Insider news & Analysis in Iran

By INU staff

INU -On Monday, the Wall Street Journal reported that a nuclear deal between Iran and the P5+1 was poised to open up a flood of Iranian petroleum to the global oil market. Subsequent reports suggest that Iran is continuing to take significant steps toward taking advantage of this situation to the greatest extent possible. But the same measures seem to double as efforts to break Western sanctions in the event that a deal is not reached, and Iranian officials are certainly presenting their efforts as successful in this regard.

In the first place, the Associated Press reports that Iran announced on Tuesday that it had begun producing more natural gas from a giant field that it shares with the Arab nation of Qatar – a nation that the speaker of the Iranian parliament recently claimed to be expanding economic relations with.

The expansion of operations at the South Pars gas field will supposedly increase Iran’s current 600 million cubic meters per day of output by an additional 81 million cubic meters. The move was specifically heralded by Iranian President Hassan Rouhani as a sign that US-led sanctions on Iran’s oil-based economy had been effective.

Rouhani has previously made similar claims about the expansion of Iran’s uranium enrichment capabilities, noting that the development of new centrifuges occurred in the midst of the sanctions regime. But international analysts generally agree that sanctions have virtually crippled Iran’s economy and were the primary or sole reason for Tehran’s coming to the negotiating table to discuss suspending some nuclear work in exchange for removal of those sanctions.

Nevertheless, at a ceremony for the South Pars expansion Rouhani claimed, “By inaugurating this project, we announce to the world that the era of pressures ... is over.”

At the same event, Rouhani vowed to further expand oil exports, as well. But the accuracy of his declaration and the viability of his vow depend in large part on the removal of the sanctions that Rouhani and other officials insist have had no effect.

Iranian Oil Minister Bijan Zanganeh seems to have tacitly acknowledged that such claims are exaggerated, as he has plainly described the current situation of Iran’s oil industry as “catastrophic.” Furthermore, on Monday Zanganeh described his country’s readiness to expand oil output by up to one million barrels per day, according to Reuters, but only in the event of a nuclear deal leading to the suspension of sanctions.

 

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