Terryorisms

The Race for Iran June 21, 2006

The Race for Iran – New York Times
Unfortunately, by refusing to consider a “grand bargain” with Iran — that is, resolution of Washington’s concerns about Tehran’s weapons of mass destruction and support for terrorism in return for American security guarantees, an end to sanctions and normalization of diplomatic relations — the Bush administration is courting failure in its nuclear diplomacy and paving the way for Russia and China to win the larger strategic contest.

Iran has the world’s second-largest proven reserves of conventional crude oil, after Saudi Arabia, and the second-largest reserves of natural gas, after Russia. Its relatively low production levels make it one of the few states with the potential to greatly increase its exports of both oil and gas over the next two decades.

As the world economy during this period will rely increasingly on the Middle East and the former Soviet Union for its energy needs, Iran’s putative status as a hydrocarbon superpower will take on ever greater strategic importance. Add in its location, its population of nearly 70 million (the largest in the Middle East) and its ambitions to regional leadership, and the significance of Iran’s future international role is undeniable.

However, to expand its energy exports, Iran needs a great deal of capital and advanced technology from outside — at least $160 billion over the next quarter century according to the International Energy Agency. Washington of course does all it can to block exactly such investment — barring American energy companies from seeking business in Iran and threatening European and Japanese companies with fines and cutoffs of American components.

Together, Russia and Iran control almost half of the world’s proven reserves of natural gas. If they coordinated their production and marketing decisions, these two countries could be twice as dominant in international gas markets as Saudi Arabia is in the global oil market.

And as China looks to deepen its own involvement in Iran, there would be opportunities for Chinese-Russian cooperation in developing Iranian resources, and collaborating against what both Beijing and Moscow see as excessive United States unilateralism in world affairs.