Given that the immediate focus of U.S. sanctions on Iran is the nation’s oil sector, the Islamic Republic is concentrating on pushing its already significant petrochemicals capabilities to generate much-needed export revenues. Tehran also believes that foreign companies – particularly those in Europe – are much more likely to defy the U.S. in this sector than in the oil industry. To this effect, last week saw the chief executive officer of Iran’s National Petrochemical Company (NPC), Behzad Mohammadi, state that the country is now preparing its ‘master development plan for downstream petrochemical industries’.

This pivot to petrochemicals makes sense with the Songhor Petrochemical Projects plant set to be ready within 14 months. Also, the annual growth rate of the global crude oil industry is at best 1%, while the global petrochemicals sector is nearer 9%. According to Behzad Mohammadi, “the volume of the petrochemical industry’s trade in the world is worth US$3,800 billion annually and Iran can move more rapidly in the industry, given its massive oil and gas reserves,”.

Under the previous US sanctions – even when the E.U. dramatically increased its sanctions against Iran in 2011/2012 – the petchems sector was the foundation of Iran’s ‘resistance economy’ model. The concept of this model was to generate value-added returns by leveraging intellectual capital into business development wherever possible. As it stands, 55 petrochemical plants are operating in Mahshahr, Assaluyeh and other areas of the country with a capacity of 65 million tons per year (mpty), of which 31 million tons of products are sold, and about 22 million tons are exported to different destinations in the world.