Iran state oil company's bank accounts frozen over debt, Fars news agency reports

Iran's National Iranian Oil Company faces financial strain as its bank accounts are frozen over mounting debt, despite provisions in the country's budget law deferring repayment until 2027.

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 reported on Wednesday, underscoring the strain ‌being ​felt by the country's most important source of revenue. The Bank of Industry and Mine did not provide details on the amount owed or the accounts affected, according to Fars, ‌which added 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 said NIOC would 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 was 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 said, referring to the U.S.-Israeli war ⁠with Iran. The NIOC public relations office did not immediately respond to a Reuters request for comment.

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 U.S. 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.

TAX DISPUTES OVER COMPLIANCE NIOC also had disputes with tax authorities over compliance with recent digital invoicing rules.

Morteza ⁠Rouhi, deputy head of the company's financial management tax affairs, said on Wednesday that tax authorities had previously blocked and withdrawn ⁠funds from some NIOC accounts ⁠over the dispute but enforcement was later halted following intervention by the government's legal office. NIOC had argued that its state-controlled oil sales and confidential export transactions should not be treated like ordinary ‌commercial activity, Rouhi ‌was quoted by the semi-official Tasnim news agency as saying.