An Iranian minister breaks ranks with President Mahmoud Ahmadinejad and admits US-backed sanctions have sliced oil exports by 45 percent – but says the nuclear weapon program continues.
The sanctions are designed to convince the Iranian regime to allowed United Nations officials to inspect the nuclear development program, to make sure it is not being used to lead Iran to the capability of manufacturing a nuclear weapon.
As much as the sanctions have punished the Iranian economy, Iran continues to forge ahead with its nuclear program, denying allegations that it wants to manufacture nuclear weapons
Evidence provided by aerial surveillance flights has provided a clear picture that a nuclear bomb, presumably intended as a threat to Israel’s existence, is going full-speed ahead.
Ahmadinejad has steadfastly denied that the sanctions are hurting the economy, but Oil Minister Rostam Qasemi has reversed his previous denials of any decline at all.
“There has been a 40 percent decrease in oil sales and a 45 percent decrease in repatriating oil money,” Qasemi told the Iranian parliament’s budget commission, according to the government-controlled ISNA news agency.
The admission by Qasemi was significant, given that he was one of the officials who up to now had been most adamant in claiming that Iran’s crucial oil exports were entirely unaffected by draconian US and EU sanctions, AFP noted.
Those assertions have crumbled in recent months, with other Iranian officials acknowledging that the sanctions were hurting the economy.
Economy Minister Shamseddine Hosseini for instance last month admitted that oil revenues had plunged 50 percent because of the Western embargo, which took effect in July 2012.
According to the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA), Iranian crude exports have fallen from around 2.4 million barrels per day (mbpd) in late 2011 to around 1.0 mbpd by the end of 2012.
The overall amount Iran is pumping out of its oil fields is estimated to have fallen by some 25 percent to 3.0 mbpd — its lowest level since the Iran-Iraq war in the 1980s.
Iran, once the second-biggest crude exporter in OPEC after Saudi Arabia, has now slipped to fourth place, as sales drop behind those of Iraq and Kuwait, according to the cartel’s figures.
The sharp decline is undermining Iran’s finances. In 2011, the Islamic republic relied on the $100 billion brought in by oil exports to cover 60 percent of the budget.
This year will see much less money to spend, several Iranian lawmakers and government officials have hinted.
“It is expected that oil exports will be 1.5 mbpd” in the next Iranian calendar year starting in March, Qasemi said, according to remarks relayed to ISNA by budget commission spokesman Gholam Reza Kateb.
The export plunge, and US sanctions restricting Iran’s ability to use international banking transactions to repatriate oil revenues, is costing the country around $5 billion per month, according to experts.