TEHRAN, IRAN – As it faces the threat of global sanctions from the United States and Europe over its suspected nuclear weapons program, Iran is fighting back with a powerful weapon of its own: its vast oil and gas resources.
Iran’s ruling clerics are meticulously arranging energy sales and building partnerships with influential countries, including China and India, as a way to win stronger friendships around the world.
This complicates the Bush administration’s attempt to isolate Iran, which holds 10 percent of the world’s oil deposits and has the second-largest gas reserves.
High-profile talks with European negotiators continue over the future of its nuclear program, as does the background threat of U.N. sanctions and U.S. action.
But in the meantime, Iran has approached China and India, two of the largest and most dynamic consumer markets, and promised them long-term supplies of gas and access to oil exploration.
In addition, Iran last year granted Japan, traditionally its largest customer in Asia, even greater access to oil.
There is no guarantee, however, that Iran’s clients will turn into political allies. Moreover, Iran’s ability to buy friendships is undermined by its limitations.
While the country pumps close to 4 million barrels of oil a day, it spends $2 billion each year to import fuel because its lacks refining capacity. Then it spends another $3 billion to subsidize gasoline it sells locally at one of the lowest prices in the world — 8 cents a liter, or about 30 cents a gallon.
And nearly a third of Iran’s production is unavailable for export because it is tied up in domestic consumption, where much is squandered by inefficient cars, badly insulated homes or wasteful industries.
(New York Times)
