President Barack Obama has issued an executive order, which imposes sanctions on the Iranian rial for the first time.
The announcement of the latest round of sanctions, which are designed to increase pressure on Tehran to abandon its nuclear programme, could be related to the upcoming presidential election in which Saeed Jalili, Iran’s top nuclear negotiator and person close to the Supreme Leader Ayatollah Ali Khamenei, is a front-runner.
Mr Jalili is unwilling to compromise on the nuclear issue, saying that as president he will fiercely resist pressure from the West. He argues that a policy based on resistance could lead to the circumvention of international sanctions.
Iran has the world’s fourth-largest proven oil reserves (155 billion barrels) and second-largest gas reserves. Net oil export revenues amounted to about 69 billion dollars in 2012, down from 95 billion dollars in 2011. Oil makes up 80 per cent of total export earnings and up to 60 per cent of government revenues.
The European Union approved an oil embargo on Iranian oil in January 2012, taking effect from July 1st. European refineries, which had imported about 500,000 barrels of Iran’s oil a day, had to find alternative suppliers (EU member states accounted for about 20 per cent of Iran’s oil export). In August 2012, oil production dropped below that of Iraq for the first time since 1989, when Iran was recovering from the impact of the Iran-Iraq war. The 2012 production level was about 17 per cent below the level saw in 2011.
According to EIA data, Iran produced about 4.2 million barrels per day and exported 2.5 million barrels a day in 2011. In 2012, oil export declined by 39 per cent to 1.5 million barrels per day, while production dropped to about 3.5 million barrels per day.
photo: David Holt
