Iran's oil weakness

Mon, 12/04/2006 - 1:18pm

Take a time out from your Monday routine and spend five minutes with a geopolitical nugget about chinks in Iran's petro-armor from the latest issue of BusinessWeek.  

...Iran has a surprising weakness: Its oil and gas industry, the lifeblood of its economy, is showing serious signs of distress. As domestic energy consumption skyrockets, Iran is struggling to produce enough oil and gas for export. Unless Tehran overhauls its policies, its primary source of revenue and the basis of its geopolitical muscle could start to wane. Within a decade, says Saad Rahim, an analyst at Washington consultancy PFC Energy, "Iran's net crude exports could fall to zero."

In a recent issue of FP, Newsweek's Middle East editor Christopher Dickey wrote about this very problem in "The Oil Shield." His argument: Iran knows its oil leverage is running out, especially because the Saudis are looking to reassert their power in the energy markets. That small window of influence is what drives Iran's timetable for a nuclear shield, he writes, because without its oil shield or the cover of diplomatic protection, Iran begins to look very vulnerable. 

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