Iran: On the Brink of Economic Warfare

by Huda al Husseini, Asharq Alawsat, 25/07/2007

The Iranian government had allotted 22 gallons per month for every car. This barely covers the minimum needs of bigger cars that Iranian youth prefer to drive. News has been circulating about leaders of smuggling rings to Turkey being responsible [for the riots], as they send pick-up trucks loaded with subsidized fuel to make profit of no less than three thousand dollars, an Iranian's estimated per-capita income, and will thereby suffer a great loss due to the government's rationing system.

Ahmadinejad soon realized that these riots pose a threat to his regime. He thus called on his comrades of scholars and politicians to save him. Soon, Ayatollah Ahmad Jannati, a well-known advocate of Ahmadinejad's regime, was quoted as saying, "The oil must be used in reconstruction."

Many security departments in the U.S. have leaned toward the decision to take advantage of the riots in Iran to destabilize Ahmedinejad's regime, and to pressure him into halting the nuclear program. American officials agree that the riots proved that Iran would be most vulnerable if subjected to oil sanctions, particularly because Iran has to import 40% of its gasoline.

Mark Kirk, a Republican member of the House of Representatives representing Illinois, proposed a bill for imposing international oil sanctions against Iran. Kirk, who is a member of the powerful House Committee, said: "As Iran continues to defy the U.N. Security Council and International Atomic Energy Agency, we need to explore new economic sanctions to augment our diplomacy."

"Legislation targeting gasoline imports offers the best way for IAEA [International Atomic Energy Agency] safeguards to succeed," he added. In light of this legislation, the American sanctions could extend to include any company or individual to oversee or aid Iranian transactions to import refined gasoline. This may lead oil and gas trading agencies to be boycotted as well, along with petrol truck and insurance companies. Iran will have to import its gasoline from neighbouring Gulf states and India. Vitol, a Dutch company, will act as a mediator in the trading process. And Lloyds, a British insurance company will provide gasoline trucks.
However, U.S. Department of State expressed uncertainty with regards to the likelihood of this proposed bill's success. Officials believe the Bush Administration has failed to convince the U.S.'s fellow North Atlantic Treaty Organization [NATO] members, such as Britain, Germany and France to intercept their funds, or the companies that facilitate Iran's nuclear program. Tom Casey, a spokesman for the Department of State, said: "We need to do everything that we can to continue to raise the stakes in Iran in terms of its nuclear program. We are in the process now of looking at what additional measures we can add."

The Department of State's stance does not mean that most U.S. officials do not agree that Ahmadinejad is in a state of obvious vulnerability. The department has, in fact, received numerous reports about burnt down busses and cars in the Iranian capital. Officials believe that these protests' timing is perfect, and that Ahmadinejad's vulnerability is consistently worsening as the forthcoming parliamentary elections approach by the end of this year. These protests could incite more opposition to him, particularly by "old guards" the likes of ex-presidents Hashemi Rafsanjani and Mohammed Khatami.

The Congress intends to impose sanctions on any given country or body that may export fuel to Iran. In light of this new legislation, the sanctions could entail barring whomever breaks it from working in or with American companies, be they on American soil or otherwise. This legislation to broaden sanctions against Iran will be put into effect by the beginning of the year 2008. It has been supported by both the republicans and the democrats in congress.

Robert Andrews, a member of the House of Representatives who was one of the lawmakers to introduce "Iran Sanctions Enhancement Act", stated: "An international restriction on the supply of gasoline would serve as a critical diplomatic tool to deny Iran the ability to further its efforts to acquire nuclear weapons.”

The U.S.'s new way of thought allows it to believe that economic warfare will prove far more effective against Iran than military action. This way of thought stemmed from a simple equation: more freedom for the Iranian people, coupled with the country's economic woes will result in a radical regime change, reminiscent of that which occurred in Russia in the 1980's. Iran, as is widely known, imports about half of its petrol, as it lacks refining capacity. In a recent paper by Dr. Horace "Woody" Brock on oil prices, figures show that Iran will no longer be able to export petrol by the year 2014.

The situation appears to be worsening, as a report by Roger J. Stern of the Johns Hopkins University Department of Geography and Environmental Engineering predicts that "Iran earns about fifty billion U.S. dollars a year in oil exports. The decline is estimated at 10 to 12 per cent annually. In less than five years exports could be halved and then disappear by 2015."
This was only confirmed by Iranian deputy petroleum minister for international affairs, Mohammad Hadi Nejad Hosseinian, who stated: "If the government does not control the consumption of oil products in Iran, and at the same time, if the projects for increasing the capacity of the oil and protection of the oil wells will not happen, within 10 years, there will not be any oil for export."

A decline in oil production, economic sanctions preventing the country from importing gasoline, an unemployment rate of over 30%, an inflation rate of over 20%, and the government having to resort to redenomination. All of which give Iran's clergymen two choices as the next course of action: either they content themselves with what the future holds, i.e. the same fallout as the USSR, or they can turn to adventurism. They are, of course, pursuing the latter by investing money and arms in Shiaa allies from Basra through Beirut, with some Sunni "customers" getting the same special treatment, such as Hamas and the Islamic Jihad Movement in Palestine.

Their goal?

Controlling Iraq's oil fields first, and then the Gulf states' oil fields afterwards!

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