Sunday, April 13, 2014

Iran’s Gas Exports Rise 258 Percent

by Michael Rubin

In the year prior to the start of the Obama administration’s preliminary talks with Iran, the Iranian Statistics Agency had reported that the Iranian economy had contracted 5.4 percent. Iranian authorities were desperate for cash in order to be able to make payroll; had they not, public protests might have made the 2009 protests look like a stroll in the park.

Providing $7 billion in sanctions relief to get Iran to the table largely fulfilled the Iranian government’s objectives before negotiations really even began: It was the diplomatic equivalent of giving a five-year-old dessert first and then expecting him to come and eat his spinach.

While Obama administration officials say that they can restore the sanctions regime should Iran not comply with its commitments, such a statement is doubtful given the windfall which the Iranian government is currently reaping. Take the latest Iranian report on its gas industry:

Iran’s gas exports reached 195.000 barrels daily over the first 8 months of the last Iranian calender year (started from March 20-November 20). It then climbed to 504.000 barrels daily in the last four months of the year. Iran’s gas exports rose by 258 percent after signing the deal with the five permanent members of the UN Security Council plus Germany in November. Iran’s gas exports earnings totaled $10.295 billion in 2013, raising by 15.93 percent
Let’s put this in perspective: If the official budget of the Islamic Revolutionary Guard Corps (IRGC) is around $5 billion per year, then Obama and Secretary of State John Kerry have effectively bought that terrorist group two years for free. To be fair, the IRGC makes more money off-books through its smuggling activities and shell corporations, but so many of those are actually involved in the energy sector, so the problem might be even worse.

Albert Einstein quipped that insanity was taking the same action repeatedly, but expecting different results each time. Between 2000 and 2005, the European Union more than doubled trade with Iran in order to encourage reform; what it received was about 70 percent of that hard currency windfall interjected directly into Iran’s ballistic missile and nuclear programs. Alas, rather than cripple and curtail Iran’s nuclear program and breakout capability, Obama’s policies might actually accelerate them should the Iranian regime feign grievance and walk away from the talks.

Michael Rubin


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