National Iranian Oil Refining and Distribution Company: Necessary measures had previously been taken to minimize product reserves - state media
TL;DR
Iran's NIORDC released strategic gasoline reserves to address supply shortages, but systemic issues like smuggling and low refining capacity persist. Rationing measures have been implemented, but long-term solutions are needed to fix structural inefficiencies.
National Iranian Oil Refining and Distribution Company: Necessary measures had previously been taken to minimize product reserves - state media
The National Iranian Oil Refining and Distribution Company (NIORDC) has implemented measures to reduce reliance on strategic gasoline reserves amid persistent supply-demand imbalances. According to state media, NIORDC released approximately 900 million liters of strategic reserves into the market to address a daily deficit of 17 million liters between production and consumption. As of late 2025, reserves stood at roughly 500 million liters, providing a buffer of less than four days against production disruptions.
The government's decision to tap reserves reflects broader challenges in Iran's energy sector, including smuggling, low refining capacity, and international sanctions. Subsidized fuel prices—among the world's lowest at less than 3 cents per liter—have incentivized cross-border smuggling, exacerbating domestic shortages. To mitigate this, NIORDC introduced rationing measures, limiting refueling sessions to 30–40 liters during peak travel periods.
Despite these steps, systemic issues persist. A classified document revealed in March 2025 that strategic reserve levels had fallen to critical thresholds, prompting delays in refinery maintenance to prioritize short-term production. The government has avoided public discussions about price hikes, fearing social unrest following violent protests triggered by a 2019 fuel price increase.
Analysts note that Iran's energy sector remains vulnerable due to underinvestment, corruption, and outdated infrastructure. While the IEA has not deemed emergency reserve releases necessary for global markets, regional instability and Iran's internal challenges underscore the fragility of its fuel supply chain. For now, NIORDC's measures aim to stabilize distribution, but long-term solutions will require addressing structural inefficiencies and subsidy-driven distortions.
