On 28 December Schäfer's Esteghlal beat Esteghlal Khuzestan 3–0 and became the first team to reach a total of 900 points in all-time Persian Gulf Pro League table. In the 2018 AFC Champions League, Schäfer's team were drawn against Al-Rayyan, Al Ain and Al-Hilal in the competition's group of death. However, they did not lose a game, topping the group with some impressive performances. On 1 March 2018, Schäfer won his first Tehran derby as a manager in a 1–0 victory; this was also his third win against Branko Ivanković, having previously beaten him twice in 2. Bundesliga with Tennis Borussia Berlin when Branko was the manager of Hannover 96 during the 1999–2000 season. On 3 May 2018, Schäfer extended his contract until June 2020. On the same day, Schäfer won his first trophy with Esteghlal, the Hazfi Cup, when his side defeated Khooneh be Khooneh 1–0, with Mame Thiam scoring the only goal. Esteghlal extended their record of 7 Hazfi Cups.