Iran's oil exports have entirely stopped amid ongoing war and international sanctions, Central Bank Governor Abdolnaser Hemmati confirmed in a televised interview on August 19, 2026 [1, 2, 3]. He said Iran, along with Iraq and Qatar, has seen oil export revenues fall to zero. "There is no doubt that we face restrictions on oil exports," Hemmati said, adding that Iraq and Qatar's revenues from oil sales also dropped to zero, just like Iran’s [1].
Unlike Iraq and Qatar, Iran’s foreign currency reserves remain frozen by the United States, preventing withdrawal or access. Hemmati noted, "The Americans have frozen our foreign currency reserves and do not allow us to withdraw them" [2]. While Iraq and Qatar can access their central bank reserves, Iran is effectively barred from using its funds.
In June 2026, Iran and the US agreed on the Islamabad Memorandum, a framework intended to pave the way for a final deal and the potential release of some Iranian funds. Hemmati said these funds "have not yet been released," calling it "a separate matter" from the oil export restrictions [3].
Before the war, Iran exported about $12 billion worth of goods and services annually to Iraq. Of this, $4 billion involved the Iraqi government for gas and electricity, and $8 billion went to the private sector [1, 2, 3]. Iraq has pledged to address outstanding payments to Iran but also faces difficulties due to disruptions to its own oil revenues and the closure of the Strait of Hormuz [1, 2, 3].
Discussions are ongoing between Iran and Iraq to facilitate the transfer and use of Iranian funds held in an Iraqi bank. Both countries agreed to collaborate on using resources at the Trade Bank of Iraq to back guarantees issued to Iranian contractors operating inside Iraq [1, 2, 3].
The situation leaves Iran’s oil sector at a standstill, while financial talks with Iraq offer some hope for partial relief. The next significant development will depend on whether the funds tied to the Islamabad Memorandum are released and on progress in Iranian-Iraqi negotiations.
