Since the 1970s, oil has been the basis of Iran's
business. More than 80 percent of the country's export
income comes from the oil.
During the 1970s, a dramatic social and economic change
process was under way that included land reform,
industrialization and some liberation for women. Economic
growth rates were high and labor shortages prevailed. This
process, however, gave rise to sharply increased social
COUNTRYAAH, the Islamic revolutionary government that seized power in
1979 radically changed Iran's economic and social
development strategies. The new leaders announced a focus on
low growth rates, small-scale industrialization, traditional
agriculture and strict control of the oil exports that are
so important to Iran. The far-reaching central government of
the economy, combined with reduced oil exports and
widespread destruction of industries and infrastructure
during the war against Iraq (1980-88), seriously hurt
During the 1990s, the oil industry destroyed during the
war was rebuilt and state-owned companies were privatized.
Since then, economic policy has shifted between liberal
efforts and a more closed economic policy. The country has
for a long time had substantial subsidies of, among other
things, food and vehicle fuel. These have become
increasingly expensive for the state to maintain and
periodically rations have been introduced. Extensive welfare
investments and the large subsidies have meant that the
country has a rising budget deficit and high inflation.
Together with poor growth outside the oil sector, this makes
the country highly dependent on the world market price of
oil. In 2010, a process was started to abolish the
subsidies, with major popular protests as a result.
In 2006, the UN imposed financial sanctions on Iran to
stop the country from renewing its nuclear program.
Subsequently, the US and the EU imposed new sanctions for
the same purpose. In 2015, the UN Security Council, Germany
and Iran agreed to gradually lift the sanctions. The
sanctions have hit the Iranian economy hard and have
resulted in a price collapse in oil, but after the easing of
the sanctions, greater hopes were tied to increased
opportunities for foreign investment in the country.
In January 2016, the IAEA announced that Iran had
fulfilled its commitment to dismantle its nuclear program,
for example, Iran had closed a heavy water reactor and
reduced its enriched uranium stockpile. As a result, the UN,
the EU and the US lifted many of their sanctions against the
country, for example, the EU's oil embargo was lifted. Iran
also regained access to the international financial sector
and the country recovered frozen assets of about SEK 400
However, new sanctions were introduced in 2018 in
connection with the US decision to withdraw from the Iran
For information on GDP and other business statistics, see
Apart from the Caspian coastal country, Iran has few
permanent permanent areas due to climate and topography. Of
the total land area, 11 per cent is agricultural land, of
which just under half is irrigation. Repeated earthquakes
have seriously damaged the irrigation systems in the
country. The most important production areas are located in
the north and west, where mainly cereals and fruit are
produced. In the east and south dates are the most important
crop. Agriculture is poorly developed and farming methods
are primitive. Disagreement over agricultural policy, rapid
population growth, precarious ownership conditions and
inadequate communications contribute to agricultural
About 18 million ha (7 percent of the country's area) are
covered by forest. The most important forest areas are in
the Zagros Mountains and the Caspian Sea Coast Mountains.
The forest was nationalized during the Shah's time, when
forest management and new planting began. Some significance
also has the collection of gum arabic and resins.
Fishing, despite the country's long coast, is not very
significant, but the industry is developing, and catches
have increased strongly in recent years. The largest catches
are taken in the Persian Gulf. Casting in the Caspian Sea
provides genuine caviar, which is largely exported.
Iran's oil reserves are among the world's largest; in
2019, they are estimated to be 9 percent of the world's
known assets. Iran's oil production has varied widely. The
largest production occurred in the late 1970s, just before
the revolution, when it produced 6 million barrels a day.
Since then, the revolution, war and internal unrest have
caused production to decline. However, in 2011 it reached
4.3 million barrels, but US and EU sanctions in connection
with disputes over Iran's nuclear technology affected
exports, and production fell to 3.6 million barrels in 2013.
In 2016, the IAEA announced that Iran had met its
commitments to dismantle its nuclear energy program, and as
a result, the UN, EU and US lifted many of its sanctions on
the country, such as the EU's oil embargo. As a result, oil
production and exports increased again. In 2019 production
was back at the same levels as before the sanctions. New
sanctions were introduced by the United States in 2018 in
connection with the country's withdrawal from the Iran
The most important mining areas are located in Khuzestan,
along the border with Iraq and in the Persian Gulf
(offshore). Only a small part of the oil is refined in the
Iran also has the world's second largest natural gas
deposits, corresponding to 16 percent (2019) of the world's
known reserves. The gas bodies are more dispersed than the
oil. The most important deposits are in Khuzestan and
Khorasan as well as in the Elburz Mountains and on the coast
of the Persian Gulf.
Otherwise, Iran is rich in a variety of minerals (copper,
iron, coal, chromium, lead, zinc, uranium, phosphate, salt),
but the deposits have so far been little used.
Iran's rich deposits of oil and natural gas, along with
government electricity subsidies, have contributed to Iran's
relatively high energy consumption. About 25 percent of the
country's villages are estimated to lack electricity, but an
expansion is ongoing. Three quarters of the electricity
generation comes from cogeneration plants and the majority
of the remaining part comes from hydropower plants. Iran's
first nuclear power plant was commissioned in 2010.
The petrochemical and metal industries are the backbone
of Iran's industry. During the 1990s, Iran has established
itself as the Middle East's largest steel producer. The
manufacturing industry includes the engineering and textile
industries and the pharmaceutical industry. It is mainly
concentrated in Tehran. Traditional products are mainly
textiles (rugs), leather goods and food. Foreign investment
was previously curbed by complicated bureaucracy, but during
the 00s the bureaucracy was eased and more and more foreign
investors have established themselves in the country.
Crude oil and natural gas account for most of Iran's
exports. The government has for many years aimed at
increasing exports of other than oil products, but so far
there has been no great success. Iran is dependent on
imports of technology and spare parts from Western Europe
and China. The main exporting countries are China, India and
South Korea, and the main importing countries are the United
Arab Emirates, China and Turkey.