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Source: http://www.washingtonpost.com/wp-dyn/content/article/2006/05/18/AR2006051802089.html
Withholding Oil Exports Could Wreak the Most Havoc in Iran
(Washington Post) Steven Mufson - As the UN Security Council ponders sanctions to punish Iran for developing technology that could be used for making nuclear weapons, Iran's president and interior minister have threatened to deploy the oil weapon. But senior policymakers within the Bush administration and their French and British counterparts have concluded that Iran would continue to sell oil abroad even in the face of heightened economic and diplomatic pressure from Western powers. Oil accounts for 85% of Iran's exports, and revenue from those exports makes up 65% of government income. Moreover, in recent years Iran has shifted its oil exports away from the West. It sells substantial amounts to China and India, though Japan, Italy, and France are still the major buyers. None is sold to the U.S. because of sanctions dating to the 1979 hostage crisis. All oil is fungible. "I think that the issue of Iran using oil as an economic weapon has been highly exaggerated," said Abdulsamad al-Awadi, the former head of European operations for Kuwait Petroleum Corp. "From talking to a lot of their officials, I don't believe that they would use the oil weapon unless they were attacked."