oil iraq refinery 248 88.
(photo credit: AP [file])
Iran plans to build seven new oil and gas refineries in a bid to
diminish its vulnerability to sanctions from foreign refineries.
According to the official Iranian news agency IRNA, the new oil
and gas refineries will allow Iran both to meet domestic demand and
become a gas exporter, although the agency failed to state when
construction was due to start.
Though Iran has one of the largest known oil reserves in the
world, it lacks the necessary refineries to turn the crude oil into
high value consumer products such as gas. If completed, the new plant
will significantly boost Iran’s oil industry.
Iran relies on exporting its oil to southern Gulf countries for
refinement, which necessitates re-importing its own oil at a much
New sanctions being considered against Iran by the United States
plan to target this dependence.
“From an economic point of view, it’s very difficult, simply
because it’s going to be a very costly enterprise,” Mohammed
Shakeel, editor and economist with the Economist Intelligence Unit,
told The Media Line.
“But also for Iran, it’s a very immediate concern as well,
because the threat of sanctions is targeting that particular sector.
So the government wants to show that it’s on top of developing its
refineries, and therefore is able to handle any pressure from
sanctions,” he said.
“Whether it has the resources to carry this out is a completely
different story,” Shakeel added, referring to the huge costs of
Regional analysts suspect Washington might find it tricky to get
some Gulf countries to follow its directives as Oman recently signed
a gas cooperation deal with Iran.
“Oman has always maintained an open channel of communications
with Iran,” Dr. Christian Koch, Director of International Studies
at the Gulf Research Center in Dubai, told The Media Line. “Their
relationship can be described as good.”
“There is also pressure on Dubai to curb its trading
relationship with Iran, a policy more in line with the United Arab
Emirates policy, and to anticipate any further sanctions that might
be imposed,” he said, noting that Dubai has strong business ties
with Iran despite a conflict over the sovereignty of three islands in
The root of the conflict between Iran and the US revolves around
Iran’s nuclear program, which Washington suspects is a cover for
nuclear weapons development, but which Teheran claims is for energy
US sanctions against Iran have been in place since 1987 but have
so far had little impact on Iran’s capabilities and determination
regarding its nuclear program. Iran continues to affirm that
developing nuclear power is within the country’s legitimate rights.
The US government is in the process of appealing to the United
Nations Security Council to approve the planned sanctions, a move
which would grant the sanctions better legal backing.
Russia and China who both have business ties with Iran, and are
permanent members of the council and thus hold veto power, have so
far failed to support the US in its calls for tougher sanctions.