The Atlas Lions dominated the opening exchanges in St Petersburg but were made to pay for some wasteful finishing when substitute Aziz Bouhaddouz put through his own goal deep into stoppage time.
St Pauli forward Bouhaddouz was inconsolable as team-mates slumped to the turf around him and Renard was still struggling to make sense of it all at his post-match news conference.
"If I had come to this press conference with a draw I would have been disappointed, so you can imagine what the defeat means when we had quite a lot of opportunities," he said.
"It is the worst thing that could have happened in additional time.
"We missed a lot of technical precision. Sometimes we lost balls and that was unusual.
"The Iranians had a formation that we did not expect. They were playing a lot of long balls in order to get the second balls
"It was a specific type of football that we had to play but the winner is always right.
"As long as there are still two matches, whoever the opponents are, there is still hope."
Schalke winger Amine Harit dazzled when Renard's men were in the ascendancy but wasted some clear openings, meaning his receipt of the Man-of-the-Match award was somewhat hollow.
"Of course, I would have preferred not to have Man of the Match and win the match. It would be the same thing for any other player," Harit said before taking his share of the blame.
"We had opportunities but were not efficient and I'm the first in line there. We should have done better.
"We have difficult matches coming up and it’s up to us to have honourable results. We are going to have to forget today's defeat."