Iran is drafting its national budget for the upcoming Persian year 1406 (2027-2028) based on various scenarios, including one under which its oil revenues are reduced to zero, a plan designed to render US economic sanctions and wartime blockades obsolete, a senior government official has announced.

Mohammad Ghasemi, Deputy for Program and Budget Coordination at the Plan and Budget Organization (PBO), outlined the government's comprehensive emergency economic roadmap, emphasizing that Tehran is preparing for the harshest financial conditions resulting from the US-Israeli war of aggression and the targeting of vital infrastructure.

Despite enemy attempts to cripple Iran's energy sector—including attacks targeting the South Pars gas fields and critical transport networks—Ghasemi stressed that the nation's economic survival is anchored in its formidable domestic production capacity, effectively decoupling the country's macroeconomic stability from Western-dominated oil markets.

"The government must prepare itself for conditions where oil revenues reach zero," Ghasemi stated, explaining that the PBO has modeled multiple scenarios to ensure the state's financial sovereignty.

He noted that emergency contingency planning began as early as the spring of 2025, anticipating the return of hardline US policies and stricter sanctions.

When the US and Israel launched their military aggression against Iran, these emergency protocols were immediately activated, factoring in severe damage to national infrastructure.

To compensate for potential revenue shortfalls, the government is pivoting toward alternative financial instruments, including oil deposit certificates, realistic and targeted taxation, and customs revenues.

Ghasemi emphasized that the state will not crush the private sector.

"We will avoid imposing irrational tax pressures on enterprises that have been directly damaged by the war, particularly in the petrochemical, steel, and tourism sectors," he affirmed.

Strict fiscal discipline

In a move to safeguard the national currency and control wartime inflation, the government has drawn a firm red line against monetizing the deficit.

Ghasemi confirmed that the executive branch has categorically refused to borrow directly from the Central Bank or use treasury bills to fund the general budget, thereby preventing any artificial increase in the monetary base and liquidity growth.

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Expenditures have been strictly triaged into three tiers: unavoidable essentials (such as the salaries of government employees and pensions), secondary priorities, and conditional spending.

"We have planned to pay salaries and wages until the end of the year and have no intention of defaulting on our debt obligations," Ghasemi said, adding that the government will continue to allocate whatever resources are available to vital infrastructure projects.

Protecting the vulnerable from economic terrorism

Acknowledging the pressures that the US-engineered war and inflation have placed on the working class, the government is aggressively reforming its subsidy and support networks to shield the most vulnerable.

Ghasemi announced plans to expand the Kalabarg (electronic coupon) system to support approximately 45 million low-income citizens, alongside increasing tax exemptions for wage earners.

To fund these initiatives without triggering inflation, the government is targeting energy smuggling and reforming the distribution chains for essential goods like wheat, flour, and bread.

"Our two absolute red lines in implementing these structural reforms are protecting the livelihoods of the people and ensuring the continuous operation of economic enterprises," he stressed.

Friction over budget expansion

Ghasemi also revealed internal friction regarding the budget's size, highlighting the executive branch's commitment to fiscal contraction in wartime.

While the government initially proposed a highly cautious budget with a nominal growth of only 2 percent to reflect wartime realities, the Iranian Parliament rejected this austerity measure, voting to expand the budget's nominal growth to 30 percent.

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Despite this, the PBO remains focused on enforcing financial discipline across state-owned enterprises, requiring them to prove the absolute economic necessity of any new projects before receiving state funding or loans.

The drafting of a "zero oil" budget represents the ultimate triumph of Iran's Resistance Economy.

For years, Washington has attempted to strangle Tehran by targeting its oil exports and financial networks.

The recent US-Israeli war of aggression, which temporarily damaged parts of Iran's energy and transit infrastructure, was intended to force a political capitulation.

Instead, Iran's technocrats have used the situation to accelerate structural reforms, eliminate energy smuggling, and prove that the nation's vast domestic industrial and agricultural base can sustain the country through the most severe external shocks.