posted on Oct, 4 2005 @ 10:19 PM
Originally posted by Odium
They know they can cause enough problems in the short-term by doing these and it helps force the issue away from them [by causing internal division
between their 'enemy'.]
Also they know we will need the oil in the long run, so someone will buy it from them even if they do not wish to buy it.
I used to agree fully with that premise now I’m not so sure; however there are some issues surrounding the short term events concerning Iran which
have direct influence on the intermediate and long term. There are many issues at play, but I’ll speak to the surface, where I began to look
differently at Iran (so to speak).
Yes the oil is there, but without development it will likely stay there.
My take in brief is that Iran relies heavily on outside investors to develop its’ oil fields, Iran’s investment packages are not very attractive
(strictly ‘buy back’ by law). Currently the Kuwaiti’s and the Saudis are in discussion concerning continued joint development e.g. Arash field,
which all well and good. Shell, the Japanese consortium and Brazil have had their ‘smaller’ investment fields have come online.
Most ‘would be’ investors have retracted or stalled with the ‘nuke’ scare and remaining potential investors are looking to Iran with a
suspicious eye as to their current behavior. Nations such as Japan moved away from future commitments and have purchased the lion’s share of Libyan
blocks. Dutch Shell and India have moved billions and billions in developing the Eastern Russian fields and are now looking to develop pipelines to
service eastern Asia as well as the United States (oil and LNG). Iran is not getting the necessary investiture for the significant increase in
production and did not meet her OPEC production quota last year. Iran spends, currently US$ 3 billion in keeping its production running at current
levels But the bottom line is, if the oil is not coming out of the ground there is nothing to sell.
Iran’s domestic economy is also tied by gasoline imports. Iran imports annually and estimated US$ 4 billion in gasoline (some sources state as high
as US$ 7 billion) as it refinery capacity is overtaxed/capped running at a rate which is far less than domestic demand which is growing at an
estimated 8-9% a year. Her unemployment rate runs at 16-21%. New refineries will not go on line until 2010. Iran is also projected to import US$ 20
billion in gasoline over the next four years to keep up with domestic demand. Currently she is reported to be rationing gasoline and attempting not
to run into diesel and fuel oil shortages this winter. Her economy and infrastucture are far to week and antiquated to back-up her threats and as the
world is dependent on oil...she needs cash.
I do believe Iran is positioning, but she does not recognize she is being used.