Iran prepares next year’s budget for ‘zero oil’ scenario: PBO
Iran is drafting its national budget for the year beginning March 21, 2027, under several scenarios, including one in which oil revenues fall to zero, as the government prepares for the economic impact of US sanctions and wartime blockades, a senior official said.
Mohammad Qasemi, deputy for program and budget coordination at the Plan and Budget Organization (PBO), said the government was preparing for severe financial conditions resulting from the US-Israeli war and attacks on critical infrastructure, Press TV reported.
Despite damage to parts of the country’s energy and transport infrastructure, including attacks on the South Pars gas fields, Qasemi said Iran’s domestic production capacity would help sustain economic stability even if oil revenues disappeared.
“The government must prepare itself for conditions where oil revenues reach zero,” he said, adding that the PBO had developed several scenarios to safeguard the country’s finances.
He said contingency planning began in the spring of 2025 in anticipation of renewed US pressure and tighter sanctions. The plans were activated when the US and Israel launched their military campaign against Iran in late February, taking into account potential damage to national infrastructure.
To offset possible revenue losses, the government is considering alternative sources of funding, including oil deposit certificates, targeted taxation and customs revenues.
Qasemi said the government would avoid placing excessive tax burdens on private businesses directly affected by the war, particularly in the petrochemical, steel and tourism sectors.
Fiscal discipline
The government has ruled out direct borrowing from the central bank or using treasury bills to finance the general budget, Qasemi said, in a bid to prevent growth in the monetary base and liquidity.
Public spending has been divided into three categories: essential expenses, including government salaries and pensions; secondary priorities; and conditional spending.
“We have planned to pay salaries and wages until the end of the year (March 21, 2027) and have no intention of defaulting on our debt obligations,” he said, adding that funding would continue to be allocated to vital infrastructure projects as resources allowed.
The government is also reviewing its subsidy and support systems to protect vulnerable groups from the effects of inflation and wartime economic pressures.
Qasemi said the government and parliament had disagreed over the size of next year’s budget. The government initially proposed limiting nominal budget growth to 2% to reflect wartime conditions, but Parliament rejected the proposal and approved an increase of 30%.
The PBO is also seeking tighter financial oversight of state-owned companies, requiring them to demonstrate the economic necessity of new projects before receiving government funding or loans.
The drafting of a “zero oil” budget represents the ultimate triumph of Iran’s Resistance Economy.
For years, Washington has attempted to strangle Tehran by targeting its oil exports and financial networks.
The recent US-Israeli war of aggression, which temporarily damaged parts of Iran’s energy and transit infrastructure, was intended to force a political capitulation.
Instead, Iran’s technocrats have used the situation to accelerate structural reforms, eliminate energy smuggling, and prove that the nation’s vast domestic industrial and agricultural base can sustain the country through the most severe external shocks.