Iran is running out of gasoline. A convergence of the US naval blockade, Ukrainian strikes on Russian refineries, and disrupted Caspian Sea supply routes has created a daily deficit of roughly 15 million liters, triggering long queues at petrol stations and closures across the country, according to multiple reports citing informed sources familiar with the situation.
The crisis has been building for weeks and reached a tipping point in late August as Western media documented widespread gas station shutdowns and panic buying in Iranian cities. The Wall Street Journal reported labor protests and panic buying signaling growing domestic pressure on the regime, while Iran International confirmed fuel shortages at stations around Tehran, Isfahan, and other major population centers. Drivers in some cities reported waiting hours in line only to find pumps completely dry.
Three Supply Routes Severed Simultaneously
Three simultaneous disruptions have converged to strangle Iran’s fuel imports. The US naval blockade, imposed after the war began on February 28, has sealed Iranian ports and prevented refined gasoline from arriving by sea. Ukrainian drone strikes on Russian refining infrastructure have cut off a key alternative supply source that Tehran had relied on during earlier periods of sanctions pressure. And the disruption of Caspian Sea shipping between Iran and Russia, following a July Ukrainian attack on cargo ships transporting military equipment, has eliminated the overland workaround that Iran used to bypass the maritime blockade.
Iran’s domestic refining capacity has historically struggled to meet consumption demand, making imported gasoline an essential supplement to domestic supply. Before the war, the country imported significant volumes of refined fuel to bridge the gap between its refinery output and the roughly 80 million liters per day consumed by its vehicle fleet and petrochemical industry. With all three import routes now severed, the shortfall has become acute. Sources told anti-regime media that Iran has not yet secured alternative fuel supplies and has resorted to drawing down its strategic fuel reserves to meet basic domestic demand.
IRGC and Government Clash Over Fuel Reserves
The crisis has exposed a deepening rift within the Iranian regime over how to respond. According to sources speaking to anti-regime media, the Islamic Revolutionary Guard Corps is unwilling to release strategic fuel reserves for domestic consumption. President Masoud Pezeshkian’s administration, by contrast, supports tapping those reserves to contain public concern over shortages and higher prices.
The dispute reflects a broader factional struggle between hardliners loyal to Supreme Leader Mojtaba Khamenei, who prioritize maximalist war objectives and control of the Strait of Hormuz over economic relief, and pragmatists in the government who fear that domestic instability could threaten regime survival. This is not the first time the two camps have clashed over economic concessions. Previous disputes followed the same pattern, with the pro-concessions faction seeking limited deals with Washington to ease pressure at home while hardliners held firm on core demands.
Price Hike Risks Repeat of 2019 Protests
Tehran is reportedly considering raising gasoline prices to manage the shortage, a move that carries enormous political risk. In November 2019, an overnight tripling of fuel prices triggered the deadliest protests in the Islamic Republic’s history, with security forces killing at least 1,500 demonstrators according to Reuters. Any price increase now, with the population already squeezed by hyperinflation and shortages of foreign currency and basic goods, could reignite similar unrest on an even larger scale.
Central Bank Governor Abdolnasser Hemmati claimed on August 27 that Iran has avoided inflation through stabilizing measures and maintains at least 17.2 billion US dollars in foreign currency reserves. However, Hemmati himself acknowledged foreign currency shortages just one week earlier, undermining confidence in the official narrative. Oil Minister Mohsen Paknejad separately insisted that Iran continues exporting oil beyond the region, implying revenue streams remain intact, though the details of those exports remain unclear given the blockade.
Senior officials in Pezeshkian’s administration have moved to downplay the severity of the economic situation, a strategy analysts say is aimed at preventing panic buying and bank runs that could further intensify shortages. Vice President for Executive Affairs Mohammad Jafar Ghaempanah admitted on August 27 that gasoline imports have been disrupted since the start of the conflict, a rare public acknowledgment of the crisis from within the government.
The fuel crisis compounds the broader economic damage inflicted by six months of war. The closure of the Strait of Hormuz has disrupted global oil flows, while US sanctions under Operation Economic Outcast target every remaining economic lifeline sustaining the Iranian regime. Western officials estimate that Iran’s foreign currency reserves have declined sharply since February, and the rial has lost significant value against the dollar on unofficial markets. Analysts at the Institute for the Study of War and the Critical Threats Project noted that the regime’s messaging appears designed primarily to reassure the Iranian public rather than reflect genuine economic improvement.
With no diplomatic breakthrough in sight after Trump abandoned the June memorandum of understanding, and with the US campaign of economic pressure intensifying, the fuel crisis shows every sign of deepening. Iran’s gasoline deficit is not narrowing, the regime refuses to tap its reserves, and the population bears the mounting cost of a conflict that has dragged on for six months with no end in sight.
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