For years, Iran’s petrochemical industry has operated at the intersection of sanctions and intensifying global competition. As the country’s most important non‑oil foreign‑exchange generator, the sector has simultaneously endured some of the harshest financial, technological, and logistical constraints. In this interview with Iran, Abdolkarim Pahlavani, CEO of Pars Petrochemical Company, offers a realistic and strategic assessment of this complex landscape—one that relies neither on naïve optimism about sanctions being lifted nor on defining the industry solely through the lens of “resilience under pressure.”
He argues that the most meaningful post‑sanctions opportunities lie in finance, technology, infrastructure renewal, and market development—areas that have suffered the most under international restrictions. Yet he warns that even if sanctions ease, without a strategic shift from “production‑centric” to “value‑centric” thinking, much of this potential will be lost.
This conversation explores the future of industrial strategy: from the need to prioritize high‑value products such as specialty chemicals and advanced polymers, to the transformative role of emerging technologies like artificial intelligence, additive manufacturing, and biotechnology. In his view, sanctions are not merely an external obstacle but a strategic variable that shapes management, decision‑making structures, leadership selection, and even the industry’s development model.
Ultimately, this interview seeks to answer a central question: How can Iran’s petrochemical sector maintain competitiveness and create sustainable value—whether in an environment of openness or continued restriction?
Question: If sanctions were fully lifted, what would be the most significant growth opportunities for Iran’s petrochemical industry?
The reality is that the architecture of sanctions has become so extensive that speaking of their complete removal is difficult. Still, a comprehensive agreement could lift a substantial portion of restrictions and create opportunities for the petrochemical sector. Experience shows that sanctions have had the greatest impact on finance, technology development, and infrastructure modernization. Therefore, easing sanctions would open space in precisely these areas. Additionally, it would create opportunities for market expansion and upgrading transportation, logistics, and supply‑chain infrastructure.
Question: Which projects or technologies should be prioritized if sanctions are eased?
Answer: Priority should go to projects that meet three criteria simultaneously:
- Higher value added relative to feedstock,
- Lower capital intensity and market risk, and
- Alignment with long‑term global demand trends.
Within this framework, downstream chains, specialty products, engineering polymers, and advanced chemicals should take precedence over merely expanding upstream capacity. At the same time, investment in energy‑efficiency technologies, digitalization, and operational optimization must be treated as core development priorities—not as peripheral add‑ons.
Question: How can sanctions relief be used to expand exports and enter new markets?
Answer: Entering new markets is not achieved simply by increasing sales. It requires stable presence, deep customer insight, and aligning sales structures with global standards. In a post‑sanctions environment, petrochemical companies must move away from opportunistic, short‑term sales models and shift toward long‑term contracts, industrial branding, and active portfolio management. This transition demands stronger marketing capabilities, market analytics, and commercial risk management.
Question: What changes should occur in the value chain and corporate structures if sanctions ease?
Answer: The most important shift is transitioning from a production-centric mindset to a value-centric one. Companies must move beyond fragmented, island‑like structures and make decisions based on the entire value chain—from feedstock to end customer. This shift must be reflected both in project design and in organizational structures and decision‑making systems. Without it, even in a more open environment, many opportunities will be lost.
Question: Should foreign investment and advanced technologies be a priority?
Answer: Absolutely. We are living in an era of technological disruption. Artificial intelligence, for example, is the defining technology of our time, and global investment in it is accelerating. Saudi Arabia and the UAE are rapidly becoming regional AI hubs. This is both an opportunity and a threat for us—an opportunity if we join the movement, and a threat if we fall behind.
A transformation comparable to the first industrial revolution is underway. Production methods are being reshaped, and countries that fail to integrate AI into industry will be left behind. Additive manufacturing, new biotechnologies, and quantum computing—alongside AI—are technologies that will reshape the world and, inevitably, the petrochemical sector.
Another trend we must consider is re-industrialization and rising protectionism which, like globalization before it, will have long‑term consequences. Tariffs will undoubtedly affect petrochemical trade.
Crucially, foreign capital and technology must serve the company’s strategy—not replace it. Investment is valuable only when it brings knowledge transfer, productivity gains, and reduced strategic risk. Otherwise, it may even weaken domestic advantages.
Question: What strategies can reduce the impact of sanctions on production and exports?
Answer: Beyond finding new ways to bypass sanctions and strengthen resilience, continuous dialogue with policymakers is essential. The petrochemical sector cannot be treated merely as a “cash box.” It requires support, attention, and the removal of barriers to production and exports. With the oil industry under sanctions, supporting petrochemicals becomes even more critical.
Expanding trade with neighboring and regional countries is a key option. Fortunately, Iran borders several growing markets—from Central Asia and the Caucasus to the Middle East, the Arabian Peninsula, and South Asia.
The most important strategy is smart diversification —in markets, sales channels, and product portfolios. Operational flexibility, strict cost control, and maximizing domestic capabilities are also vital. Under sanctions, competitive advantage depends less on scale and more on decision quality and speed of response.
Question: How important is domestic technology development and “first‑of‑its‑kind” production?
Answer: Domestic technology development is not a choice—it is a necessity. However, it must be pursued with economic and technical discipline. First‑time production is valuable only when it reduces strategic risk and enhances operational stability—not when it becomes an expensive substitute for foreign technology.
Experience shows that when localization follows a sound techno‑economic approach, results are far more reliable. At the same time, we must guard against opportunistic companies that exploit the “localization” narrative for profit, harming both reputable domestic firms and petrochemical companies.
Question: Can developing alternative markets and cooperating with neighboring countries be part of the solution?
Answer: Absolutely. Regional markets offer strong potential due to geographic proximity and mutual familiarity. Success in these markets, however, requires effective foreign policy, reduced tensions, and active commercial diplomacy.
Question: If sanctions are partially and inconsistently lifted, how should risks and opportunities be managed?
Answer: This mirrors the experience of the past decade: sanctions were not fully lifted, but many were eased. In such a scenario, revisiting the lessons of the JCPOA period is essential—understanding where we succeeded, where we failed, and why. Even with a new agreement, we should not expect a fully normal environment in the short or medium term.
The petrochemical sector must realistically accept that sanctions and their consequences will not disappear overnight. Understanding the precise impact of financial and non‑financial sanctions is essential to mitigating them. In this environment, the most important principles are accurate industry analysis, strategic agility, and decisive action.
Question: What changes in management and strategy are needed to adapt to different scenarios?
Answer: Management systems must appoint the most capable leaders suited to a sanctions environment and avoid political or patronage‑based appointments. Companies must also strengthen and streamline their decision‑making and operational mechanisms.
Question: Under what conditions will Iran’s petrochemical industry be successful over the next decade?
Answer: Success depends on three factors:
- The presence or absence of sanctions,
- Competent management, and
- Effective development strategies.
Without preparing the foundations for success, we cannot expect successful outcomes. If the necessary prerequisites are met, Iran’s petrochemical industry can operate sustainably, competitively, and with reduced vulnerability to external shocks.
Question: Which development paths and products offer the greatest value creation potential?
Answer: The future lies in products with stable demand and strong differentiation potential: specialty chemicals, advanced polymers, and knowledge-based products offer the highest value‑added potential.
Question: How do you view the role of international cooperation and global knowledge networks?
Answer: Industry is inherently global. No country has developed without connecting to global knowledge networks. Even China became the China we know today only after integrating into global trade and knowledge systems in the 1990s.
Why are semiconductors and rare‑earth materials so critical today? Because they are directly tied to cutting‑edge knowledge and technology. Why does Japan subsidize Taiwanese and Korean semiconductor firms to build factories on its soil? Because it recognizes its need for global knowledge.
Countries like Indonesia, Vietnam, Brazil, and Mexico advanced by integrating into global production and knowledge networks. This must be a priority for us as well. Even in the most restrictive scenarios, connecting to global knowledge networks remains essential. Scientific, technological, and even non‑financial cooperation can narrow the technology gap and keep the industry competitive.