A really interesting report in today’s Financial Times:
Iran’s oil minister on Wednesday admitted that Tehran was having trouble financing oil projects, in a rare acknowledgment of the economic cost of its nuclear dispute. “Currently, overseas banks and financiers have decreased their co-operation,” Kazem Vaziri-Hamaneh told the oil ministry news agency, Shana.
The statement underlined the impact of de facto financial sanctions on the Organisation of the Petroleum Exporting Countries’ second biggest oil producer. As the controversy over Iran’s nuclear programme has escalated, the US has applied pressure on European banks and financial institutions to curb dealings with Tehran.
As the Security Council continues its several months-long project to water-down the proposed sanctions resolution, ‘de facto’ sanctions — the chilling effect of the diplomatic crisis on international finance — are taking their toll. This is especially worrisome for Iran in view of its woefully inadequate domestic refining capacity, which forces OPEC’s second largest exporter to import nearly half of its gasoline. Indeed, the government of Tehran is reportedly distributing gasoline ration-cards for next year.
It is an interesting irony that Iran has justified its nuclear program on the basis of “energy security” while the main effect of the program has been to dramatically increase its energy insecurity.