Mohammad-Sadeq Azimifar said what matters most is setting the right direction, prioritizing key issues and defining effective collaboration models.

Speaking Wednesday at a ceremony marking Research Week at NIORDC, Azimifar cited mounting challenges facing the country’s energy sector, particularly refining and distribution, including supply-demand imbalances, rising consumption, severe resource constraints, sanctions, distribution network complexity and environmental requirements. These pressures, he said, have forced the industry into difficult decisions and measures.

He said traditional, fragmented approaches that once prevailed have proven ineffective. “If those approaches were efficient, we would be seeing improvements in key performance indicators today, not in some cases a decline,” Azimifar said. He added that overcoming current challenges requires a fundamental transformation in decision-making, execution and governance.

 Strategic document drafted

Azimifar said a comprehensive strategic document for the refining and distribution sector was drafted under the 14th administration after a detailed assessment of existing conditions, weaknesses and challenges. The document outlines six core strategies that now serve as NIORDC’s roadmap and overarching policy framework.

Despite resource constraints, he said, improving productivity and making smarter use of existing capacities can lead to tangible gains in indicators that are currently below desired levels.

He emphasized that research and technology must be central to decision-making and operations, not sidelined. “This is not a slogan,” Azimifar said, noting that recent experience shows a technology-driven approach and use of modern tools can generate significant returns for the company.

He said research should be aimed at solving real industry problems and that technology is effective only when implemented at an operational scale rather than remaining at the laboratory level. He also stressed the importance of integration in research and technology activities.

 Need for an integrated approach

Azimifar, who also serves as a deputy oil minister, said the scale of the refining and distribution sector — including 10 refineries, about 15,000 kilometers (9,300 miles) of pipelines, 37 distribution regions, 70 to 80 depots, more than 5,100 liquid fuel stations and about 2,400 CNG stations — makes an integrated, macro-level approach to research and technology essential.

He said digital transformation and smart systems are not symbolic initiatives but core principles embedded in the company’s plans. About $55 billion worth of products are produced and distributed annually across the refining value chain, he said, making intelligent management of these resources unavoidable.

Azimifar pointed to significant losses in the country’s fuel chain, saying estimates show that about $7 billion to $8 billion worth of petroleum products are smuggled each year, while substantial volumes are also wasted during consumption. Combined with the vast amount of data available across production, transmission and distribution, he said, this represents a major opportunity to boost efficiency and move away from intuition-based, traditional management toward data-driven and smart systems, especially in transmission and distribution.

Shift toward data-driven management

Azimifar said the sector must move beyond reactive management to a data-driven approach. He cited pipeline SCADA systems that had gone offline several years ago, noting that during his first visit to the Tehran pipeline region, delivery time calculations were still being done manually on paper, leaving dispatch operations inefficient.

He said management information systems are active within NIORDC and collect daily data, but their use has largely been limited to general oversight. Properly organizing and analyzing existing data, without generating new datasets, could generate $2 billion to $3 billion annually for the country with minimal cost, he said. About 400 trillion rials are spent each year on transportation and transmission, highlighting the sector’s high efficiency-improvement potential.

Azimifar said reviving the SCADA system is underway and that the National Iranian Oil Distribution Co. is restoring its infrastructure. He added that an integrated business intelligence system has been launched and the transfer of refinery distributed control systems to a central refining and distribution monitoring center has begun. The Persian Gulf Star Refinery’s DCS has already been connected, and an integrated smart monitoring center is expected to be officially unveiled within the next two months.

Data analysis exposes fuel smuggling

Azimifar cited practical examples of data analytics, saying cross-referencing data from the smart fuel system, intercity cameras and freight documentation platforms enabled the identification of widespread irregularities in fuel distribution without complex measures.

The effort led to the identification of more than 600 million liters (about 159 million gallons) of fuel diversion and the revocation of operating licenses linked to smuggling, he said. In one case, a truck registered in Tabriz carried documents showing a Tehran-to-port route, while its fuel card was used elsewhere. The measures generated an estimated $400 million in economic value for the country.

He said the initiative also helped reduce product imports and increase national reserves, demonstrating the vast potential of technology-driven, data-based work in refining and distribution. In recent months, he added, multiple contracts have been signed with universities and research centers in priority areas to ensure sustained research and technology activities and move away from fragmented approaches.

New financing mechanisms

Azimifar said corporate venture capital models for the refining industry have been approved by refinery boards and are undergoing licensing procedures with the vice president’s office for science and technology.

He warned that without faster adoption of available tools — particularly in innovation and digital transformation — conditions will become increasingly difficult. Innovation, digital transformation and problem-solving, he said, are inseparable from the refining industry, adding that with skilled human capital and stronger ties to the technology ecosystem, the sector can take effective steps to address imbalances and long-standing challenges.