Oil Minister has Big Plans for likely Last Term

Another technological game-changer is the growing significance of energy efficiency. The government has passed a law that authorizes the MoP to guarantee investments of up to a total of $100 billion that are designed to improve energy efficiency and save energy resources. This is also a new experience that the technocracy in MoP needs to adjust to, i.e., the realization that it may actually be cheaper to save a barrel of oil than to produce one.

There are also other challenges that Zanganeh is facing. Energy sector expert Mehdi Assali believes that adjusting the political economy of oil will be one of Zanganeh’s challenges — “deciding about production levels, how to distribute the resulting oil rent among influential stakeholders in the political sphere and policies toward foreign investment that will be needed to optimize the utilization of the country’s vast oil and gas reserves.”

It is no secret that the rents emerging from the petroleum sector have corrupted significant layers of the state structure. The case of the corrupt network around jailed businessman Babak Zanjani is only one example of the shady structures and dealings around petroleum sector interests in Iran. The only viable path to reduce the potential of corruption is to introduce the highest level of transparency into the sector — a process that will require legal and political reforms.

All in all, Zanganeh and the MoP will continue to face major challenges in achieving their stated goals. However, in the absence of major political upheavals, Zanganeh is the right politician to pursue these objectives and elevate the country’s most important economic sector to new highs.

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