Iran’s petroleum sector relies heavily on arbitration as the primary method of resolving disputes arising under Iran Petroleum Contracts (IPCs), particularly those involving sensitive exploration and production (E&P) oil field projects. This article provides a comprehensive doctrinal analysis of the ad-hoc arbitration agreement contained in IPC Appendix P, demonstrating how it adapts international procedures, principally the UNCITRAL Arbitration Rules—to the specific requirements of Iran’s legal system. Through detailed examination of statutory frameworks, including the Law on International Commercial Arbitration (LICA) and constitutional constraints imposed by Article 139, the research exposes the procedural, jurisdictional, and enforcement challenges faced by parties engaging in petroleum arbitration in Iran. It further scrutinises the IPC’s multi-tier dispute resolution architecture, incorporating negotiation, ADR, ministerial review, and arbitration, and highlights the unique features of Iran’s arbitration landscape, such as the mandatory application of Iranian law and restrictions on damage types. The study compares Iranian practice with international standards and identifies both areas of convergence and structural divergence. The article concludes with practical recommendations for contract drafters, counsel, and arbitrators navigating disputes under IPCs, focusing on arbitrability approvals, procedural efficiency, enforcement strategy, damages assessment, and tribunal selection.