The Seventh Development Plan sets out an ambitious and quantitative roadmap for the fourteenth administration and all executive bodies. Referred to as a “national covenant,” the plan has been drafted with a strategic outlook aimed at strengthening the economy and expanding Iran’s role in global energy markets. It assigns precise and extensive missions across the entire industry—from upstream to downstream, from production to exports.

After more than a year in force, the performance of various agencies is now being evaluated by members of the Islamic Consultative Assembly. But what exactly does the plan expect from the oil industry, and where is the sector supposed to head? The following is a review of the most important obligations, the fulfillment of which will further solidify the role of the oil industry as the driving engine of Iran’s economy over the next five years.

Three Strategic Priorities at the Core of the Plan

At the heart of the Seventh Development Plan, three strategic priorities have been defined for the Ministry of Oil. According to clause 8 of the plan’s general policies, achieving “maximum production from shared fields” along with “enhancing recovery rates in independent fields” constitutes a dual strategy for safeguarding national resources and maximizing extraction from underground reserves.

In addition to these upstream targets, the plan places special emphasis on “completing the value chain.” This means the output of the oil and gas sector should not be limited to crude sales. Through the development of downstream and petrochemical industries, the economic return from every barrel of oil and every cubic meter of gas must be multiplied domestically. Together, these three priorities shape the ministry’s overarching strategy for the five-year period.

 Targeting an Average 9% Growth in the Oil Sector

Under the Seventh Development Plan, the Ministry of Oil is tasked with enabling a major economic transformation. The five-year program sets three key goals for the industry: 12 percent annual growth in oil-related exports, 9 percent annual growth in the oil sector, and 8 percent annual growth in the gas sector. This is while overall national economic growth during the plan is set at 8 percent.

Achieving these targets will require the oil industry to remain—if not strengthen—its role as the main engine of Iran’s economy. These ambitious objectives, however, demand extensive investment and accelerated execution of large-scale projects across the entire value chain.

 Quantitative Targets: How Much Oil and Gas Must Be Produced?

Article 42 of the plan requires the Ministry of Oil to raise sustainable crude oil production capacity to 4.8 million barrels per day by the final year of the plan (2028/1407) and actual crude production to 4.58 million barrels per day. One major priority in reaching this target is boosting output from shared oil and gas fields, which must account for 1.08 million barrels of daily crude production.

Similarly ambitious targets have been set for the gas sector: daily production of 1.34 billion cubic meters of raw gas and the collection of 16 billion cubic meters of flared gas annually. These measures not only protect resources but also provide significant environmental benefits.

The plan also sets major goals for refining and consumption optimization. By 1407, daily gasoline output must reach 129 million liters, diesel 130 million liters, and fuel oil 49 million liters. Fuel quality must also improve: at least 75 percent of gasoline and diesel produced must meet Euro-4 standards or higher.

At the same time, two major technological indicators are being pursued: a one-percent increase in crude oil recovery rates and raising the share of heavy refinery products to 20 percent of total output.

Lawmaker’s Focus on Energy Waste: More Than 1m Barrels of Oil Burned Daily

In the area of energy consumption, the plan sets a major target: reducing energy use equivalent to 1,285,000 barrels of crude oil per day—highlighting the legislature’s strong intent to manage demand. According to Article 46, specific quantitative targets are broken down by sector:

Buildings: 372,000 barrels of oil equivalent per day

Industry and agriculture: 334,000 barrels of oil equivalent per day

Transportation: 248,000 barrels of oil equivalent per day

Additionally, the plan mandates producing the equivalent of 250,000 barrels per day through collecting associated gas and 80,000 barrels per day by improving power plant efficiency. These numbers make clear that meeting the country’s energy needs for growth cannot rely solely on increased production—demand-side management and efficiency must be treated as core, cost-effective strategies.

 Ambitious Goals for Petrochemicals: Completing the Value Chain Remains a Priority

The plan outlines an ambitious roadmap for expanding the petrochemical sector and completing the value chain. According to Article 47, petrochemical output must reach 131.5 million tons annually by 1407, with particular focus on developing strategic product chains.

Propylene and its downstream products must reach 11.6 million tons. Downstream methanol production is targeted at 700,000 tons. In the ethylene chain, in addition to producing 8.6 million tons of polyethylene, the plan requires 3.3 million tons of other downstream products. It also mandates production of 3 million tons of downstream aromatic products.

These goals reflect the legislature’s intention to steer the country away from raw-material exports and toward high-value-added final products.

 A Historic Authorization: Allowing the Ministry of Oil to Sign Joint-Venture Contracts in Shared Fields

Article 44 grants the Ministry of Oil the authority to sign joint-venture contracts to develop shared fields and expand exports of high-value products through investment in foreign refineries. Under the same article, the ministry must complete three major projects by the end of the plan:

 Supply 120 million cubic meters of gas per day from gas storage facilities during the two-month peak-consumption period.

 Launch and operate a comprehensive smart energy management system by the end of the second year of the plan.

 Achieve annual gas exports of 40 billion cubic meters and annual gas imports of 20 billion cubic meters, with the goal of transforming Iran into a regional energy hub.

Article 46 further emphasizes the ministry’s role—using the provisions of Article 12 of the Law on Removing Barriers to Competitive Production—to finance renewable energy development and improve energy efficiency.

 Establishing the Oil and Gas Investment Account to Solve Funding Challenges

According to Article 14, beginning in the first year of the plan, 60 percent of revenue from exports and domestic sales of gas-related byproducts—including ethane, propane, butane, pentane, sulfur, and natural gas liquids—must be deposited into a dedicated Oil and Gas Investment Account, after subtracting amounts allocated to the Energy Efficiency Account. While such revenues were previously used for oil and gas projects, the creation of this account increases oversight over how these funds are invested.

The ministry must allocate these funds either directly or as guarantees to support development projects with foreign or domestic private-sector partners. Priority areas include exploration and development of new oil and gas fields, maintenance and enhancement of existing production, especially in shared fields such as the pressure-boosting program in the South Pars shared gas field.

The government is also required to reduce diesel subsidies for major mines (those consuming over 5 million liters per year) and upstream oil and gas industries, cutting subsidies by 10 percent in the plan’s first year compared to the 2023/1402 baseline and by at least 50 percent by the end of the plan.

 A Three-Pillar Strategy for the Oil Ministry

A broad view of the plan’s obligations reveals three clear pillars:

1. Maximizing production through development of shared fields and improved recovery rates.

2. Completing the value chain through expansion of refineries, petro-refineries, and the petrochemical industry.

3. Active energy diplomacy through expanding gas and product exports and positioning Iran as a regional energy hub.

Success in this demanding path requires intelligent management, investment attraction, coordination across sectors, and effective use of emerging tools such as the Oil and Gas Investment Account. While ambitious, these targets outline a promising horizon for Iran’s economy.