Iran faces crisis as its oil exports drop, threatening the country's stability

[seemslikeadream]

http://www.chron.com/disp/story.mpl/front/4425815.html

Dec. 26, 2006, 7:21AM
Iran faces crisis as its oil exports drop, study says
Loss of revenue is threatening the country's stability

By BARRY SCHWEID
Associated Press


WASHINGTON — Iran is suffering a staggering decline in revenue from its oil exports, and if the trend continues income could virtually disappear by 2015, according to an analysis published Monday by the National Academy of Sciences.

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, said in the report and in an interview.

Iran earns about $50 billion a year in oil exports. The decline is estimated at 10 percent to 12 percent annually. In less than five years exports could be halved and then disappear by 2015, Stern predicted.

For two decades, far longer than its designation by President Bush in January 2002 as part of the "axis of evil," the U.S. has deployed military forces in the region in a strategy to pre-empt emergence of a regional superpower. Iraq was stopped in the 1991 Persian Gulf War, but a hostile Iran remains a target of American threats.

The U.S. military exercises have not stopped Iran's drive. But the report said the country could be destabilized by declining oil exports, hostility to foreign investment to develop new oil resources and poor state planning, Stern said.

[Joanne98]

1. But if oil prices go up they can sell less oil and make the same profit.

The person who wrote this needs to take a math class.

[Tempest]

2. Allow me to be the first to say Roger Stern is an idiot and liar

Iran's oil revenues are up 15% for the first 8 months of 2006.
http://www.gulf-daily-news.com/Story.asp?Article=164417&Sn=BUSI&IssueID=29269

Iran estimated revenues of $16 billion, but received $35 billion for 2006.
http://www.iranian.ws/cgi-bin/iran_news/exec/view.cgi/2/4415


He also ignores the Russia/China deals Iran is making, and the fact that Iran has just put 17 new oil tracts up for bid.

Stern didn't even try to hide his ignorance and bias.

[Heewack]

7. Whoa,

Iran faces some serious challenges in regards to their oil future. That is fact. Their oil fields are in decline. They could be helped with outside help but they have refused that so far. Give the rate of decline at its current pact Iran will be facing some serious issues in the coming years. These new contracts going up for bidding are 5-8 years off at least. They have been kept afloat by the higher prices as their production has continued to shrink.

That article that you linked from www,iranian.ws in 2004 proves the point even further that their extraction capacities are dropping very fast.

[Tempest]

10. All Middle Eastern countries face serious challenges

Saudi Arabia and Kuwait's oil ministries issued reports their oil fields are in decline. Why is Iran singled out?


"They could be helped with outside help but they have refused that so far."

Blatantly false.

Iran has been making energy production deals for oil and natural gas with Russia and China for the last 5 years. Iran recently opened up 17 new oil tracts for development by FOREIGN COMPANIES.

[Heewack]

12. Iran is singled out because of their posture.

The moderate ME countries want nothing to do with Iran.

Russia and China don't have the technology, extpertise or the money to help them with those deals. "Energey production deals". Those are promises for future production. It does nothing about extraction. Those will not be developed by an Chinese or Russian company. The problem Iran faces with their bread winning fiels is that only Exxon, Chevron, or a Shell could save those fields from collapse.

As far as other ME countries, yes they are also facing declines but not to the extent of 10% a year. That is dramatic. The other factor is that they are working with the best technology to keep those fields vaible as Iran isn't.

[Tempest]

13. If the so-called "moderate" countries want nothing to do with Iran

Why don't they kick Iran out of OPEC? LOL! I await your answer.

And what do you consider "moderate" ME countries? Saudi Arabia, where women are second class citizens and is ruled by a monarchy?



"Russia and China don't have the technology, extpertise or the money to help them with those deals."

So Russia, who has been successfully producing oil for decades, doesn't have the expertise?

China doesn't have the money?

LOFL!

You really need to get caught up with what's happening outside of your own borders.


"Those are promises for future production. It does nothing about extraction."

The deals are ALL about extraction. They're for oil and natural gas fields that are NOT CURRENTLY IN PRODUCTION.


"The problem Iran faces with their bread winning fiels is that only Exxon, Chevron, or a Shell could save those fields from collapse"

So only an American company can save them? Despite the fact there are other companies in other countries with a better track record than Exxon, Chevron and Shell?

Sounds like you only want the U.S. to continue to exploit other countries.


"The other factor is that they are working with the best technology to keep those fields vaible as Iran isn't."

You don't suppose the decades long embargo against Iran has something to do with it, do you?

Christ, that's like saying the U.S. embargo against Cuba hasn't been a factor in why Cuba hasn't progressed further than they have.

[Roland99]

16. Wouldn't his view then paint Iran's efforts at nuclear power instead of arms?

[MrPrax]

3. National Academy of Sciences?

Does this outfit usually provide the US government with 'war advice'?

But they DO let the cat out of the bag nicely:

the U.S. has deployed military forces in the region in a strategy to pre-empt emergence of a regional superpower. Iraq was stopped in the 1991 Persian Gulf War, but a hostile Iran remains a target of American threats.

Oh so it WAS about oil --

The analysis supports U.S. and European suspicions 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."

Oh so the Iranian are not that irrationally insane -- nuclear power might be something they have a legitimate use for -- just like they say.

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.

So the ONLY evidence they found is that Iran is below it's ASSIGNED OPEC quota by 300,000 and they interpret this as longterm sign?

I think it is a little premature to imply the Bush sanctions a success -- but Hey if it makes the Houston Chronicle stop worrying about Iran and believes it will simply crash and burn like the Soviet Union, then by all means, believe away -- it's safer for both Iranians and Americans.

[4dsc]

5. Its called peak oil production

You ask "So the ONLY evidence they found is that Iran is below it's ASSIGNED OPEC quota by 300,000 and they interpret this as longterm sign?

YES this is a long term sign as its a sign of peak oil! It happened to the second largest oil field in the world in Kuwait and its happening all over the world.. Are you still in denial??

[Ezlivin]

6. Bingo! What do you do when the oil starts running out?

You do like Iran is doing: You start building a new energy infrastructure.

[MrPrax]

8. No it's not...

Iran's actions are no more tied to 'peak oil' than the US or anyone else. To base an analysis on OPEC projections is joke science -- OPEC quotas are political, not scientific.

Iran has major agreements for oil with China and Russia. That stuff isn't under OPEC quotas so exactly what it is these Science guys are speculating upon is dubious to say the least. Yeah maybe they are 300,000 barrels below OPEC, but have added half a million to the Chinese order.

The soviet union used to use the Shah's pipeline all the time to export their oil to the spot markets. They have done that since the 60s. In fact, that is why most offshore banking havens came into being in old British colonies -- to launder the growing pool of 'petro-dollars' from the Soviet economy.

Seriously -- with decades of uncounted oil flowing from Russia and Iraq's oil mostly stolen and never accounted for not to mention the tight-lipped US supply -- how can anyone seriously take a report claiming that a country with one of the world's largest supply of oil might be in a financial crisis in 2015?

If the US invades, then well yeah, there probably will be a crisis in 2015. No doubt about that.

[Heewack]

9. You are correct about peak oil

But the contracts wilth Russia and China mean little to nothing because those countries are dearth with the know how and capital thatthe U.S. firms have. It's the same thing that happened with Chavez. He kicked out Exxon and now his fields are going to crap.

[Tempest]

11. So let me get this straight

Venezuela's production is falling because they kicked Exxon out, but everyone else's production is falling (according to you) because of peak oil concerns.

Do your ass get sore straddling that fence you're sitting on?


Funny how in your posts pro-U.S. countries are suffering from peak oil problems but anti-U.S. country's oil fields are suffering from political problems.

[Heewack]

14. No, that's not correct.

Peak oil has little or nothing to do with any of it. I think it's a terribly constructed conspiracy. The problem is that the vast majority of fields over there need reworking. The more moderate states have allowed the help from Western oil companies to increase the efficiency of their fields while Iran has not, and hence why their fields are in more serious decline as a percentage.

Since we are talking pro and con, what interest do you have in being pro-Iranian to the extent of calling someone a liar? Any peace loving person sahould see this bit of news as a positive all the way around.

[Heewack]

15. Maybe if I looked at Iran as a tool..

... to stymie American hegemony in the ME I would be more pro-Iranian government.

[belab13]

4. wow UN sanctions a success already! thats amazing .

[seemslikeadream]

17. Oil Falls As Warm Weather Overcomes Iran Nukes

http://www.forbes.com/markets/currencies/2006/12/26/oil-weather-update-markets-energy-cx_ps_1226markets04.html

On Monday the U.S. National Academy of Sciences, which provides research assistance to the government, reported that if Iran’s already-dismal economy worsened, the country would become unstable and its oil industry crippled.

In less than five years exports could be halved and then disappear by 2015, the economic geographer Roger Stern said in a weekly journal published by the academy, and Iran was still neglecting to reinvest in its oil production.

"What they are doing to themselves is much worse than anything we could do," Stern added.

[daleo]

18. Iran seems to be doing ok for money

If you believed the U.S. media, every other country in the world is a perpetual basket case, or a looming economic catastrophe. For example, I can't remember a time when Europe wasn't sclerotic or failing, according to U.S. reports. The same for Japan. I have grown cynical about these types of stories. They seem to have a large propaganda element.