By Robeka Irfan — The Changer
TEHRAN — Iran has put the head of its state oil company in temporary charge of the oil ministry after Mohsen Paknejad resigned, handing an industry insider responsibility for the country’s most important economic sector as war, sanctions and a worsening domestic fuel imbalance test Tehran’s ability to keep both export revenues and petrol supplies flowing.
President Masoud Pezeshkian accepted Paknejad’s resignation and appointed Hamid Bovard, chief executive of the state-owned National Iranian Oil Company, as acting oil minister, Iranian state media said on Sunday. A senior official in the president’s office later said Paknejad had sought to resign for personal reasons some time ago and that Pezeshkian ultimately accepted the request at his insistence. Paknejad had headed the ministry since August 2024, overseeing the energy sector through an increasingly difficult period of sanctions and conflict
The leadership change is significant because Bovard is moving directly from the company responsible for Iran’s oil production and upstream operations into political oversight of the entire ministry. He took charge of NIOC in August 2024 under Paknejad and has been involved in efforts to maintain and expand oil and gas output despite restrictions on investment, technology and trade. His appointment suggests Pezeshkian is initially prioritising operational continuity rather than bringing an outsider into the sector during a wartime disruption.
Iran remains a major crude producer, but its ability to produce oil does not automatically guarantee sufficient petrol supplies for domestic motorists. The country has faced a longstanding gap between gasoline consumption and refining capacity, a structural weakness that has become harder to manage as war, sanctions and restrictions on shipping complicate imports of refined products. Recent estimates put the domestic petrol shortfall at roughly 14 million to 15 million litres per day, while queues and supply disruptions have been reported in Tehran and other major cities.
The fuel squeeze gives the ministerial transition a domestic political dimension that goes beyond management of crude exports. Iran recently moved to raise petrol costs for heavier users as the government sought to reduce demand and protect supplies, while motorists rushed to filling stations ahead of changes to the pricing system. Iranian officials have argued that the imbalance between consumption and supply requires intervention, but fuel policy is politically sensitive because previous price increases have triggered widespread public anger.
At the same time, Tehran must protect the oil exports that provide critical foreign revenue. Shortly before his resignation became public, Paknejad said payments for oil already sold were continuing to arrive and expressed confidence that revenue flows would continue. That statement appeared intended to reassure Iranians that external pressure had not stopped the country from monetising its crude even as the seven-month conflict with the United States places additional strain on the economy.
The pressure on Iran’s energy sector is now closely connected to negotiations over the Strait of Hormuz. Tehran says reopening the strategic waterway requires the United States to meet conditions connected to sanctions, shipping and other elements of an earlier understanding, while Washington has continued to press its own demands. Before the war, roughly a fifth of global oil and liquefied natural gas passed through Hormuz, giving developments there consequences extending well beyond Iran’s domestic economy.
Bovard therefore inherits two energy problems that pull in different directions. Abroad, Iran needs to preserve crude production, exports and revenue despite economic and military pressure; at home, the government needs enough refined fuel to prevent shortages from becoming a broader source of public dissatisfaction. Managing one does not automatically solve the other because Iran can remain an oil exporter while simultaneously struggling with insufficient refining capacity and high domestic gasoline demand.
The transition also comes as Pezeshkian’s government faces difficult choices over how aggressively to reform subsidised fuel consumption during wartime. Raising prices or reducing allocations can conserve supplies and ease fiscal pressure, but such measures transfer part of the economic burden directly to households. Delaying reform, meanwhile, risks widening the gap between domestic demand and available supply at a time when importing additional fuel has become more difficult.
Bovard’s appointment provides continuity at the top of the energy system, but it does not by itself resolve those pressures. His immediate performance is likely to be judged not only by oil production statistics but also by whether the government can keep filling stations supplied, maintain export earnings and prevent disruptions to the energy sector from feeding wider economic instability.
Paknejad’s departure should also be treated cautiously in political terms. State media’s latest account attributes the resignation to personal reasons and says the request predated Sunday’s announcement, so the timing alone does not establish that he was removed because of petrol queues, war losses or disagreements over energy policy. What is clear is that the resignation has placed a new official in charge at an unusually consequential moment for Iran’s most strategically important industry.
For Pezeshkian, choosing the NIOC chief as caretaker effectively keeps management of the crisis inside Iran’s existing oil establishment while a permanent minister is considered. For Bovard, the challenge will be considerably broader than running the national oil company: he must now help manage an energy system caught between maintaining exports abroad and keeping fuel affordable and available at home.