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Home >> Opinion
UPDATED: 11:29, June 03, 2006
Oil: leading Iran to success or failure?
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Oil is an ace up Iran's sleeve. Any sign of turbulence in the fourth largest oil producer of OPEC will disturb the international crude market and thus put the West on jitters.

Oil is also Iran's Achilles' heel. The big refined oil importer, as well as a big crude exporter, will face severe challenges if economic sanctions cut off gasoline imports. That underlies Iran's eagerness for nuclear power development.

The high international crude prices hovering around 70 US dollars per barrel this year has benefited Iran greatly, making its petrodollar special fund hitting a record of 24 billion US dollars.

An AP journalist in Tehran said that it was a long-held dream of the Iranian government to accelerate its economy and build an economic power in the Middle East. But the US blockade and restrain have denied its access to foreign investment and advanced technologies.

In this case, the rising oil prices on the world market inflates Iran's forex holding and heats up the domestic investment. The capital shortfall has been eased in this way.

In the meantime, Iran is also a big refined oil importer with 40 percent of its 75 million liter gasoline consumption per day coming from other countries.

For the Iranian people, especially the younger generation born after the Islamic Revolution in 1979, cars are part of their life and transportation basically depends on trucks.

Auto possession is still increasing there, leading to much reliance on imported gasoline.

An official with the National Iranian Oil Company also recognized that it was a paradox in Iran's economy with oil being both its strongest and weakest point.

Western countries apparently also have realized that. A article titled How to stop Iran without firing a shot on the Wall Street Journal by Bret Stephens proposed four initiatives beyond military actions to deal with Iran, including "a gas quarantine".

In European Union's package of addressing the Iran nuclear issue, embargo on refined oil is also one of the possible punitive measures in the case of Iran's rejection to the package.

By People's Daily Online

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