Iran uncovers oil pipeline taps amid fuel smuggling crisis

Iranian authorities have discovered and sealed four illegal taps on a major oil pipeline near the southern city of Bandar Abbas as the country grapples with a massive fuel smuggling crisis, officials said on Sunday.

Mojtaba Ghahramani, head of the Hormozgan Province Judiciary, said that the unauthorized diversions were found on a natural gas pipeline between the villages of Sar-Rig and Isin.

"Technical and police measures have been initiated to identify the perpetrators of this fuel theft," Ghahramani said, adding that some of the taps appeared to be newly installed.

Ghahramani repeated the judiciary's past warnings to the Ministry of Petroleum about the need for enhanced monitoring and the installation of advanced metering systems.

The discovery follows heightened scrutiny of fuel smuggling in Iran, with President Masoud Pezeshkian recently decrying the daily loss of 20 to 30 million liters of fuel as a catastrophe amid a nationwide energy crisis.

Economists and officials have increasingly pointed to systemic, large-scale operations, rather than small-time smugglers, as the primary drivers of the illicit trade.

Estimates suggest that up to 50 million liters of fuel may be smuggled out of Iran daily, raising questions about high-level complicity.

"This volume of smuggling cannot be the work of small-time smugglers in border regions. It is definitely done by government entities," economist Hossein Raghfar told local media.

The sheer scale of the operation, involving potentially thousands of trucks or large tankers, has led experts to suspect the involvement of organized networks and even elements within the Islamic Revolutionary Guard Corps (IRGC).

The IRGC controls a significant portion of the country’s transportation networks and border crossings, which, according to economic journalist Reza Gheibi, makes it difficult to imagine that such large volumes of fuel could be smuggled out of the country without the IRGC’s knowledge or involvement.

The lucrative nature of fuel smuggling, driven by the disparity between subsidized domestic prices and higher international rates, has also fueled corruption within government ranks, evidenced by recent official arrests

In December 2022, Aref Akbari, the Public and Revolutionary Prosecutor of Hormozgan Province, announced the arrest of six rural mayors, three employees of the Ministry of Industry, and two members of the Engineering Organization on charges of collaborating with fuel smugglers.

The ongoing energy crisis, marked by power outages and disruptions to industrial and even government activity, has intensified calls for stricter oversight and technological solutions to curb fuel theft.