According to Article 47 of the plan, annual petrochemical production is targeted to reach 131.5 million tonnes by 2028 (1407 Iranian calendar), with a special focus on developing strategic product chains to curb raw material exports and boost value-added output.
Strategic Priorities for the Oil Ministry
The plan identifies three top priorities for the Ministry of Petroleum: maximizing production from shared oil and gas fields, increasing recovery rates from independent reservoirs, and expanding value chains across the oil, gas, and petrochemical sectors. Together, these strategies are designed to strengthen Iran’s position in global energy markets while reducing dependence on crude exports.
Under the plan, the oil sector is expected to post an average 9% annual growth, while exports of oil and gas products are projected to rise by 12% and 8% per year respectively. This outpaces the overall national economic growth target of 8%, reaffirming the petroleum sector’s role as the driving force behind Iran’s economic expansion.
Petrochemical Growth and Value-Chain Completion
The plan envisions major expansion in downstream petrochemical production. Output of propylene and its derivatives is expected to reach 11.6 million tonnes, while downstream methanol-based products are targeted at 700,000 tonnes. In the ethylene chain, 8.6 million tonnes of polyethylene and 3.3 million tonnes of other derivatives are to be produced. Aromatics downstream products are also slated to reach 3 million tonnes annually.
Analysts say these targets underscore lawmakers’ determination to move the country away from crude sales toward higher-value products, creating new jobs and increasing export revenues.
Energy Efficiency and Demand Management
In a bid to reduce waste and manage domestic demand, Article 46 sets a goal to cut energy consumption equivalent to 1.285 million barrels of crude oil per day by 2028. The largest savings are expected in buildings (372,000 bpd equivalent), industry and agriculture (334,000 bpd), and transport (248,000 bpd). Additional gains will come from flared gas recovery (250,000 bpd) and power plant efficiency improvements (80,000 bpd).
The measures reflect a policy shift from expanding supply to optimizing consumption—an approach viewed as both cost-effective and environmentally sound.
New Flexibility for International Partnerships
In a significant policy change, Article 44 authorizes the Oil Ministry to enter into partnership contracts for developing shared fields and to invest in overseas refineries to expand exports of high-value refined products. The ministry is also tasked with ensuring 40 billion cubic meters of gas exports and 20 billion cubic meters of imports per year by the end of the plan, positioning Iran as a regional energy hub.
A national smart energy management system is to be launched by the plan’s second year to monitor production, transport, storage, and consumption across the entire oil and gas network.
Production and Refining Targets
Article 42 mandates the ministry to raise sustainable crude oil production capacity to 4.8 million barrels per day and actual output to 4.58 million barrels per day by 2028, with at least 1.08 million barrels coming from shared fields. Daily gas output is to reach 1.34 billion cubic meters, alongside the recovery of 16 billion cubic meters of flared gas annually.
Refined fuel production is also expected to climb, with 129 million liters of gasoline, 130 million liters of diesel, and 49 million liters of fuel oil produced daily by 2028. At least 75% of these fuels must meet Euro-4 standards or higher.
Technological goals include raising the oil recovery factor by one percentage point and increasing the share of heavy products to 20% of total output.
New Investment Mechanism
To tackle financing constraints, Article 14 establishes an Oil and Gas Investment Account, directing 60% of revenues from the sale of gas byproducts—such as ethane, propane, butane, pentane, sulfur, and gas condensates—into this dedicated fund. The resources will support exploration, field development, and maintenance projects, with priority given to shared fields like the South Pars gas field.
The government is also required to gradually cut diesel subsidies for major industrial consumers, reducing total subsidies by at least 50% by 2028 compared with 2023 levels.
Outlook
The Seventh Development Plan sets the stage for a new phase in Iran’s energy policy—balancing production growth, downstream expansion, and energy efficiency. Achieving these targets, however, will hinge on attracting foreign investment, enhancing management efficiency, and ensuring policy stability.
Despite challenges, successful implementation could reaffirm Iran’s standing as a major energy producer and advance its long-term goal of becoming a regional energy hub.