Iran to invest $46b. in refineries to fight sanctions

Islamic Republic looks to become more self-sufficient.

August 1, 2010 03:27
2 minute read.
Iran to invest $46b. in refineries to fight sanctions

oil barrels 88. (photo credit: )


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Iran’s has announced plans to invest $46 billion in oil refineries to make the country self-sufficient.

Alireza Zeighami, Iran’s deputy oil minister, said the country would invest the money to develop and optimize the country’s oil refineries. United Nations sanctions, he said, would not curb the refineries’ construction.

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Iran’s import of gas has nosedived as a result of the fourth round of UN sanctions.

According to a report by Reuters, only three ships brought gas to Iran in July, as international traders begin to shy away from doing business in the Islamic Republic.

“This is a hopeful stab at defiance against the sanctions regime being imposed on Iran,” said Rory Fyfe, an expert on the Middle East oil and gas industry with the Economist Intelligence Unit.

“But it will be some time before we know whether the sanctions are having their desired effect.”

The UN Security Council slapped a fourth round of sanctions on Iran in June, barring dealings with firms linked to the Iranian Revolutionary Guard Corps.

The Revolutionary Guard is a separate organization from the Iranian army and operates its own armed forces, navy, air force and militia. Its goal is to preserve the theocracy in Teheran, but over the years it has widened its scope and runs a vast business empire, ranging from construction to telecommunications.

Potkin Azarmehr, an Iranian opposition blogger, said the sanctions seem to be having an effect and that the government is concerned.

“Despite the government putting on a bravado face, the sanction are appearing to have a bite,” Azarmehr said.

“We see in the news that we are getting from people in Iran that the economic conditions are getting worse, there are long queues for petrol and price hikes like never before.

“The merchant class is also getting worried and they are usually a good indication on the economy,” he said.

Despite Iran having some of the largest proven oil and gas reserves in the world the country suffers from a severe lack of refining capabilities.

The crude oil needs to be exported to be refined into consumer products such as gas, which then has to be reimported at a higher cost.

Following the new UN sanctions, which cover all 192 member states of the global body, both the United States and European Union tightened their own sanctions further.

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