 15–20 million liters per day was covered through imports and withdrawals from national reserves.

Consumption spiked further during national holidays and travel seasons, surpassing 133 million liters per day, with a one-day peak of 143 million liters recorded in early June 2025.

June 2025 fuel panic

Following an Israeli airstrike on Iran's nuclear infrastructure on June 12, 2025, nationwide panic buying ensued. Exceptionally long queues formed at filling stations in Tehran and other cities, described by observers as the worst since the Islamic Republic's founding. The event exposed a lack of contingency planning for large-scale disruptions in fuel supply.

Refining capacity and production

Iran operated ten major refineries during the crisis, with a total crude and condensate processing capacity of 2.2 to 2.4 million barrels per day, yielding approximately 100–105 million liters of gasoline daily at existing efficiency levels.

Expansion projects

Several projects were initiated or continued to address the supply gap:

• The fourth processing unit at the Persian Gulf Star condensate refinery, Iran's largest gasoline producer.
• A 60,000 barrels per day condensate splitter under the Siraf project, slated for completion by early 2026.
• Smaller planned or under-construction facilities included:
  • Alish Refinery (60,000 barrels/day)
  • Mehr Persian Gulf Complex (120,000 barrels/day)

Imports and trade

Despite international sanctions, Iran increased gasoline and diesel imports in late 2024 and early 2025. Estimates suggest that nearly 5 billion liters of fuel were imported during the 2024 fiscal year, almost double the volume from the previous year.

Due to limited access to foreign currency, Iran relied heavily on barter arrangements, trading excess fuel oil (mazut) for refined fuels. Internal reports noted that around 40% of Iran's 290,000 barrels/day mazut exports in 2024 were exchanged for gasoline and diesel, largely via the United Arab Emirates, with the remainder sold to cash buyers in China and other Asian markets.

Fiscal impact

President Masoud Pezeshkian stated that gasoline imports cost the country 90 trillion rials (approximately $1.3 billion) in 2024, with projections of 130 trillion rials (~$1.9 billion) for 2025 if trends persisted.

Fuel smuggling

Iran continued to face widespread fuel smuggling, driven by substantial price disparities with neighboring countries. Gasoline was frequently trafficked into Pakistan and Afghanistan, undermining domestic supply. In early 2025, Iranian authorities undertook anti-smuggling operations, including the seizure of 220,000 liters of illegal fuel in Mashhad, but acknowledged the issue remained unresolved.

Rationing and policy measures

Iran maintained its longstanding fuel pricing and rationing system throughout the crisis. Since 2007, private vehicle owners have received a monthly quota of 60 liters at subsidized rates (~15,000 rials per liter or ~$0.02), with additional purchases available at higher—but still subsidized—prices.

In January 2024, the government quietly reduced the additional quota from 150 liters to 100 liters per month (at ~30,000 rials per liter) to discourage hoarding and smuggling. The base 60-liter allocation remained unchanged.

Avoiding price hikes

Despite the worsening supply gap, Iran's March 2025 budget avoided any increase in official fuel prices, likely due to the memory of nationwide protests sparked by a price hike in November 2019. Instead, policymakers emphasized demand management, including:

• Promoting compressed natural gas (CNG) as an alternative fuel
• Expanding public transport
• Modernizing the aging vehicle fleet

However, the effectiveness of these measures was limited. CNG use declined from 24 million cubic meters/day in 2020 to 18–19 million cubic meters/day in 2024, and public transit infrastructure remained under strain.

Private vehicles remained the primary mode of transport due to ultra-low fuel prices and a fleet dominated by older, inefficient vehicles.

Fuel quality and additives

In an effort to meet demand, Iran increasingly relied on fuel additives and petrochemical derivatives to augment gasoline supply. By late 2024, only 100 million liters/day of gasoline were being produced by refineries; the remaining ~20 million liters/day were derived from blending with additives.

One major additive was methyl tert-butyl ether (MTBE), an oxygenate and octane enhancer banned in several countries due to health and environmental risks. Use of such compounds rose from 5 million liters/day (6% of supply) in 2018 to over 20 million liters/day (20% of supply) in 2024.

Environmental and health concerns

This strategy resulted in a notable decline in fuel quality. Approximately 80% of Iranian gasoline reportedly failed to meet Euro 4 or Euro 5 emissions standards. Even fuel marketed as "Euro-grade" was found to contain MTBE and other additives exceeding international norms.

These practices raised public health and environmental concerns, especially in major cities experiencing chronic air pollution.

The gasoline shortage following the Israeli attack

On June 13, 2025, following the Israeli airstrike on the Iranian nuclear program, long queues formed at gasoline stations across Tehran, particularly in upscale and central districts such as Pasdaran. Residents rushed to fuel up amid uncertainty and anxiety after the strikes and audible explosions in the capital. Images and videos circulated showing tightly packed lines of cars waiting at pumps in Tehran's Pasdaran neighborhood.

Despite the scenes of congestion, officials from the National Iranian Oil Refining & Distribution Company publicly stated that there was no actual shortage, affirming that both refining operations and fuel distribution fleets were operating "without interruption". Persian-language outlets, such as Eghtesad News, Khabar Online, and Fararu, reported that while panic buying caused the queues, the underlying fuel supply infrastructure remained stable.

See also

• Iranian energy crisis
• Oil smuggling in Iran