Can Stifling Iran's Oil Sector Stop its Nuclear Ambitions?
From Riskmetrics | By Francesco Navarrini on July 13, 2010
On July 1, US President Obama signed into law the Iran Sanctions, Accountability, and Divestment Act of 2010 (SADA). The President said the new law’s sanctions were intended to punish Iran for its ongoing uranium enrichment program, according to Reuters. Still, White House spokesman Robert Gibbs said that sanctions were not a “silver bullet.” By setting out to weaken Iran’s oil sector, SADA could have perverse consequences, depending on how the Iranian regime responds to potential future energy shortages.
Major Crude Exporter Must Import Gasoline
According to the Government Accountability Office (GAO), oil export revenues account for 24 percent of Iran’s gross domestic product and between 50 and 76 percent of the Iranian government’s revenues. However, Iran has not reached peak crude oil production levels since 1978, does not produce sufficient natural gas for domestic use, and lacks the refining capacity to meet domestic demand for gasoline.
Reuters reports that Iran currently imports up to 40 percent of its gasoline for domestic consumption.