Iran’s petrochemical industry has become a key source of foreign exchange after crude oil exports and a major factor in reducing the national economy’s vulnerability to oil price fluctuations. Positioned between upstream hydrocarbon resources and downstream manufacturing industries, the sector is considered a core tool for curbing raw material exports and promoting domestic value creation.
Exporting crude oil and gas without processing results in limited added value and the loss of national wealth. By contrast, petrochemical production converts feedstock into higher-value products, significantly boosting foreign exchange earnings while creating extensive direct and indirect employment.
Since the 1979 Islamic Revolution, the industry has undergone substantial quantitative and qualitative transformation. Nominal production capacity has expanded from 3 million tons per year in 1978 to about 100 million tons by the end of December 2025, while product diversity and access to international markets have increased. In recent years, petrochemical exports have not only generated stable non-oil revenue but have also supported economic diplomacy and helped mitigate sanctions-related pressures.
The industry’s future outlook focuses on deeper development, completion of value chains toward final and specialty products, expansion of large-scale projects in energy hubs, and the attraction of investment and advanced technologies. Key challenges include ensuring stable feedstock supply, improving international competitiveness, easing sanctions-related constraints and developing logistics infrastructure to secure a leading regional position and a stronger presence in global markets.
Overall, Iran’s petrochemical industry is pursuing a strategic path aimed at replacing oil revenues with high-value, sustainable income streams. Continued progress will require targeted policymaking, integrated management and technological innovation, in line with goals outlined in the Seventh Development Plan.
This report reviews developments in the petrochemical sector over the past 47 years, comparing the 1978 baseline with performance during the first nine months of 2025.
Installed Capacity
Annual petrochemical production capacity increased from 3 million tons in 1978 to nearly 100 million tons by late December 2025, marking growth of more than 33 times. The expansion reflects large-scale investment and infrastructure development over nearly five decades. Capacity reached the 100-million-ton mark following the launch of Phase 2 of the Bushehr Petrochemical Complex earlier this year.
Number of Complexes
The number of active petrochemical complexes rose from six in 1978 to 79 main complexes, along with three utility complexes, by December 2025 — an increase of more than 13 times. The expansion has widened the industry’s geographic footprint and diversified Iran’s petrochemical product portfolio. Several of the newly completed complexes have yet to be formally inaugurated.
Production
Actual petrochemical output increased from 1.6 million tons in 1978 to 60.2 million tons during the first nine months of 2025, representing more than 37-fold growth. The increase reflects expanded development, higher investment, improved productivity and stronger operational capacity.
Total Sales
Total petrochemical product sales rose from 1.17 million tons in 1978 to 35.3 million tons in the first nine months of 2025, an increase of more than 30 times, indicating growth in both domestic and international markets.
Exports
Petrochemical exports climbed from 0.6 million tons in 1978 to 24.7 million tons in the first nine months of 2025, marking growth of more than 41 times. The shift has transformed Iran from a limited consumer into a major global exporter of petrochemical products.
Export Value
The dollar value of petrochemical exports rose from $50 million in 1978 to $9.7 billion during the first nine months of 2025, an increase of nearly 194 times. Under the government’s Seventh Development Plan, the Oil Ministry has prioritized value chain development and reducing raw and semi-processed exports, a move expected to further increase export value.
Net Domestic Sales
Domestic demand has strengthened alongside the growth of downstream industries. Net domestic sales increased from 570,000 tons in 1978 to 10.7 million tons in the first nine months of 2025, reflecting a notable rise in local consumption.
Value of Net Domestic Sales
The value of domestic petrochemical sales rose from 11 billion rials in 1978 to about $7.8 billion during the first nine months of 2025. The growth highlights not only higher production volumes but also progress in value chain development and supply to domestic downstream industries, reducing import dependence and supporting national manufacturing.
While quantitative indicators such as capacity, production and sales have shown strong and notable growth, the industry’s main challenge remains the shift toward completing value chains and producing higher-technology, higher-value products. The sector’s future competitiveness will depend on a strategic transition from volume-driven growth to quality-oriented development and advanced end products.
Your Comment