The United States and the European Union have been making plans to further increase the sanctions put on Iran. These sanctions were put in place as an attempt to curb Iran's nuclear program. On Tuesday, Iran stated that it would stop oil exports if pressure from Western sanctions got any tighter. Iran claims that they have a "Plan B". Iranian Oil Minister Rostam Qasemi told reporter in Dubai that, "We have prepared a plan to run the country without any oil revenues...If you continue to add to the sanctions we (will) cut our oil exports to the world...We are hopeful that this doesn't happen, because citizens will suffer. We don't want to see European and U.S. citizens suffer."
Sanctions have already brought Iran's oil exports from 2.2 million barrels per day (bpd) in 2011 to a new low of 860,000 bpd in September of this year. According to calculations, Iran is making around $95 million from daily crude sales. This is about $147 million less than what it was making last year.
People are skeptical of Iran's threat to stop oil exports. Carsten Fritsch of Commerzbank says, "What else can they export to generate the necessary revenues?" The U.S. government estimates that crude sales provide about half of the Iranian government's revenue and that oil and oil products make up nearly 80% of the country's total exports. Leo Drollas, Chief Economist at the Centre for Global Energy Studies, says, "It's just making noise. It would be like cutting off their nose to spite their face."
By Abigail Van Hook
No comments:
Post a Comment