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. Iran's nuclear drive linked to looming oil crisis: US study
WASHINGTON, Dec 25 (AFP) Dec 26, 2006
Iran's nuclear ambitions are motivated not just by a desire for regional supremacy but by a potentially devastating crisis in its oil industry, a US researcher said in a report made public Monday.

Iran's image is of a muscular oil producer with plentiful reserves, but in fact it could soon face its own energy crunch owing to failing infrastructure and lack of investments, Roger Stern at Johns Hopkins University said.

Writing in the respected Proceedings of the National Academy of Sciences of the United States, the professor of geography and environmental engineering said Iran's oil problems have the potential to topple the clerical regime.

Stern said there was no reason to doubt US-led accusations that Iran's drive to develop nuclear energy has more sinister ends in mind, to entrench the regime in power and fend off US military hegemony in the Gulf.

He added "but it cannot be inferred from this that all Irani(an) claims must be false."

"The regime's dependence on export revenue suggests that it could need nuclear power as badly as it claims," Stern wrote.

Many of Iran's oil deficiencies are of its own making, he said, noting that generous domestic subsidies for gasoline mean that Iran's national oil company cannot make money at home and so needs to export as much as it can.

But rapid population growth means that domestic demand is rising all the time, while authorities have let their refineries and pipelines fray.

So Iran, despite being the second-biggest exporter in the OPEC cartel behind Saudi Arabia, actually has to import oil products like gasoline to cope with demand.

Stern calculated that since 1980, energy demand in Iran has risen 6.4 percent, exceeding supply growth of 5.6 percent. Exports meanwhile have stagnated since peaking in 1996.

For at least 18 months, Iran has failed to meet its quota for oil production set by the Organization of the Petroleum Exporting Countries, he said.

The strong suggestion, Stern said, is that Iran's oil production is now actually falling, despite the bonanza that exporters have enjoyed from a period of record-high crude prices.

And a nationalistic regime is fueling the problem by making life ever-harder for foreign oil companies, he said.

Stern noted sudden contractual problems faced by India, in its bid to negotiate for supplies of Iranian natural gas, after New Delhi failed to vote with Tehran at a meeting of the United Nations atomic watchdog.

"Iran's petroleum investment climate therefore appears to have greatly deteriorated since 1998-2004, a period when investment was insufficient to offset the recent production decline," the professor said.

"Zero future foreign investment thus appears plausible."

Overall, according to Stern, it "seems plausible that Iran's claim to need nuclear power might be genuine, an indicator of distress from anticipated export revenue shortfalls."

"If so, the Irani regime may be more vulnerable than is presently understood."

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