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Sunday, April 12, 2009

The Future of Iran

Of particular interest:
To the average Iranian, foreign policy is out there as an issue. They care about their place in the world and want Iran to be strong, powerful, influential and well-liked. They don’t like that Iran is isolated and that it’s seen as a pariah by so many countries. But foreign policy is very far down their list of priorities. The thing that really looms large to them is the economy, which is not doing well at all. If foreign policy is a mixed bag, it’s very hard to find any silver lining in the dark cloud of Iran’s economy. Iranian oil production, on which their economy is heavily dependent, is declining. At least one oil economist suspects that the Iranians may wind up being a net importer of oil within the next decade, because their production is declining while their consumption continues to increase. Production is declining so badly that the Iranians can no longer even fill their OPEC quota, which is astounding given that when the Shah was in power, they were the second largest oil exporter in the world. It will require huge amounts of investment and Western technology to repair the damage done to Iran’s oil industry and the bolster its oil production. The technocrats in Iran’s oil industry are very good and sharp, and they know that. They’ll take the Chinese technology if it’s all they can get, but it’s not what they want. They’re desperate for Exxon, Conoco, Chevron and Shell. That’s one of the reasons the sanctions are so painful to them.


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