Interesting prespective n add on to our discussion on oil producing states like Iran

Discussion in 'IntroSpectrum' started by BeEgEe, Dec 25, 2006.

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  1. BeEgEe

    BeEgEe El Warm Shot

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    WASHINGTON (AP) -- Iran is suffering a staggering decline in revenue from its oil exports, and if the trend continues income could disappear by 2015, a National Academy of Sciences analysis found.

    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, wrote in the report published Monday.

    Iran earns about $50 billion a year in oil exports.

    The decline is estimated at 10 to 12 percent annually.

    In less than five years exports could be halved, Stern predicted.

    For two decades, the United States has deployed military forces in the region in a strategy to pre-empt emergence of a regional superpower.

    Iraq was prevented from growing into a major power in the area in the 1991 Persian Gulf War.

    But a hostile Iran remains a target of U.S. threats.

    The U.S. military exercises have not stopped Iran's drive.

    But the report hostility to foreign investment wishing to develop new oil resources could destabilize Iran, Stern said.

    Stern's analysis, which appears in this week's edition of the Proceedings of the National Academy of Sciences, supports U.S. and European su••••ions 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 subsidized 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 Organization of Petroleum Exporting Countries.

    The shortfall represents a loss of about $5.5 billion a year, Stern said.

    In 2004, Iran's oil profits were 65 percent 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 $10 billion to $11 billion a year," he said. "That is a picture of an industry in collapse."

    If the United States 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.

    "The one thing that would unite the country right now is to bomb them," Stern said. "Here is one problem that might solve itself."
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