London, Asharq Al-Awsat—International sanctions on Iran’s oil exports have substantially damaged the country’s share of the market, allowing neighboring countries to boost their own oil production and sales.
Citing analysis by the US government’s Energy Information Administration (EIA), Britain’s Financial Times newspaper reported that “excluding sanctions-hit Iran, members of the OPEC cartel of oil producers earned $982bn in net oil export revenues last year.” The report added that this was the highest figure since the EIA began collecting data in 1975.
Meanwhile, the US House of Representatives is scheduled to vote next week on legislation intended to hamper Iran’s ability to export oil to the breaking point. This move appears to be the latest attempt by US lawmakers to ensure that pressure on Iran’s economy forces the Iranian leadership to change course, specifically on the nuclear file.
With 360 co-sponsors, this bill will easily pass through the 435-member Congress, and is also expected to be ratified in the Senate following Congress’s August recess.
The motion urges US president Barack Obama, under the authority provided by the International Emergency Economics Powers Act, to eliminate any remaining loophole allowing Iran to distribute oil.
Iran presently exports approximately 1 million barrels per day (bpd). This latest legislation aims to significantly cut this to zero within a period of two months.
For approximately a year, various exemptions granted to importers of Iranian oil allowed Tehran to continue exporting. However, this new bill aims to terminate exemptions to countries such as Japan, China and India. Companies in these countries that continue dealing with Iran will be cut off from the US economy.
According to Israel’s Jerusalem Post, “American officials are confident there is spare capacity in the global market to replace Iran’s exports.”
Libyan and Iraqi oil production have reached pre-war levels, while Saudi Arabia is capable of accommodating any global shortfall in the event of a complete embargo on Iranian oil exports.
It is estimated that Saudi Arabia possesses approximately 2 to 2.5 million bpd spare capacity in oil production that it can utilize if required.
Iran’s economy has been hit by various international and unilateral sanctions targeting its financial and import/export capacity. Iran’s rial has decreased in value by more than 50 percent since the beginning of 2012 and many factories are facing serious challenges to secure cash flow and import goods essential for operations.
In Iran, eyes are fixed on president-elect Hassan Rouhani’s ability to reverse this unprecedented pressure when he assumes the presidency on August 4. In line with Iran’s exceptional situation under expanding sanctions, the Iranian foreign ministry has confirmed that all heads of states, excluding the US and Israel, have been invited to attend Rouhani’s inauguration in Tehran.
So far, the presidents of Afghanistan, Turkmenistan, Tajikistan, Pakistan and Lebanon have confirmed their attendance. Qatari Emir Sheikh Tamim Bin Hamad Al-Thani was among the first confirmed guests.
According to the Iranian media, high-level delegations are expected to arrive in Tehran from Turkey, Malaysia, Iraq, Syria and Oman. The list is being updated and a massive logistical operation is underway to accommodate the guests.
Initial reports claimed that the inauguration ceremony would go ahead on the morning of Sunday, August 4, but new reports suggest this might be postponed to accommodate the high-profile visitors making their ways to Tehran for the occasion.