Production trends and revenue in petrochemical industry
Official data shows that the production of petrochemical products in Iran has increased from 12 million tons in 2001 to 80 million tons in 2024. Alongside this considerable increase in production volume, the revenue from both domestic sales and exports of petrochemical products has also reached $23 billion in 2024. A comparison of these two indicators reveals that, despite a remarkable growth in production volume, the income generated from this industry has not grown proportionately with the increase in production.
In 2011, the industry's production was 43 million tons, with total revenue estimated at $21 billion. This data indicates that in that year, approximately $488 million was generated for every million tons produced. However, in 2024, this figure has dropped to about $287 million. In other words, the economic value per unit of production has decreased, suggesting a decline in the export prices of products or an increase in the share of lower-value products.
Challenges of declining export value
One of the most significant reasons that could explain the decrease in revenue per ton of product is the increase in raw material sales in Iran's petrochemical industry. Despite the rise in global crude oil prices over the past two years, Iran's petrochemical industry has failed to leverage this opportunity to enhance added value. If the ratio of production to income had been maintained from 2011, Iran could have generated approximately $40 billion from this industry in 2024; however, due to the decline in added value, this figure has been limited to $23 billion.
This situation highlights the urgent need for the development of downstream industries and a shift towards producing higher-value-added products. While many leading countries in the petrochemical sector have moved towards producing more final products with diverse applications, Iran remains highly dependent on the sale of basic products, which has diminished its share in global markets.
Strategies for improving the petrochemical industry
Transitioning from raw material sales to industrial development requires fundamental changes in the economic policies of this sector. Investment in downstream industries is key to increasing added value. Establishing new value chains and developing units for the production of final products such as polymers, specialty chemicals, and advanced compounds can strengthen Iran's position in global markets.
Optimizing resource consumption and increasing productivity are other necessities on this path. The use of modern technologies in refineries, optimizing production processes, and reducing operational costs can enhance the competitiveness of Iranian products on an international scale. Additionally, attention to environmental standards and reducing pollution can create a conducive environment for attracting foreign investments in this sector.
Export markets also require reassessment. An excessive focus on a few limited destinations increases economic risk. Entering new markets, signing long-term trade agreements, and utilizing diplomatic capacities to create export opportunities can help bolster Iran's position. Furthermore, focusing on emerging technologies, such as green petrochemicals and the use of renewable raw materials, can enhance the competitive advantage of Iran's petrochemical industry globally.
While Iran's petrochemical industry is on a growth trajectory in terms of production volume, its main challenge lies in the decreasing revenue per ton of produced product. This issue reflects the increase in raw material sales and insufficient development in the downstream industries. To reach an optimal position in global markets, the strategies of Iran's petrochemical industry must shift towards producing higher-value-added products.
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