Study: Oil crisis looming in Iran

Iran could need nuclear power as badly as it claims, a US researcher says.

    Iran's need for nuclear power might be genuine as its oil production is falling, a US report says [AFP]

    Writing in the respected Proceedings of the National Academy of Sciences of the United States, the professor of geography and environmental engineering said Iran's oil problems have the potential to topple the clerical government.

     

    Stern said there was no reason to doubt US-led accusations that Iran's drive to develop nuclear energy has more sinister ends in mind, to entrench the regime in power and fend off US military hegemony in the Gulf region.

     

    "But it cannot be inferred from this that all Irani(an) claims must be false," he said.

     

    "The regime's dependence on export revenue suggests that it could need nuclear power as badly as it claims."

     

    Oil deficiencies

     

    Many of Iran's oil deficiencies are of its own making, Stern says, noting that generous domestic subsidies for petrol mean that Iran's national oil company cannot make money at home and so needs to export as much as it can.

     

    But rapid population growth means that domestic demand is rising all the time, while authorities have let their refineries and pipelines fray.

     

    "The regime's dependence on export revenue suggests that it could need nuclear power as badly as it claims"

    Roger Stern,
    Johns Hopkins University professor

    So Iran, despite being the second-biggest exporter in the Organisation of the Petrol Exporting Countries (Opec) behind Saudi Arabia, actually has to import oil products like petrol to cope with demand.

     

    Stern calculated that since 1980, energy demand in Iran has risen 6.4 per cent, exceeding supply growth of 5.6 per cent. Exports meanwhile have stagnated since peaking in 1996.

     

    For at least 18 months, Iran has failed to meet its quota for oil production set by Opec, he said.

     

    The strong suggestion, Stern said, is that Iran's oil production is now actually falling, despite the bonanza that exporters have enjoyed from a period of record-high crude prices.

     

    And a nationalistic authorities are fuelling the problem by making life ever-harder for foreign oil companies, he said.

     

    Contractual problems

     

    Stern noted sudden contractual problems faced by India in its bid to negotiate for supplies of Iranian natural gas, after New Delhi failed to vote with Tehran at a meeting of the UN atomic watchdog.

     

    He said: "Iran's petroleum investment climate therefore appears to have greatly deteriorated since 1998-2004, a period when investment was insufficient to offset the recent production decline.

     

    "Zero future foreign investment thus appears plausible."

     

    Overall, according to Stern, it "seems plausible that Iran's claim to need nuclear power might be genuine, an indicator of distress from anticipated export revenue shortfalls.

     

    "If so, the Irani regime may be more vulnerable than is presently understood."

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    From Zimbabwe to England: A story of war, home and identity

    The country I saw as home, my parents saw as oppressors

    What happens when you reject the identity your parents fought for and embrace that of those they fought against?

    Becoming Ocean: When you and the world are drowning

    Becoming Ocean: When you and the world are drowning

    One woman shares the story of her life with polycystic kidney disease and sees parallels with the plight of the planet.

    The evening death came for me: My journey with PTSD

    The evening death came for me: My journey with PTSD

    On a gorgeous Florida evening, a truck crashed into me. As I lay in intensive care, I learned who had been driving it.