http://news.bostonherald.com/international/view.bg?articleid=173850&srvc=news
BostonHerald.com - International:
Report says Iran's oil exports could decline to zero in less than a decade
By Associated Press
Monday, December 25, 2006 - Updated: 06:04 PM EST
WASHINGTON - Iran is suffering a staggering decline in revenue from
its oil exports, and if the trend continues income could virtually
disappear by 2015, according to an analysis released Monday by the
National Academy of Sciences.
Iran's economic woes could make the country unstable and
vulnerable, with its oil industry crippled, Roger Stern, an economic
geographer at Johns Hopkins University, said in the report and in an
interview.
Iran earns about $50 billion a year in oil exports. The decline
is estimated at 10 to 12 percent annually. In less than five years
exports could be halved and then disappear by 2015, Stern predicted.
For two decades, far longer than its designation by President
Bush in January 2002 as part of the "axis of evil," the United States
has deployed military forces in the region in a strategy to pre-empt
emergence of a regional superpower.
Iraq was stopped in the 1991 Persian Gulf War, but a hostile
Iran remains a target of U.S. threats.
The U.S. military exercises have not stopped Iran's drive. But
the report said the country could be destabilized by declining oil
exports, hostility to foreign investment to develop new oil resources
and poor state planning, Stern said.
The analysis supports U.S. and European suspicions that Iran is
trying to develop nuclear weapons in violation of international
understandings. But, Stern says, there could be merit to Iran's
assertion that it needs nuclear power for civilian purposes "as badly
as it claims."
He said oil production is declining and both gas and oil are
being sold domestically at highly subsidized rates. At the same time,
Iran is neglecting to reinvest in its oil production.
"With an explosive demand at home and poor management, the
appeal of nuclear power, financed by Russia, could fill a real need
for production of more electricity."
Iran produces about 3.7 million barrels a day, about 300,000
barrels below the quota set for Iran by the oil cartel, the
Organization of Petroleum Exporting Countries.
The shortfall represents a loss of about $5.5 billion a year,
Stern said. In 2004, Iran's oil profits were 65 percent of the
government's revenues.
"If we look at that shortfall, and failure to rectify leaks in
their refineries, that adds up to a loss of about $10 billion to $11
billion a year," he said. "That is a picture of an industry in
collapse."
If the United States can "hold its breath" for a few years it
may find Iran a much more conciliatory country, he said. And that,
Stern said, is good reason to belay any instinct to take on Iran
militarily.
"What they are doing to themselves is much worse than anything
we could do," he said.
"The one thing that would unite the country right now is to bomb
them," Stern said. "Here is one problem that might solve itself."
© Copyright 2006 Associated Press. All rights reserved. This material
may not be published, broadcast, rewritten, or redistributed.
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