• 3 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 7 minutes Saudi and UAE pressure to get US support for Oil quotas is reportedly on..
  • 11 minutes China devalues currency to lower prices to address new tariffs. But doesn't help. Here is why. . . .
  • 15 minutes What is your current outlook as a day trader for WTI
  • 10 hours Long Range Attack On Saudi Oil Field Ends War On Yemen
  • 3 hours Maybe 8 to 10 "good" years left in oil industry * UAE model for Economic Deversification * Others spent oil billions on funding terrorism, wars, suppressing dissidents * Too late now
  • 8 hours Will Uncle Sam Step Up and Cut Production
  • 14 hours In The Bright Of New Administration Rules: Immigrants as Economic Contributors
  • 2 hours Domino Effect: Rashida Tlaib Rejects Israel's Offer For 'Humanitarian' Visit To West Bank
  • 2 hours 'No - Deal Brexit' vs 'Operation Fear' Globalist Pushback ... Impact to World Economies and Oil
  • 23 hours Gretta Thunbergs zero carbon voyage carbon foot print of carbon fibre manufacture
  • 2 hours CLIMATE PANIC! ELEVENTY!!! "250,000 people die a year due to the climate crisis"
  • 1 day NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 23 hours Continental Resource's Hamm wants shale to cut production. . . He can't compete with peers.
  • 2 hours Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
  • 2 days Significant: Boeing Delays Delivery Of Ultra-Long-Range Version Of 777X
  • 2 days Why Oil is Falling (including conspiracy theories and other fun stuff)
Alt Text

Low Solar Panel Prices Spark Surge In Adoption

Solar energy is experiencing a…

Alt Text

Corn Industry Battered By Shocking Ethanol Decision

The administration just issued a…

Alt Text

OPEC Turns Bearish On Oil

In its latest monthly report,…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Cash Strapped Iranian Oil Industry Braces For Trump Impact

Iran has been raising eyebrows with its unwavering determination to put its energy industry back on its feet since most Western sanctions against Tehran were lifted last year, and its progress so far is considerable.

The news from the last two weeks alone include crude oil output close to 4 million barrels daily; the National Iranian Oil Company shortlisting 29 foreign companies to take part in oil and gas tenders to take place later this quarter; and the National Iranian Gas Company announcing it wants to build a US$2.5-billion trunk gas pipeline, in partnership with Russian energy firms.

Also since the start of January, an insurance business group announced that it has found a way around the remaining U.S. sanctions against Iran, and will now offer almost full coverage for export-bound Iranian crude shipments, excluding U.S.-based sector players. This will help Iran further boost its oil exports and possibly start filling gaps left by its regional rival, Saudi Arabia, which had to slash its own output by almost half a million barrels as per the OPEC agreement from November 30 last year.

These reports paint a pretty rosy picture for Tehran, but as usual, the reality isn’t quite as clear cut. At the end of last year, the Arab Petroleum Investment Corporation, a Saudi Arabia-based firm, published a report in which it acknowledged Iran’s progress, but warned that a lot of challenges remain, such as the lack of capital; U.S. sanctions, which are making the likes of BP and Shell wary of returning to Iran; red tape, which invariably hampers the inflow of foreign investment; and, perhaps most importantly, the forthcoming May presidential elections. Related: North Sea Oil Producers Cash In On Asian Demand, OPEC Deal

Current president Hassan Rouhani is the leader of the reformists in Iran’s politics. It was thanks to this reformist camp that the new International Petroleum Contract was developed and—despite conservative opposition—approved it, demonstrating to international oil companies the country’s commitment to restarting its energy industry. It was this reformist camp that sealed several major oil and gas development deals that will see Iran get closer to its stated daily output goal of 5 million barrels by 2020.

The problem now is that there is no certainty that Rouhani will be elected for a second term. Iranian politics lack a system of formal political parties, and there are various groups that could theoretically come up with an attractive candidate for the May vote, especially in the current situation, which, according to one regional observer from Russia, is ripe for a change in political discourse. The picture is still pretty blurry even for Iranian political analysts, so wariness and uncertainty among energy players is understandable.

Then there is Donald Trump, the 45th President of the United States, who was sworn in last Friday. Trump has said on more than one occasion that the deal that the West struck with Tehran aiming to stop its nuclear program was unfair, and now all eyes are on him to see how he will approach the issue. Related: Why Cheap Natural Gas Is History

Almost the entire Middle East, from Israel to Bahrain is cheering Trump’s stated hostility towards Tehran, worried about Iran’s rising influence in the region. Some local analysts expect that the new U.S. President will turn into a second Ronald Reagan. Should Trump live up to these expectations, things could get difficult for Iran. On the other hand, Trump has also stated he wants to have a productive relationship with Russia, which is Iran’s biggest backer in the Middle East—for now.

Geopolitics, especially in the Middle East, is a complex game and it always has been. There is just too much oil and gas there. Should conservatives in Iran win in May, the capital needs of the energy industry, which have been estimated at some US$200 billion, might turn out to be Iran’s smallest problem.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage


Leave a comment
  • EH on January 25 2017 said:
    Oh shaking,, TRUMPSTER DUMPSTER garbage. 4yrs tops, if he ain't impeached!

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play