Iran oil exports may disappear :: Namibia Internet Gateway cc ::

Articles: Iran oil exports may disappear

Posted by admin on Tuesday, December 26, 2006 - 05:14 PM

26/12/2006 15:06 By: Barry Schweid

Washington - Iran is suffering a staggering decline in revenue from its oil exports, and if the trend continues income could virtually disappear by 2015, according to an analysis released on day by the National Academy of Sciences.

Iran's economic woes could make the country unstable and vulnerable, with its oil industry crippled, Roger Stern, an economic geographer at Johns Hopkins University, said in the report and in an interview. Iran earns about $50bn a year in oil exports. The decline is estimated at 10 to 12% annually. In less than five years exports could be halved and then disappear by 2015, Stern predicted. For two decades, far longer than its designation by President George W. Bush in January 2002 as part of the "axis of evil," the United States has deployed military forces in the region in a strategy to pre-empt emergence of a regional superpower. Iraq was stopped in the 1991 Persian Gulf War, but Iran remains a target of US threats. The US military exercises have not stopped Iran's drive. But the report said the country could be destabilised by declining oil exports, hostility to foreign investment to develop new oil resources and poor state planning, Stern said. Nuclear power for civilian purposes?The analysis supports US and European suspicions that Iran is trying to develop nuclear weapons in violation of international understandings. But, Stern says, there could be merit to Iran's assertion that it needs nuclear power for civilian purposes "as badly as it claims". He said oil production is declining and both gas and oil are being sold domestically at highly subsidised rates. At the same time, Iran is neglecting to reinvest in its oil production. "With an explosive demand at home and poor management, the appeal of nuclear power, financed by Russia, could fill a real need for production of more electricity." Iran produces about 3.7 million barrels a day, about 300 000 barrels below the quota set for Iran by the oil cartel, the Organisation of Petroleum Exporting Countries. The shortfall represents a loss of about $5.5bn a year, Stern said. In 2004, Iran's oil profits were 65% of the government's revenues. "If we look at that shortfall, and failure to rectify leaks in their refineries, that adds up to a loss of about $10bn to $11bn a year," he said. "That is a picture of an industry in collapse." 'US should hold its breath' If the US can "hold its breath" for a few years it may find Iran a much more conciliatory country, he said. And that, Stern said, is good reason to belay any instinct to take on Iran militarily. "What they are doing to themselves is much worse than anything we could do," he said. Stern said: "The one thing that would unite the country right now is to bomb them. Here is one problem that might solve itself."

· 110 Reads ·