Iran oil minister Mohsen Paknejad resigns amid 85% inflation

Iran’s oil minister, Mohsen Paknejad, resigned on 5 October 2026, days after allegations that an intermediary trust selling Iranian oil abroad owed millions of dollars’ worth of export receipts to the state, Theguardian reported. President Masoud Pezeshkian said he accepted the resignation, which Paknejad attributed to personal reasons.

The departure lands as Iran confronts severe economic strain. Inflation is running at 85%, oil receipts have dropped sharply, and the rial is trading more than 10% lower than a month ago — one of the largest declines in the currency’s value since the 1979 revolution. The dollar traded at 269,000 tomans this week, a record high, and has risen 12% since 9 September.

Also read: Eurozone inflation jumps to 3.8%, highest since 2023

Key facts

• Mohsen Paknejad resigned as Iran’s oil minister on 5 October 2026; President Masoud Pezeshkian accepted the resignation.
• Iran’s inflation rate stands at 85%, with food inflation at 130%.
• The rial has fallen more than 10% in a month; the dollar hit a record 269,000 tomans, up 12% since 9 September.
• A Farhikhtegan newspaper report alleged a trust set up under Paknejad owed the National Iranian Oil Company nearly $2bn in revenue.
• Iran’s economy contracted by 10% in the first three months of the year.

The trust system and the missing receipts

Iran has used informal networks known as “trustees” to move oil revenues around US sanctions. According to Theguardian, a report last week by the Farhikhtegan newspaper alleged that a trust established while Paknejad was in post to recover income from overseas oil sales owed the state-owned National Iranian Oil Company close to $2bn (£1.5bn). Three individual trustees awarded oil contracts are each alleged to owe hundreds of millions of dollars.

Reza Sepahvand, a spokesperson for the parliament’s energy commission, announced an inquiry. Some of the leaks behind the reporting may reflect a power struggle within the oil sector. Regardless of the cause, the allegations do little to shore up confidence in a government presiding over what the report describes as an unprecedented squeeze on living standards.

Also read: Crude Oil Hits One-Month High as Trump Threatens Iran, Dimming Hormuz Reopening Hopes

The problems were reportedly treated as serious enough to be passed by a security official to the president and, before the US attack on Iran in February, to the supreme leader. Pezeshkian apparently raised the complaint with the oil minister without receiving a satisfactory response.

Why it matters

Iran’s oil export difficulties stem primarily from a US naval blockade on its oil exports, which has produced a large shortfall in foreign exchange earnings. That shortfall feeds directly into the rial’s slide and into price pressures that are reshaping daily life — teachers and nurses are reported to be resigning in large numbers because pay is not keeping up with rising prices. The minimum monthly wage of 166m rials is worth about $66.

Tehran’s mayor, Alireza Zakani, has announced he is freezing the price of 12 basic goods — including sugar, rice, oil and detergent — for six months. There has been scepticism about enforcement, though he said the national government would study the plan. Ministers also indicated a second public sector wage rise is likely.

Mohammad Sharifi Moghaddam, secretary general of the Nurses’ House organisation, said nurses had pursued every legal and professional avenue to press their demands, and had concluded it was less damaging to stay home on a salary of 25m tomans. Meanwhile, the Reform Front’s leadership was summoned by the ministry of intelligence over criticisms it made during the protest crackdown.

What to watch

Attention now turns to the parliamentary energy commission inquiry announced by Reza Sepahvand, and to whether Tehran’s six-month price freeze on basic goods holds. Oil flow through the Strait of Hormuz — where attacks on ships using the southern route have risen, including four in the past 48 hours — remains the key variable for Iran’s foreign exchange position.

Written by

Benjamin

Benjamin Carter covers business, finance, and the stock market for StockPil, focusing on the trends and data that matter to everyday investors.

Source: The Guardian