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Iran Quarantines Oil-Rich Region

Iran has declared a quarantine on Abadan County, an oil-rich region in southwestern Iran, after it booked an increase in new Covid-19 cases last week, Bloomberg reports, citing Iranian media.

Iran has been among the countries hardest hit by the coronavirus pandemic. What’s worse is that the increase in new cases comes after a national decline in new cases that prompted a relaxation of some lockdown measures. The country has recorded a total of 107,603 cases, with 6,640 deaths as of Monday.

Earlier this month, media reported, citing medical officials, that the number of new infections was rising across Iran’s oil heartland, Khuzestan province, of which the Abadan County is part.

The Khuzestan province in southwestern Iran bordering Iraq and lying on the Persian Gulf is home to most of Iran’s oil and gas fields - the chief foreign income for the Islamic Republic, which is being severely crippled by the U.S. sanctions on its oil exports. Khuzestan also hosts the country’s ports and the land routes to them, through which most of Iran’s exports and imports pass.

Despite the pandemic, however, Iran is still building a major new pipeline that would transport oil and oil products from Khuzestan to the coast on the Gulf of Oman. The Guriyeh-Jask pipeline will have a capacity of at least a million barrels of crude or petrochemicals. As Simon Watkins wrote earlier this month for Oilprice.com, the pipeline would allow Iran to boost its oil exports significantly while retaining the ability to disrupt oil flows through the Strait of Hormuz.

The oil price crash has been a particularly cruel blow to Iran, which was already suffering the effects of U.S. sanctions and a fast rise in Covid-19 infections. Yet, to keep up morale, President Hassan Rouhani has downplayed the effect of low oil prices on the Iranian economy.

While he acknowledged the price crash “has created problems for all of us, even for us,” The New York Times quoted Rouhani as saying in April, the president added, “Because our dependency on oil was reduced — by choice or not, willingly or enforced by the enemy — definitely our losses will be less.”

By Irina Slav for Oilprice.com

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