Iran V: Sanctions
Competition
AHC
March 16
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, 2012 The location of these reserves, Iran’s pipelines and export facilities, and key potential targets in Iran’s petroleum system are shown in Figure V.2. Massive oil and gas reserves do not translate into national wealth unless they are produced and sold. Iran only had a per capita income that the CIA estimated at around $12,200 even before the US and Europe imposed new and far more Draconian sanctions in late 2011 and early 2012. Iran’s per capita income ranked 84th in the world and was by far the lowest rank of any major oil producer in the Gulf. Iran also had an unemployment level in excess of 15%, and youth unemployment somewhere between 20-30% -- when acute underemployment was taken into account. Some 18.7% of the population was below the poverty line, and Iran’s middle class and business class had already suffered from years of inflation, state intervention, and government corruption.27 The US Energy Information agency estimates that Iran received some $73 billion in petroleum export revenues in 2010, and $959 in per capita revenues – roughly one twelfth of the entire per capita income.28 Oil revenues were Iran’s only major source of hard currency, and the CIA estimates that they account for 80% of all Iranian exports in 2011, or some $78 billion out of a total of $131.8 billion in annual exports. Their value was roughly equivalent to the nation’s entire total for imports in 2011 ($76.1 billion.). The Iranian economy could not function without them, and is sufficiently marginal so every dollar equivalent matters – particularly since Iran’s reserves only totaled some $109.7 billion at the end of December 2011.29
Sanctions and Oil Production Capacity Sanctions and embargoes can affect two major aspects of Iran’s energy income: its ability to develop its reserves and maintain or increase its export capacity, and its actual exports. Experts disagree over both the impact of sanctions to date, and Iran’s broader problems in maintaining and increasing its production capacity. Iran naturally denies such problems and advocates of sanctions tend to make exaggerated claims. The US Energy Information Agency seems to be relatively neutral, and it makes public analyses that seem to track broadly with in house OPEC and IEA studies. In the case of oil, EIA reporting in February 2012 noted that,30 … As per the Iran Transactions Regulations, administered by the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC), U.S. persons may not directly or indirectly trade, finance, or facilitate any goods, services or technology going to or from Iran, including goods, services or technology that would benefit the Iranian oil industry. U.S. persons are also prohibited from entering into or approving any contract that includes the supervision, management or financing of the development of petroleum resources located in Iran. See OFAC’s Iran Transactions Regulations page for more information.
CIA, World Factbook, “Iran,” March 8, 2102, https://www.cia.gov/library/publications/the-worldfactbook/geos/ir.html 27
28
EIA, OPEC Revenues Factsheet, ttp://www.eia.gov/cabs/OPEC_Revenues/Factsheet.html.
CIA, World Factbook, “Iran,” March 8, 2102, https://www.cia.gov/library/publications/the-worldfactbook/geos/ir.html 29
EIA, DOE, Country analysis http://205.254.135.7/countries/cab.cfm?fips=IR
Briefs,
30
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“Iran,”
February
17,
2012,