After the Nationalization of the oil industry in Iran in 1951, the government passed protectionist laws that restrain foreign ownership of Iran’s oil fields and industries. Since the Islamic Revolution in 1979, these laws were reinforced and further reflected the anti-Western ideological underpinnings of the revolution. Yet, after the Iran-Iraq war and the beginning of the era of so-called “reconstruction” in 1988, the Iranian government adopted several laws to encourage foreign investment, particularly in the country’s largest industry, oil and gas. These laws, particularly Foreign Investment Promotion and Protection Act (FIPPA), despite having been revised several times, have not been successful in encouraging foreign companies to invest in Iran’s oil and gas industries and have not fulfilled Iran’s ambition to expand country’s oil and gas industries. The recent developments in Iran’s relations with the West, especially the United States and 5+1 countries, the Iranian oil ministry announced that it will issue a new generation of oil and gas contracts that will be more attractive to the foreign investors. This paper investigates possible challenges that Iran protectionist laws may pose for these contracts particularly in light of Iran’s prevailing political and religious anti-West/anti-imperialist ideology and Iran’s distrust towards the West after the fall of Mossadegh’s government in 1953. I will also study Iran’s political and legal realities and the what they might provide foreign investors with attractive incentives such as partial or conditional ownership of the industries in which they invest.