Iranian Revolutionary Guard strengthens its control over oil exports
The Revolutionary Guard controls up to 50% of oil exports compared to 20% three years ago. Moreover, these figures show that the annual budget and its daily operations amount to 1 billion dollars.
The strengthening of Iran's Revolutionary Guard over the oil sector and its control over half of the exports that generate most of Tehran's revenue could be a solution to the rehabilitation of related militias, such as the Lebanese Hezbollah.
Schlomit Fagman, former director general of Israel's Money Laundering and Terrorist Financing Prohibition Authority, says: ‘The exact figures remain unannounced because Hezbollah hides the money it receives’. Although it is estimated that around 70-80% of the funding comes from Iran.
During the war against Israel, Hizbollah suffered huge military and logistical losses. For this reason it needs more resources to rebuild its destroyed arsenal and restore the meanings of its fighters, supporters and popular incubator in the south.
Iranian funding
Thus, Hassan Nasrallah, Hezbollah's former secretary general who was killed during an Israeli airstrike, claimed that Iran was helping with the group's balance sheet, paying salaries and buying weapons. The Iranian Revolutionary Guard's budget for the Lebanese Hezbollah group is estimated to be approximately $700 million a year.
Iran's support has enabled Hizbollah to develop a military and social infrastructure in Lebanon, exerting considerable influence on politics and society. Moreover, this support has been an important factor in Hizbollah's ability to operate as a military and political entity in the region.
The collapse of the Al-Assad regime is a blow to the interdependence of the militia network, but this does not mean that Iran will stop using Syria to connect and replenish Hezbollah. On the contrary, Iran's arms smuggling has always been on the rise in times of conflict.
The Revolutionary Guard and the oil market
Experts point out that the best way to provide greater resources to fund militias is to expand the Revolutionary Guard's control over the oil market by intensifying smuggling networks.
Western officials and sources familiar with the matter mentioned that all aspects of the oil sector have been under the control of the Revolutionary Guard, such as the sanctioned fleet that transports crude oil to logistics services and front companies that sell oil mainly to China.
Although Iran has sanctions on its energy sector that Donald Trump, the then president, had re-imposed in 2018, Iran is estimated to earn more than 50 billion dollars a year in oil revenues.
Sanctions on Iran's oil market
During Donald Trump's first term, the US withdrew from the 2015 Nuclear Deal and implemented tough sanctions that reduced Iran's oil exports, and Trump's return to the White House in January could mean more sanctions on Iran's oil sector.
On the one hand, Tehran is putting measures in place to deal with any restrictions, oil minister Javad Ogi said. On the other hand, the Revolutionary Guard has strengthened its influence in state institutions such as the National Iranian Oil Company.
When sanctions were imposed on Iranian oil exports, those running the National Iranian Oil Company and the oil sector in general were specialists in oil, but not in evading sanctions, said Richard Nevio, former special deputy for Iran at the US Department of State.
Nevio added: ‘The IRGC guys were much better at smuggling, but they were very bad at managing the oil fields, so they began to expand their control over oil exports’. He also mentions that the Iranian government began allocating oil rations, rather than money, to the Iranian Revolutionary Guard and the Quds Force in 2013.
Iran, at that time, due to US sanctions, was under financial pressure, as there were difficulties in exporting oil. Nevio states that the Revolutionary Guard had found ways to trade, even under sanctions.
Regarding Iran's oil revenues, according to estimates by the US Energy Information Administration, they amounted to 53 billion dollars in 2023, compared to 54 billion dollars in 2022.