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Books on Iran
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Update No: 062 - (25/01/07)
Sanctions are coming
Sanctions against Iran were finally approved by the UN Security Council on
23 December. The resolution bans exports to Iran of parts and material that
could
contribute to Iran's atomic or missile programs. The foreign assets of some
Iranian agencies and individuals will also be frozen as they are alleged to be
involved in the program. Moreover, further measures might follow if Teheran
fails to stop the enrichment of uranium and to fully cooperate with UN
inspectors. The first Iranian reaction was to imply that the program would now
accelerate in response to the sanctions and that a 'breakthrough' will be
announced in February in the occasion of the anniversary of the 1979 revolution.
In fact the Iranian parliament immediately approved a bill asking the government
to revise its policy of cooperation with the IAEA in response to the vote of the
Security Council.
Sanctions, China and the oil industry
During December for the first time Iranian officials admitted that they are
having problems in attracting the necessary level of foreign investment to their
oil industry. Recognising that foreign banks and financial companies have
decreased their cooperation, Oil Ministry officials also hinted that they expect
China to fill the gap at least in part. In fact, the China National Offshore Oil
Corporation already signed a memorandum for the exploitation of the North Pars
gas fields, which if finalised would bring US$16 billion of investment to Iran.
Since the Chinese are certainly hungry for oil and gas, their growing interest
in Iran might well offset the declining interest of western investors, who are
being further put off by the approval of sanctions by the UN Security Council,
however mild those sanctions might be. Sources within the Iranian Oil ministry
also hinted the existence of plans to draw the much needed cash to be invested
in the oil and gas industry from the Oil Stabilisation fund, which was
originally intended to balance the ups and downs of oil and gas prices by
accumulating reserves during the good years and spending them when prices hit a
low. Some experts however believe that neither the Chinese nor the Oil
Stabilisation fund will suffice and that indeed Iran has already been reducing
its production for the last two years, producing even less than its OPEC quota
would allow. Another negative aspect for Iran's oil and gas industry is that its
bad management is seriously harming its credibility abroad. In early January the
Iranians suspended their gas supplies to Turkey, due to a harsh winter and
consequent rise in internal consumption. By privileging internal consumption and
by over-committing to external buyers, the Iranians showed a fair deal of
incompetence and disorganisation.
Ahmadinejad's sunset boulevard?
The final results of the 15 December elections were released. In Teheran,
the most closely observed of the local councils, the supporters of anti-Ahmadinejad
conservative leader Qalibaf elected 6 out of 15 councillors, the reformists four
and Ahmadinejad's supporters three. With regard to the Council of Experts, all
the leading vote winners were conservatives, but mostly not close to Ahmadinejad.
This led many observers to announce the inexorable decline of the President, but
this might be premature. The number of votes obtained by his supporters seems in
line with Ahmadinejad's level of support before the second round of the
presidential elections, where only two candidates were present. The reformists
claim to have elected 40% of the councillors nationwide, with many others who
run as independent and were also elected, but these estimates were not confirmed
independently. In any case, the reformists are clearly recovering, but their
success was in part due to the unification of the their lists at a time when the
conservatives were split in different groups, more then to a proportional
increase in votes.
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