Tuesday, December 26, 2006

Analysis of Iran's Falling Oil Exports

Iran's oil exports are falling. Falling exports means falling profits and a growing inability over the next ten years for Iran to finance mischief. The issue is complicated for a number reasons, but it once more provides Bush with a diplomatic opportunity. But Bush tends to be blind when diplomatic opportunities stare him in the face. Here's an analysis as reported in The Plain Dealer by Barry Scweid of AP:
Iran is suffering a staggering decline in revenue from its oil exports, and if the trend continues, the income could virtually disappear by 2015, according to an analysis published Monday in a journal of the National Academy of Sciences.

Roger Stern, an economic geographer at Johns Hopkins University, said in the report and in an interview that Iran's economic woes could make the country unstable and vulnerable, with its oil industry crippled.

(snip)

Stern's 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."

He said oil production is declining and gas and oil are being sold domestically at highly subsidized rates.

At the same time, Iran is neglecting to reinvest in its oil production.

"With an explosive demand at home and poor management, the appeal of nuclear power, financed by Russia, could fill a real need for production of more electricity," the report said.

It's ironic that Bush's foreign policy and energy policy have strengthened Iran and weakened the United States. If we had never gone to war in Iraq, Iran's oil problems would be more serious than they are and a real energy policy would have us on the way to being relatively free of the oil politics of the Middle East. Five years ago, Iran helped us in Afghanistan but Bush failed to take advantage of the opportunity to improve relations. Clearly, Bush's way doesn't work.

The more one reads, the more it becomes obvious that James Baker and the Iraq Study Group make far more sense than the president. The Baker report is not without flaws but it urges the president to begin talks for a regional settlement and that is something that would improve our situation far more than a repackaged agenda of 'stay the course' or a disastrous bombing campaign against Iran.

Richard Nixon was the ultimate Cold War hawk but he managed to improve relations with Russia and China. Bush only has to deal with Syria and Iran, though it would help if he would bring in some serious foreign policy heavy-weights. But more of the same just isn't acceptable.

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