Analyst's note: Interesting indeed. There are a number of critical strategic points within this article alone well worth considering as we view the wide range of events in the Middle East. Note also that Iran's Ahmadinejad has other troubles as well. It is reported that Ahmadinejad was recently slapped in the face by an Iranian general officer for being "to liberal." We also recently reported that all is not well between Iran and Saudi Arabia with Saudi gaining a nuke to protect itself.
"While Iran has a huge amount of crude oil reserves in its rich fields, its ability to tap those reserves is steadily declining. According to CSIS, Iran is losing between 400,000 barrels per day to 700,000 barrels per day in crude production as its oil fields mature. There’s still plenty of oil down there, but Iran lacks the technology to engage in the sort of enhanced oil recovery practices that more advanced nations use to coax stubborn crude out of the ground. Absent the assistance of the West, Russia or China, oil export revenues could soon disappear. According to the CSIS report:
A 2007 National Academy of Sciences study reports that if decline rates are allowed to continue, Iran’s exports, which in 2007 averaged 2.4 million bbl/d could decrease to zero by 2015. To offset natural decline rates, Iran’s oil fields require structural upgrades including enhanced oil recovery (EOR) efforts such as natural gas injection.
Gasoline is Iran’s other Achilles’ heel. The Islamic Republic is desperately trying to increase its internal refining capacity, with good reason: Iran is much too heavily dependent on outside sources to supply the gas needed to keep its economy stumbling along. From the CSIS report:
Iran’s oil consumption was approximately 1.7 million bbl/d in 2007. Iran has limited refinery capacity for the production of light fuels, and consequently imports much of its gasoline supply. Iranian domestic oil demand is mainly for gasoline and diesel. Tehran imports about 40 percent of its gasoline.
Thus, if the civilized powers – and especially Europe – were to cut off Iran’s access to Western technology and to refined products, the regime in Tehran would be in real trouble. The combination of a loss in oil revenues and a transportation crisis would throw the already troubled Iranian economy into chaos. It might be enough to tip the balance in favor of the millions of Iranians who are already unhappy with the theocratic, reactionary regime ruling their nation. Sanctions could make a real difference in Iran, if the West somehow could find the will and the self-discipline to impose them in earnest. [....]"
