The basic question in this article is: “What role has oil played in the economic development of Iran?” The article, therefore, delves into the relation between oil revenues and economic development in Iran.In order to clarify this relation, it first reviews the trends of fluctuations of oil revenues as well as economic transitions in Iran, before and after the revolution, in accordance with the published reports. This whole was packed into a compilation of library research to respond to our basic question.Secondly, VAR model was employed to analyze the correlation between economic growth-as the main indicator of economic development- and oil revenues.It is concluded that oil has been a pioneer sector in Iranian economy. It was first the reason for Unbalanced growth and, later, influenced other sectors and led to relative development of the country. Thus, it is reasonable to analyze Iranian model of development using the Unbalanced growth model adapted from Hirsh man theory.Since Iran’s development in 2025 will aim at establishing an optimal society envisaged in the Constitution and 20-year perspective and will include a comprehensive human development, this article recommends “Simultaneous utilisation of oil revenues with provision of the grounds for social, political, and environmental development” as the optimal strategy.