With the United States putting sanctions on Iran’s oil production, a move that has driven a wedge between Washington and its European allies, National Security Advisor John Bolton has weighed in yet again on Iran as shown here:
Here’s a quote:
“I think the sanctions in the aggregate are already having an enormous effect on Iran. You know, when the president announced we were withdrawing from the Iran nuclear deal in May of this year, big businesses that had prospects or even some trade and investment with Iran weren’t going to wait for the sanctions actually to take effect. They’ve pulled out. They’ve cut back in many ways, and I think we’ve already seen the consequences in Iran. The rial, the currency’s declined about 70 percent since the sanctions, inflation has quadrupled, the country is in recession. You’re seeing riots and demonstrations all around the country just provoked by ordinary citizens. So I think this is going to cut into Iran’s ability to continue their nuclear program, the financed terrorism, and to engage in military activity around the Middle East, and I think we’re already seeing that.”
One would almost get the impression that Mr. Bolton is positively gleeful over the suffering that American-led (American-forced) sanctions have created for Iranian civilians.
When looking at the oil import waivers which have been generously granted by Washington to China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey, here’s what Mr. Bolton had to say:
“The aim is to drive Iranian oil exports to zero. We’re working with other countries to get alternative supplies for countries that are buying and I think that’s critical over an extended period of time.
…I think we’ve said for a long time, zero should mean zero. But some countries that, for the last three or four years, had been able to purchase oil from Iran needs some time to get down to zero.
…Rick Perry and the Energy department have done a fantastic job since the president pulled out of the Iran nuclear deal to talk to other countries, to get their production up, to find oil that’s suitable for the refineries in countries that had been purchasing from Iran. We’ve ramped up our own production in America. I think we can get to a point where nobody responsible needs to buy oil from Iran.” (my bolds)
Let’s look at some background. According to the U.S. Energy Information Administration, Iran has the world’s fourth-largest proven reserves of oil totalling 157 billion barrels. This is nearly 10 percent of the world’s total crude oil reserves and 13 percent of OPEC’s reserves. In 2017, Iran produced nearly 4.7 million barrels of oil and other liquids per day in 2017.
Here is a map showing Iran’s largest oil fields:
Iran also has 0.5 billion barrels of proved and probable oil reserves in the Caspian Sea but very little upstream activity has taken place to exploit these resources.
Here is a map showing Iran’s oil infrastructure:
Here is a graphic showing how Iran’s oil production has been impacted by sanctions since 2011:
Here is a graphic showing Iran’s monthly crude oil and condensate exports:
Iran resumed exporting oil to Europe in 2016 following the signing and implementation of the JCPOA nuclear deal. At that time, Croatia, France, Greece, Italy, Malta, Netherlands, Poland and Spain resumed their purchases of Iranian oil.
Lastly, here is a graphic showing the destinations for Iran’s oil export in 2017:
With Donald Trump being front and centre in the withdrawal from the Iran nuclear deal, let’s take a quick look at what he had to say about high global oil prices:
If we think that oil prices are high now, just think how high will they climb when millions of barrels of Iranian oil are taken off the market every day, particularly given that global oil demand keeps rising as shown here:
Here’s a quote:
“We have weathered difficult times in the face of 40 years of American hostility relying solely on our own resources, and today we and our partners across the globe will ensure that our people are least affected by this indiscriminate assault in the economic warfare that directly targets the Iranian people.
…the unconditional support for two clients, Saudi Arabia and Israel, blinds the U.S. to their appalling atrocities that have resulted in global indignation and engendered insecurity to us all, the U.S. itself included.”
Seeing that Iran has such massive oil reserves and an oil infrastructure that has been widely undercapitalized over the past forty years, one has to wonder what Washington’s real agenda is in Iran. What exactly is the Trump Administration’s end game? As we all know, sometimes Washington’s political actions result in unintended consequences; in this case, potentially creating the perfect environment for higher oil prices. Additionally, given that Iran has remained a state outside the control of Washington for the Reagan, Bush I, Clinton, Bush II, Obama and Trump Administrations, I would suggest that without drastic actions, Iran’s leadership is not leaving anytime soon.
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