The Iran-Iraq War and the Securitization of Iran’s Energy Sector
Written by Mark Zilberman; Edited by Alex Tapia and Andrew Ma
Published on July 1st, 2025
Introduction
The Iran-Iraq War (1980-1988) was arguably the most formative period in the history of the Islamic Republic. Instigated by Iraqi President Saddam Hussein’s surprise invasion, the conflict heightened Iran’s strategic isolation and fundamentally reshaped the regime’s approach to national security. This transformation was most evident in the emergence of the “Forward Defense” doctrine—an approach designed to project power beyond Iran’s borders through unconventional methods, including ballistic missile development, a clandestine nuclear program, and support for non-state actors, including Hamas and Hezbollah.
Less discussed, however, was the impact of the war on the development of Iran’s energy sector—a vast grouping of industries encompassing the country’s oil and gas production and the civilian and scientific aspects of its nuclear program. Even before the outbreak of the war, a raft of international sanctions imposed after the 1979 revolution severely constrained Iran’s energy trade and development. The regime’s experiences dealing with Iraqi and American attacks on oil tankers and energy infrastructure during the war enabled it to adopt effective strategies to secure continued energy flows.
This paper argues that the Iran-Iraq War was essential to the securitization of Iran’s energy sector by transforming it from a standard political issue into a matter of national survival. The paper will first examine how Iran enabled the Islamic Revolutionary Guard Corps (IRGC) to consolidate control of the country’s energy industry as a means of safeguarding it from external pressure, followed by an investigation into how the regime created a secret “shadow fleet” network to facilitate illicit oil exports, which Iran began to perceive as a crucial tool for its survival. Finally, the paper will explore how Iran has employed a range of unconventional tactics to defend its critical energy infrastructure from external attack, thereby cementing Tehran’s energy sector as a top priority for the regime.
The IRGC’s Energy Monopoly
The Iran-Iraq War devastated Iran’s energy sector, its primary source of revenue and cornerstone of economic growth. The damage was especially pronounced to Tehran’s oil industry, with severe international sanctions and continued American and Iraqi attacks precipitating a sharp decline in oil revenue and the destruction of critical facilities. As the war dragged on, Tehran came to view energy exports as not just a financial asset, but a lifeline for the clerical regime. Facing heightened international isolation after the war, the regime was forced to rely on unconventional allies to help rebuild the country’s energy sector. The Islamic Revolutionary Guard Corps (IRGC) was an ideal partner in this quest.
Formed in the wake of the 1979 revolution, the IRGC defended Iran’s revolutionary theocratic regime from internal and external opposition. Distinct from the conventional Iranian army, the organization possesses its own ground, naval, and air forces as well as a volunteer-based internal security force—the Basij—and an external operations wing—the Quds Force. Notably, the IRGC has played a leading role in supporting Islamist paramilitary groups in Gaza (Hamas), Lebanon (Hezbollah), and elsewhere to undermine American and Israeli influence in the Middle East—a grouping of non-state allies collectively known as the “Axis of Resistance.” They have also strengthened their role in Iran’s domestic politics, and, as noted by Ray Takeyh of the Council on Foreign Relations, have become “the most important single organization within the Islamic Republic.” This institutional prominence enabled them to consolidate control of Iran’s energy infrastructure—an issue that took on existential importance in the Islamic Republic.
The Iran-Iraq War exposed the vulnerability of Iran’s oil industry to external pressure, enabling the IRGC to substantially expand its control over Iran’s energy sector. As Hamed Saidi explains, the Iranian government “sought to utilize resources… and a host of [armed] parastatal organizations…[like] the IRGC” to advance postwar reconstruction reforms and fuel private-sector growth. In this sense, the IRGC’s involvement reflects the evolution of Iran’s energy sector into a crucial pillar of national security. Therefore, the government crafted initiatives deliberately designed to integrate the IRGC into Iran’s postwar economic order.
Among these initiatives was the government’s nominal privatization of state-owned oil and gas companies, which created a prime opportunity for the IRGC to increase its economic influence in the decades after the war. Khatam al-Anbiya, an engineering firm founded by the IRGC in 1989, “[became] one of the largest…contractors…in [Iran’s] oil and gas industry,” playing a vital role in developing oil fields, refining crude oil, and constructing oil, gas, and petrochemical pipelines and storage facilities. The company became particularly influential during the presidency of Mahmoud Ahmadinejad (2006-2013), receiving about $7 billion in non-competitive contracts for roughly fifteen different projects, including the development of the South Pars Gas Field near the Persian Gulf and a 600-mile “peace pipeline” to Pakistan and India in 2006. This consolidation of economic power not only fuelled the IRGC’s growing autonomy but also entrenched its leading role in safeguarding what the regime increasingly saw as the backbone of its national survival.
In recent years, the IRGC has particularly consolidated its control over Iran’s oil infrastructure. According to Western and Iranian officials, the organization controls roughly half of the country’s annual oil export revenue ($50 billion) as of December 2024—a sharp increase from just 20 percent three years before. This has enabled the IRGC to wrest away power from state corporations like the National Iranian Oil Company (NIOC) and Naftiran Intertrade Company (NICO), a Swiss-based oil trading subsidiary. Aided by its navy’s outsized presence in the strategically vital Strait of Hormuz, the IRGC has employed front companies and a growing “shadow fleet” to facilitate crude shipments to China, Syria, and the United Arab Emirates. The wartime threats to Iran’s oil industry entrenched the IRGC’s control, placing the protection of Iran’s energy assets at the center of its national security strategy, as explored in detail in the following sections.
Iran’s “Shadow Fleet”
Given the importance of oil revenue to Iran’s national survival, protecting oil exports became a key strategic priority in the postwar years. The obstacles Tehran encountered during the war—including U.S.-led sanctions and escalating naval conflict in the Persian Gulf—compelled it to pursue drastic measures to secure continued oil flows. With the IRGC’s support, the regime invested in a covert strategy designed to combat the growing international pressure.
In October 1987—amid escalating tensions in the Persian Gulf—President Ronald Reagan reinstated a full trade embargo against Iran just years after the release of U.S. hostages in January 1981. After Iraq began attacking Iranian oil facilities in 1984, Iran retaliated by targeting vessels belonging to or trading with Iraq, launching what became known as the “Tanker War.” Kuwait, a major target of Iranian attacks, successfully convinced the U.S. to protect and reflag its tankers after Reagan learned that “it would [otherwise seek assistance from] the Soviet Union.” Meanwhile, Gulf Arab states aligned with Saddam increased oil production to put pressure on Iran’s economy, reflecting the importance of Iran’s energy sector to the resilience of the clerical regime. Facing growing military and economic pressure, the Islamic Republic began to lay the groundwork for the secret oil shipping network that became known as the “shadow fleet.”
Although Iran faced a similar physical threat to its oil exports in the early 2010s, escalating financial pressure by the U.S. and European Union—including an EU oil embargo in 2012 designed to block advancements in Tehran’s nuclear program—forced it to accelerate its use of evasive tactics. The same year the EU imposed sanctions, the regime, primarily through the IRGC, began deliberately reflagging its oil tankers under third-party countries like Panama and Tanzania to evade detection. However, this strategy was not just about evading sanctions—it was crucial to maintaining the regime’s internal stability and securing funds for the IRGC’s proxy network.
While the 2015 Joint Comprehensive Plan of Action (JCPOA) and the temporary relaxation of sanctions briefly slowed Tehran’s activities, Iran’s “shadow fleet” operations resumed in full force after President Donald Trump withdrew the U.S. from the agreement in 2018. Since then, according to United Against Nuclear Iran’s (UANI) public tracker, “[over 500] foreign vessels [have been] suspected of involvement in the illicit transfer of Iranian crude oil...” The People’s Republic of China (PRC) has been the primary destination for these shipments, accounting for “approximately 90% of Iran’s oil exports” today despite a recent escalation of U.S. sanctions. Therefore, the lessons the regime learned during the Iran-Iraq War were essential to the securitization of its energy exports via the “shadow fleet,” transforming clandestine oil shipments from a temporary workaround into a crucial lifeline for the regime.
Defending Critical Energy Infrastructure
The Iran-Iraq War further underscored the importance of protecting Iran’s critical energy infrastructure to ensure regime survival. During the 1990s and the 2000s, the IRGC’s growing control over Iran’s energy sector positioned it as the primary guarantor of Iran’s energy defense. To secure Iran’s energy sites from external attack, the IRGC adopted a strategy of “passive defense” based on “hardening…[and] concealment” of underground facilities to streamline defense spending. However, the majority of the country’s oil infrastructure remained above ground in areas like Khuzestan province, Kharg Island, and the Persian Gulf, and their geography exposed them to maritime threats along the Gulf and the Strait of Hormuz.
Forced to rethink its approach to energy defense, the regime has strengthened its asymmetric capabilities to deter external aggression. This includes resorting to threats against international shipping and oil assets located near the Persian Gulf, an approach encapsulated by the Iran-backed Houthi strikes on Saudi oil refineries in September 2019. Tehran has also strategically deployed air defense systems to protect critical nuclear and energy infrastructure, particularly Russian-made surface-to-air (SAM) systems, including the SA-14, SA-18, and the four S-300s Israel destroyed in its April and October 2024 attacks. Although its oil infrastructure remains largely above ground, the regime’s ongoing efforts to fortify underground nuclear sites near Natanz reflect its broader strategy of securing key energy facilities. Therefore, the protection of Iran’s critical energy sites became essential to the survival of the Islamic Republic.
Conclusion
The traumatic experience of the Iran-Iraq War taught Iran that energy was not merely important to economic prosperity, but to the survival of the Islamic Republic. Seeking to safeguard its energy resources and economy in the face of growing international isolation, the regime established asymmetric deterrence at the forefront of its energy defense strategy.
In light of Israel’s ongoing attacks against Iran’s nuclear and energy-related infrastructure, Tehran has activated its air defense systems, relocated its stockpiles of enriched uranium to undisclosed locations, and even threatened to blockade the Strait of Hormuz. With the potential for wider regional conflict looming large, the regime will almost certainly double down on this approach.
