Russia and Iran: oil in exchange for goods. In-kind exchange
On the territory of Iran, about 100 deposits of hard coal are known in the Tebes (Kerman) and Elburz coal basins. Intensely dislocated Triassic and Jurassic sediments are carbon-bearing. The productive strata with a thickness of 1.5-4 km (sometimes up to 8 km) contains up to 92 coal seams, of which from 4 to 18 have a working thickness (3.8-10.9 m). Coals are low- and medium-grained, high-ash, requiring enrichment. Phosphorus content up to 0.1%, calorific value 35.2-37.4 MJ/kg (a significant part of the coals is coking).
About 40 iron ore deposits have been identified in Iran; the largest are located in the Bafq and Sirjan regions, the small ones in Elbrus and in the south of the country. The main deposits are Chogart (explored reserves 215 million tons), Chadarmalyu (410 million tons), Zerend (230 million tons), etc. Most of the deposits are skarn and metasomatic, hydrothermal, metamorphogenic, sedimentary and crust-related deposits are also known weathering
The most important deposits of chrome ores are located in the Minab and Sebzevar regions. Most large deposit Shahriar (reserves 2 million tons) consists of 31 ore bodies, the reserves of which range from 1 to 500 thousand tons each. Probable reserves in the Sebzevar region are 1.2 million tons, promising - 10 million tons. The largest deposit is Mir-Makhmud with proven ore reserves of about 100 thousand tons.
Most of the raw materials (since 1979 about 60%) are exported to capitalist (including the EEC countries and Japan), developing and socialist countries. The main export loading terminals are located on the islands of Sirri, Lawan and Khark (1982). Large oil and product pipelines: Tehran - Mashhad; Abadan - Ahvaz; Tehran - Qazvin - Rasht; Abadan - Ahvaz - Ezna - Tehran; Ahvaz - Teng - Fani - Tehran; Maroun - Isfahan; Isfahan - Tehran. The total length of oil and product pipelines is 7.9 thousand km (1982). There are (1982) 6 oil refineries in the country (in the cities of Tehran, Tabriz, Shiraz, Isfahan, Bakhtaran and Mesjed-Soleiman; one of the world's largest oil refineries in Abadan with an annual production capacity of over 30 million tons is out of commission) with a total annual production capacity of 26 million tons, which does not fully meet Iran’s internal needs.
The development of natural gas fields began in Iran in the early 70s. 20th century Production is carried out at the Khangiran, Gorgan, Kengan fields (the Pars and Seraj fields are not being developed). The bulk of gas is produced from gas and oil fields; in terms of associated gas reserves, Iran ranks 2nd among industrialized capitalist and developing countries (up to 150 m3 per 1 ton of oil). Gas is used for injection into oil fields, in chemical and petrochemical production, and also as a fuel and energy raw material (in 1981, out of 16.8 billion m 3 produced, 1.9 billion m 3 was injected into the reservoir, used for various needs 7, 2 billion m3 and 7.7 billion m3 flared). A small amount of liquefied gas from Khark Island (1982) is exported to Japan (1982). To pump gas, the main gas pipeline Bir Boland - Qom - Qazvin - Regit - Astara was built, which has branches in the cities. Shiraz, Isfahan, Kashan and Tehran. In addition, transportation is carried out by a gas pipeline system from the Khangiran field to the cities. Mashhad, Gorgan, Neka, etc. There is also an extensive gas distribution network to supply gas to local consumers. The total length of gas pipelines is 2.1 thousand km, the throughput capacity is 18.2 billion m 3 (1982).
Coal mining in Iran reached industrial scale in the 70s. 20th century The impetus for its development was the need to create a fuel base for the Isfahan Metallurgical Plant. The maximum production level was reached in 1974 - 1.2 million tons, in the early 80s. — 0.9 million tons (in terms of commercial value). Development is controlled mainly by state-owned companies subordinate to National Iranian Steel Corp., as well as Iran Mining and Metal Smelting Co. In the Tebes coal basin, the main development area is Kerman (the volume of coking coal in 1980 was over 500 thousand tons). The largest Kerman deposit includes the Pabdane and Babnizu mines (production capacity of 133 and 87.5 thousand tons of coking coal, respectively, 1981). Prospects for further expansion of production are associated with the transition to underlying horizons and the involvement in the development of new areas of the field. In the Elborz basin, development is carried out in the Agusbinsky (Sengrud mine), Alashtinsky (Karmozd mine), and Shahrud district (Tazare deposit - Kalariz and Mamedou mines). In addition, it is known in Iran large number small and poorly studied deposits that are exploited by private companies. The country operates Shahrud, Rigabad, Zerenda, Karmozdekaya and other enrichment plants, and uses heavy-medium separators and flotation plants. Coal consumed on the domestic market. Part of the high-quality coking coal is imported from Germany (51 thousand tons in 1979). Prospects for the development of mineral extraction are associated with exploration of the northern part of the Tebes coal basin (Perverde, Masnan, Kadir, Kuchek-Ali deposits).
Production copper ore. Industrial mining of copper ore began in the 60s. 20th century The maximum level was reached in 1978 - 20 thousand tons. Development is carried out mainly by the state company "National Iranian Copper Industries Co." and its subsidiaries, as well as the organization Bonyade Mostazafin (Foundation of the Oppressed). The main production areas are located in the northern part of Iranian Azerbaijan (Sengan and Mezree fields), southwest of Kerman (Serchesme and Chahar Gonbad) and in the eastern part of the Dashte-Lut desert (Kale Zere). The most important enterprise for the production of copper-molybdenum ore (design production capacity of 40 thousand tons of ore per day) is the mining and metallurgical complex at the Serchesme deposit, which includes an enrichment plant and a copper smelter (design production capacity of 145 thousand tons of copper per year). Operated by the state company "Sar-Cheshmehb Copper Mining Co." The method of field development is open-pit. The main mining transport equipment is excavators, wheel loaders, dump trucks (load capacity 120 tons). The production capacity of the concentration plant is 600 tons of copper concentrate per day containing 34% Mo, and 10 tons of concentrate with 54% Mo: the copper smelting shop is 70 thousand tons per year (1982). The Kale-Zere field is being developed by the Society Maaden Louto with the participation of Japanese companies. In 1980, 225 thousand tons of ore were mined here; The processing plant operating at the deposit produced 14 thousand tons of concentrate (design capacity 50 thousand tons of concentrate per year). In addition, there are enterprises at the Sengan, Mezree, and Chahar-Gonbad fields. Part of the produced concentrates is processed into rough and refined copper (maximum output in 1977-78 - 7 thousand tons); the bulk is exported to Japan. Once the Sercheshm complex reaches its design capacity, copper ore processing will be carried out in Iran.
The extraction of lead-zinc ores began in the country in the 20th century, and the export of lead-zinc concentrates began in the late 40s. Since the early 60s, due to the attraction foreign capital, ore production gradually increased. The development is controlled mainly by the state-owned Iran Mining and Metal Smelting and the Bonyade Mostazafin organization. The main developed fields are located north of the Kerman - Yazd line (Kushk, Dere-Zendzhir, Mehdi-Abad, Tare fields), west of the city of Isfahan (Hosseinabad, Lekan, Engire - Tiran) and south of the city of Miane (Enguran). The underground mining method predominates. The largest enterprise for the extraction of lead-zinc ores (production capacity of about 200 thousand tons of ore per year) has been operating since 1956 at the Enguran deposit. Combined mining; ore enters the processing plant. The Kushk deposit has been developed since 1957 using the underground method; there is an enrichment plant with a capacity of about 150 thousand tons of ore per year. At small enterprises, mining and enrichment are carried out manually. A project for the construction of a lead and zinc smelter has been developed in Iran. The main part of lead-zinc ores and concentrates is exported.
The extraction of ornamental stones, mainly turquoise, is carried out at the Nishapur deposit. Its level is constantly falling due to depletion of reserves. In 1972, about 300 tons of turquoise were mined, in 1978 - 35 tons. The main amount of turquoise is exported in raw and processed form. In 1979, exports in value terms amounted to 1.3 million dollars (including 600 thousand dollars to Switzerland and 580 thousand dollars to Switzerland).
The extraction of non-metallic building materials is carried out mainly by small private enterprises and state-owned companies. Production amounted to in the late 70s. (thousand tons): gypsum 8000, (processed) 450, 1500, travertine (processed) 350-400.
Mining and Geological Service. Personnel training. The activities of mining enterprises in Iran are controlled by the Ministry of Heavy Industry and regulated by the Law on Mines of 1957, geological exploration by the Geological Department of the ministry. Research is carried out by industry companies, as well as at the Institute of Geophysics at the University of Tehran (publishes works). Personnel training is carried out mainly at the Abadan Institute of Technology, the Institute of Standards, the University of Tehran, training centers industry companies.
October 3rd, 2013
“...The British love to work, and we (Iranians) love to enjoy beauty. They love battles, and we love peace. This allowed us to come to an agreement. Now we don't have to worry about the security of our borders. England takes upon itself the defense of Iran. The British will pave roads, build houses, and on top of that they will pay us. Because they understand the extent to which world culture is indebted to Iran.”
Kurban Said. "Ali and Nino".
For many years the British defended Iran and improved its infrastructure. Naturally, they did this not for the sake of Persian poetry, but for the sake of the main resource of the twentieth century - oil. In order to gain access to it, the British Empire, even during the existence of Persia, had to intervene in local politics.
I wonder if the hero of the famous novel understood how deeply he was mistaken? Perhaps the British truly appreciated the great culture of Iran. However, they defended ancient state and they improved its transport infrastructure not for the sake of Persian poetry, but for the sake of the main resource of the twentieth century - oil.
On the banks of the Thames it has always been well understood that it is the presence of basic strategic resources and free access to them that make the state stable and prosperous. Resources can be different - people, water, territory, spices, minerals, and other types of raw materials. One thing remains unchanged - the struggle for them has been the core of politics throughout the history of mankind.
Oil seepage in South-West Persia
“...And the oil from which his face shines”
The British Empire had been interested in Persia for a long time. Due to its geographical location, in the 19th century the Persian state was the scene of intense confrontation between Great Britain and the Russian Empire, which was partially weakened only in 1907 after the signing of an agreement between the two powers on the division of spheres of influence in Persia. At the end of the 19th century, when it became clear that huge hydrocarbon reserves were concentrated in the depths of the Middle East, the strategic importance of Persia increased many times over.
By this time, it became obvious that oil would soon replace coal as the world's main fuel. At the end of the 19th and beginning of the 20th centuries, Great Britain did not have access to oil, and in this regard it was completely dependent on supplies from the USA, Russia and Mexico. The British realized that this situation was unacceptable and they needed oil fields that they could control.
Such an opportunity presented itself in 1901, when the English financier William Knox d'Arcy obtained a concession from the Persian Shah Muzaffar al-Din of the Qajar dynasty to “extract, explore, develop, process, export and sell natural gas and oil... for 60 years.” . For the concession, D'Arcy paid the Shah's government 20 thousand pounds sterling.
William D'Arcy (1849-1917)
The agreement also stipulated that the Shah would receive 16% of oil sales (royalties) if the project was successfully implemented. The concession covered the entire country, with the exception of the five northern provinces bordering the Russian Empire.
D'Arcy, who preferred not to leave Europe, entrusted the task of searching for oil to engineer George Reynolds. However, for a long time, despite significant cash injections, it was not possible to find a single oil field. By 1904, D'Arcy's position had become critical. As a result, in 1905, the entrepreneur entered into an agreement with the Scottish company Burmah Oil, which continued financing the project.
In the spring of 1908, it was decided to stop the search, since almost no one believed in the success of the enterprise. A telegram was sent to Reynolds ordering the work to stop. However, the engineer decided not to stop trying until he received an official letter. And two days later, on May 26, 1908, the first oil gusher erupted from a well in the Mashid-i-Suleiman region in southwestern Persia. Soon other deposits were discovered. It is said that Reynolds informed management of his success with a short telegram: “See. Psalm 103, verse 15″. In this place in the Bible there is a phrase - “... and the oil that makes his face shine.” In London they realized that this was a victory.
Mashid-i-Suleiman field. Oil well No. 1. 1908
In 1909, on the initiative of the British Admiralty, the Anglo-Persian Oil Company (APOC) was created, 97% of which belonged to Burmah Oil, which had been financing oil exploration and production activities since 1905. The remaining 3% belonged to Lord Strathcona, the company's first chairman, who was 89 years old at the time. The founder of the concession was not forgotten: William d'Arcy was offered the post of director, and he remained on the board until his death in 1917, although he did not play any serious role in the affairs of the company. Reynolds was less fortunate - he was fired after a couple of years, paying a small benefit.
Protecting British interests
Five years after the founding of APNK, a controlling stake in the company began to belong to a new shareholder. Namely the British government. One of the key roles in this agreement was played by the First Lord of the Admiralty, Winston Churchill. In a speech to Parliament defending the deal, he argued that "only the British-owned Anglo-Persian Oil Company can protect British interests." On May 20, 1914, the British government acquired 51% of the shares of APNK. On the same day, an agreement was signed between APNK and the British Admiralty, according to which APNK guaranteed the supply of oil to the Admiralty for 30 years at a fixed price.
Laying the first pipes for oil transportation
The timeliness of such a step is obvious - First world war broke out just two months later. Largely thanks to Persian oil, the English fleet had a significant advantage over the fleets of other powers during the war. In addition, since the discovery of oil fields in Persia, Britain’s position in the country has strengthened significantly, and after the revolution in Russia and the end of the war, Persia finally found itself in London’s sphere of influence.
Persia was not formally a British colony, but after World War I the British exercised almost complete control over the political and economic life of a country that was already on the brink of chaos. As a result of the actions of British, Russian and Turkish troops in Persia, the country was close to ruin. The courtyard is mired in corruption. Centrifugal tendencies have intensified. Ruling dynasty Qajarov was losing control over the situation in the country and showed complete incapacity.
Against the background of this situation, London made another attempt to strengthen the interests of the British crown. In 1919, an agreement was signed that provided for the sending of British advisers to Iran in various departments of the state apparatus, the creation of a mixed commission of British and Iranian officers to reorganize the Iranian army according to a single model, and England financing the above reforms through a loan of 2 million pounds sterling for a period of 70 years. Under this agreement, Persia de facto became a protectorate of Britain.
The agreement caused outrage throughout the country. In order to somehow relieve the tension, in 1920 negotiations were held regarding the royalties received by the Persian side. As a result, the Shah's government received £1 million from the APNK. It is interesting to note that the interests of Persia at these negotiations were represented by... Sir Sidney Armytage-Smith, an employee of the British Ministry of Finance.
Shah Reza Pahlavi greets the armies during their return.
Dissatisfaction with the plight of the country eventually resulted in a coup in 1921, led by General Reza Pahlavi, commander of the Cossack brigade, which was formed by the Russian government in pre-war times at the request of the Shah, and journalist Said Zia. Ahmad Shah (heir to Shah Muzaffara) was forced to appoint Zia as prime minister and Pahlavi as commander-in-chief. The British quickly understood the events taking place and supported the coup. The British representative in Tehran, Herman Norman, at the height of the turmoil, contributed to the capture of the capital by the Cossacks led by Pahlavi.
At the same time, today few people remember that in the winter of 1920-21, Cossack brigades trained in the city of Qazvin under the leadership of Lieutenant Colonel of the British Army Henry Smith, received weapons and ammunition from English warehouses. The British also paid them. Norman was then able to become a mediator between the Zia and Pahlavi governments, and in every possible way showed support for the new government, declaring that “Persia now has its last chance, and if it misses it, nothing can save the country from Bolshevism.”
Zia failed to retain power, largely because London bet on Pahlavi. Already in 1923, the latter took the post of prime minister, and in 1925 he prepared the overthrow of the Qajar dynasty and became the new Shah of Persia.
Oil pipeline through Bakhtiary territory
But the British's bets on Pahlavi did not fully materialize. Almost immediately after the arrival of the new government, the 1919 agreement was annulled. However, Britain's position in Persia was still extremely strong. By this time, the entire oil refining industry was in the hands of the British. They owned oil fields, transport networks, and an oil refinery in Abadan. The managers, of course, were also exclusively subjects of the British Empire. But perhaps the most paradoxical fact is that Persia did not receive oil from APNK for domestic consumption, and the Persian government was forced to import it from the Soviet Union.
In order to somehow change the situation, in 1928 Reza Pahlavi demanded a revision of the D’Arcy concession. The following demands were put forward: the Persian government grants APNK a new concession for 60 years, and in return APNK agrees to reduce the concession area, completely renounce the exclusive right to transport and provide the Persian government with a significant stake.
On the banks of the Thames, such conditions were considered excessive and were rejected. Negotiations continued unsuccessfully for another four years.
Distribution of Anglo-Persian kerosene (Naft-e Irani)
During this period, the situation in Persia became catastrophic. Inflation was huge. There was a catastrophic lack of money for the military, transport and educational reforms that had begun. Due to the economic depression of 1929, Persian oil revenues declined rapidly, but, oddly enough, at a much faster rate than APNK's revenues fell. In addition, royalty payments for 1931 were significantly reduced, and this despite the fact that over the past ten years the company transferred less money to the Persian government than it owed under the agreement. As a result, in November 1932, Reza Shah canceled the APNC concession.
The British refused to accept the annulment. The issue was sent to the League of Nations, which called on both sides to come to a mutually acceptable solution. Negotiations continued and a new agreement was signed on April 29, 1933. APNK received a new concession for 60 years (i.e. until 1993), but in return it made certain concessions: the concession area was reduced by more than four times, royalty payments were increased, 20% of the company's shares were transferred to the Persian government, and oil for Iran had to be sold at lower prices than for other consumers.
Tanks line the streets to ensure order during the return of Shah Reza Pahlavi
However, if you look at the terms of the agreement more closely, it becomes clear that APNC did not make excessive concessions for itself. She had the right to choose which oil fields to keep for herself, making a choice, of course, in favor of the richest and most promising ones, and the amount of annual payments to the Persian government was less than tax deductions in British treasury. And most importantly, the British Empire retained for itself a source of uninterrupted oil supplies.
In 1935, Reza Shah changed the name of the country from Persia to Iran. And the Anglo-Persian Oil Company became known as the Anglo-Iranian Oil Company (AIOC).
In 1909, on the initiative of the British Admiralty, the Anglo-Persian Oil Company (APOC) was created. And in 1935, Reza Shah changed the name of the country from Persia to Iran, and the Anglo-Persian Oil Company became known as the Anglo-Iranian Oil Company (AIOC). Rosbalt continues to talk about how the British “conquered” Iranian oil (read the beginning).
Changes
The reign of Shah Reza Pahlavi ended in 1941, with the British again playing a decisive role in this, who helped him come to power in 1921. The fact is that with the beginning of the Second World War, the Shah actively expressed his sympathies towards Hitler and Mussolini. By flirting with new potential allies, he hoped to eventually remove the British from Iran. However, without waiting for the Shah to move from words to any action, on August 25, 1941, British and Soviet troops crossed the Iranian border. Moscow could not allow a pro-German Iran to become a launching pad for an attack on the USSR. And already on September 16, Reza Shah was forced to abdicate in favor of his son Mohammad Reza.
The occupation of Iran ended in 1946. But despite the withdrawal of British troops, London's control over Iranian political and economic life did not become weaker. After the end of the war, AINK further expanded production. By the late 1940s, the Abadan refinery was the largest in the world, and Iran was the leading oil exporting state in the Middle East. But all this did little to restore the country and improve the lives of the population, since contributions to the Iranian government from oil sales were extremely insignificant.
In 1949, in the wake of popular discontent, the opposition movement National Front, consisting of several organizations, was created. Its leader was Mohammed Mossadegh, one of the most prominent politicians Iran of the twentieth century. The son of a Qajar princess and minister of finance under Nasir al-Din Shah, Mossadegh received an excellent education at the Paris Institute of Political Sciences, as well as at a law school in Switzerland, where he received a Doctor of Laws degree. Upon returning home in 1914, he began to take active participation V political life countries, proclaiming as their principles national revival and the end of foreign control over the economy and politics of Iran.
Muhammad Mossadegh (1882 - 1967)
With Reza Pahlavi coming to power, Mossadegh was forced to go into exile due to constant criticism of the current regime, so he returned to active political life only after Mohammad Reza ascended the throne.
In 1949, the National Front was elected to the Iranian parliament, the Majlis. By this time, Mossadegh had set himself the main task: transferring the oil industry to Iranian control. In March 1951, Mossadegh introduced a bill on the nationalization of oil fields, which was immediately passed. Shortly thereafter, on April 28, 1951, Mossadegh was elected Prime Minister of Iran. The Shah was forced to approve this appointment. And already on May 1, 1951, the law on the nationalization of the oil industry came into force.
In other words, Mossadegh took oil from the Anglo-Iranian Oil Company, and therefore from the British government. At the same time, AINK was asked to hold negotiations to determine compensation for the nationalized assets.
As expected, this led to direct confrontation between the Mossadegh government and Britain. In London, it was decided to put pressure on the Iranian prime minister to achieve a favorable solution to the issue (for England, of course), and if this could not be achieved, to remove him from power.
Guests in the house of Mohammed Mossadegh.
At first, Great Britain turned to the International Court of Justice and the UN with a request to resolve the dispute over the nationalization of oil. As a result, it was recognized internationally that Iran has every right to control its oil, and the parties were called upon to come to an agreement. London twice tried to come to an agreement with Mossadegh, offering to divide oil revenues on a 50/50 basis, but failed. As a consequence, the British refused to engage in direct dialogue with Mossadegh.
After this, England began an economic blockade of Iran. Back in May 1951, the Anglo-Iranian Oil Company began to reduce production, and tankers stopped coming to the port of Abadan to load oil. By the end of July, the world's major oil companies had joined the blockade. After the failure of the negotiations, AINK announced that it would take all possible legal measures against any company buying Iranian oil. Britain has also asked its European allies to stop their citizens trying to get jobs with the newly created National Iranian Oil Company (NIOC).
CONSPIRACY
After it was not possible to reach an agreement with Mossadegh, the removal of the Iranian prime minister from power became goal number one. The operation plan was developed by the beginning of the summer of 1951. At the same time, it was obvious that ordinary resignation in this case would not be enough. Given Mossadegh's enormous popularity, it was also necessary to discredit him in the eyes of the people.
Then Great Britain turned to its closest ally, the United States, for help. If successful, Washington was promised a significant share of the Iranian concession. In addition, the British decided to play the anti-communist card, arguing that under Mossadegh, Iran would sooner or later fall into the sphere of influence of the Soviet Union (and then Iranian oil would probably have to be forgotten).
However, despite the tempting offer for access to Iran's oil resources, the British plans initially did not find support in the White House. First, the Americans hoped to turn the nationalization of oil to their advantage. Secondly, the Truman administration feared that if the operation failed, Iran would finally leave the Western sphere of influence and turn its sympathies towards the USSR. In addition, Mossadegh also turned to the United States for help. During his official visit to America in the fall of 1951, he managed to convince Harry Truman of his anti-Marxist positions.
The American press was also favorable to the Iranian leader. Moreover, at the end of 1951, Time magazine named Mossadegh man of the year. As a result, until Eisenhower's election, Washington insisted on continuing negotiations between Great Britain and Iran.
Mohammed Mossadegh lies in bed, talking to Allahyar Saleh.
Meanwhile, relations between London and Tehran were completely damaged. In the autumn of 1951, Churchill again took over as prime minister. Regaining access to Iranian oil was one of his main goals. Let's not forget that it was largely thanks to his recommendations that the British government bought a controlling stake in the Anglo-Persian Oil Company. Britain continued to pressure the Shah to dismiss Mossadegh and appoint pro-British politician Ahmed Qawam.
In turn, knowing about the behind-the-scenes games of Britain, in July 1952, Mossadegh approached the Shah with a proposal to reshuffle the government, according to which, in addition to the post of prime minister, he would hold the post of minister of defense. The Shah refused. Then Mossadegh took a risky step and resigned. Qavam was appointed as the new prime minister. However, the British joy was premature. As a result, mass protests took place throughout the country. National Front activists took to the streets chanting “Mossadegh or death!” The speech was supported by the clergy. As a result, Qawam voluntarily resigned, and Mossadegh again became prime minister, receiving at the same time the post of minister of defense.
Iranian Prime Minister Mohammed Mossadegh during an interview.
On October 16, diplomatic relations with London were severed, and at the very as soon as possible All employees of the British embassy and consulates were expelled from Iran. Given that by this time many British employees had already been forced to leave the country, the UK intelligence network was seriously damaged. Accordingly, the head of MI6's Tehran station, Christopher Montagu Woodhouse, traveled to Washington to once again ask for support for the plan to overthrow Mossadegh.
This time, the Americans reacted to the idea much more favorably, which is easily explained. The first reason is that the owner of the White House changed - in November 1952, Dwight Eisenhower was elected as the country's new president, on whom the British talk about Mossadegh's imaginary pro-Soviet attitude had a much stronger effect than on Truman. And the second (and perhaps the main) reason is that the United States itself failed in its attempts to come to an agreement with Mossadegh regarding Iranian oil. In the fall of 1952, the United States proposed a plan to the Iranian prime minister, which provided for the creation of a consortium consisting of the world's leading oil companies (of course, including American firms), which would buy oil from NINK. The idea was rejected. And soon Washington’s position regarding the overthrow of Mossadegh changed - the British received consent for the United States to participate in the coup in Iran.
In the shortest possible time, the plan to remove Mossadegh from power was finalized. On the American side, the development of the operation was led by John Foster Dulles, US Secretary of State, and his brother Allen Dulles, appointed director of the CIA. It is not without interest that both brothers were partners in the famous law firm Sullivan and Cromwell, where they worked before moving to public service (John Foster was even its head for quite a long time). And one of the main clients of this company was... the Anglo-Iranian Oil Company.
Communist workers at a demonstration with posters on the topic of overthrowing British oil dominance during the Anglo-Iranian oil confrontation
Operation Ajax
The overthrow plan was finally approved by the British and US governments in June 1953, but the first steps towards its implementation began even earlier. The operation, codenamed Ajax, was entrusted to CIA officer Kermit Roosevelt, grandson of US President Theodore Roosevelt. It was decided that the post of prime minister would be taken by General Fazlollah Zahedi, Mossadegh's longtime political enemy. Therefore, one of the main components of the secret operation was his preparation and detailed instructions. The first contacts with Zahedi, who, by the way, was arrested by the British in 1943 for collaborating with the Nazis and exiled to Palestine for 3 years, took place in mid-February 1953 through his son Ardeshir. General Zahedi accepted the idea of a coup with great enthusiasm and expressed his readiness to cooperate with the Americans in everything.
It was also necessary to prepare public opinion and gain the support of Shah Mohammad Reza. The first task turned out to be quite simple. Iran's long-standing problem helped here - corruption in all sectors of the country's life. Arriving in Iran in June 1953, Roosevelt and his assistants began to hold meetings with members of parliament, clergy, military personnel, journalists, publishers, and public figures, backing up their arguments with significant bribes. They had enough money for this - the CIA allocated $1 million for the operation. In 1953, this was an impressive amount.
Propaganda began to unfold in the country accusing Mossadegh of corruption, anti-Islamic and anti-monarchist views, as well as collaboration with the communist Tudeh party. IN different cities countries began to hold anti-government protests, the participants of which were pre-paid a fee. As a rule, such demonstrations led to clashes with Mossadegh's supporters, which ended in bloodshed. The struggle also unfolded in parliament. As a result, by the end of July, the work of the Mejlis was simply paralyzed.
Soldiers on duty during riots in Tehran. November 1953
The biggest difficulties arose with the Shah, whose consent was necessary to give the coup legitimacy. He had to sign two decrees: one on the resignation of Mossadegh, the other on the appointment of Zahedi as prime minister. However, the Shah at first flatly refused to act in accordance with the plan, fearing that if the plot failed, he might be left without the support of Britain and the United States, alone with the army and an angry crowd, and lose his throne. To convince him, it was decided to act through his sister, Princess Ashraf, who lived in Paris. At first, like her brother, she also refused to participate in the operation. However, after a personal meeting with CIA and MI6 agents, she changed her mind.
They say that a significant amount of money and mink coat. At the end of June, the princess flew to Tehran and met with her brother. However, her mission ended in failure.
Then they turned to General Norman Schwarzkopf (father of the same General Norman Schwarzkopf Jr., who commanded Operation Desert Storm in 1991) for support. In the 1940s, Schwarzkopf headed the US military mission to the Iranian gendarmerie, and the Shah was known to sympathize with him. Schwarzkopf held a number of meetings with the Shah, persuading him to sign decrees. Kermit Roosevelt also had several meetings with him. However, Mohammad Reza still hesitated and demanded guarantees of support for the coup by the US and British governments.
Guarantees were provided that Operation Ajax was approved by the authorities of both countries. According to the agreement, Churchill made sure that instead of the usual daily phrase “The time is midnight,” the BBC broadcast “The exact time is midnight.” And President Eisenhower, at a meeting of US governors in Seattle, which took place on August 4, made a sudden retreat from the text of his report and declared that “The United States will not sit idly and watch Iran fall behind the Iron Curtain.” The Shah understood everything and promised to think about it. As a result, he signed both decrees.
Oil refineries closed in Abadan during the Anglo-Iranian oil standoff
On Saturday, August 15, Colonel Nematollah Nassiri delivered a decree to Mossadegh about his abdication from power. However, Mossadegh was aware of the impending coup, and such a visit did not take him by surprise. He announced that the decree was a fake, Nassiri was arrested. Troops loyal to Mossadegh set up checkpoints throughout the city. Zahedi was put on the wanted list. Opposition deputies, officers suspected of supporting Zahedi, as well as the minister of the court were also arrested. The Shah fled in panic first to Baghdad and then to Rome. In fact, the operation was disrupted.
Roosevelt and his team were forced to improvise. Zahedi was transported to a secret apartment, where he remained until the end of the coup. A series of actions were then taken. First of all, the Shah's decrees were published on the removal of Mossadegh and the appointment of Zahedi. Two reporters then interviewed Zahedi's son, Ardeshir. He spoke about the decrees and described Mossadegh's attempt to arrest his father as a coup, since Zahedi was legally appointed prime minister. The interview was quickly published in The New York Times and other publications.
Next, it was necessary to enlist the support of the military. Declarations began to circulate in the army calling for support for the Shah. They also turned to garrisons in other cities of Iran for help. As a result, a column of tanks and armored vehicles was brought to the city.
On August 17, demonstrations began in Tehran, the participants of which were paid in advance. There were calls on the streets and on the radio to remove Mossadegh from power and return the Shah to the country. The CIA hired people who, under the guise of supporters communist party There were pogroms in the city. They were soon joined by real Tudeh members, unaware that this was a provocation.
The actions of communists, real and imaginary, infuriated much of the population. Mossadegh was accused of collaborating with the communists. The number of Zahedi's supporters has increased. Demonstrations continued over the next two days. Mossadegh himself refused to send the army to quell the unrest, not wanting to plunge the country into civil war. On the same day, tanks approached his house and the assault began. Within a few hours, about 300 people died, everything around was destroyed by artillery fire. Mossadegh was forced to flee. The next day he gave up.
Demonstrators carry posters of a Korean child, using the death of Haj Ali Razmara for anti-American propaganda
Afterword
The Shah returned to Iran in triumph. Zahedi became prime minister. Diplomatic relations with Great Britain were restored. Mohammed Mossadegh spent three years in prison. He remained under house arrest until his death in 1967.
The issue around Iranian oil, which served as a bone of contention, was also resolved. The plan proposed by the United States to Mossadegh at the end of 1952 was taken as a basis. In 1954, Zahedi's government entered into an agreement with the International Petroleum Consortium, giving it the right to extract and refine Iranian oil for 25 years, with the possibility of extending the agreement.
Iran received 50% of oil sales, which by this time was the norm in the world oil market. 40% of the consortium's shares were divided equally between five American oil companies (Chevron, Exxon, Gulf, Mobil and Texaco), 6% was received by the French company Compagnie Française de Pétroles, 14% by Royal Dutch Shell. The Anglo-Iranian Oil Company, which in the same year changed its name to British Petroleum, retained a 40% stake. The company also received compensation from the Iranian government for damages incurred as a result of the nationalization of oil in the amount of 25 million pounds sterling. And given that Royal Dutch Shell is a joint British-Dutch venture, in fact the British managed to secure a controlling stake.
Anglo-Iranian Oil Company changes its name
But still, Great Britain lost the influence it had on the political and economic life of Iran. For a long time, Foggy Albion flawlessly played the Iranian card in order to ensure its national interests. Formally, Iran was never part of the British Empire, but de facto for almost half a century it was in the position of its colony. This control was ensured solely for one purpose - access to oil. Without this, Britain would not have been able to maintain its status as a Great Power in the twentieth century, as Winston Churchill was well aware of when, in the spring of 1914, he insisted that the government buy a controlling stake in the Anglo-Persian Oil Company.
Time has proven him right. During both world wars, the constant supply of oil from Iran provided the British army and navy with cheap fuel. This contributed to the fact that in both 1919 and 1945 Great Britain was among the winners. As for BP, the successor to AINK, it is still one of the leading oil companies in the world.
In conclusion, I would like to draw attention to this point. When the Anglo-Iranian oil crisis broke out in 1951, a British genius once again manifested itself in the fact that London was able to solve its problems with someone else’s hands. Despite the fact that the plan to overthrow Mossadegh was developed by the British, its implementation was entrusted to the States. During the coup, the American intelligence services did all the dirty work, while the British were “modestly content with playing second roles.” And the roots of the fact that the number one enemy for Iranians today is the United States, and not Britain at all, largely lie in 1953.
Since the Islamic Revolution of 1979, Mossadegh has been revered as national hero, and the day on which the law on the nationalization of oil was adopted is a holiday. And thanks to the active actions of the CIA, in the historical memory of Iranians, Operation Ajax is associated not with Great Britain, but with its former colony. Against the backdrop of these events, the atrocities of the AINC faded into the background for several decades.
In the end, leaving gracefully is also an art that is not accessible to everyone.
Tatyana Khruleva - http://www.rosbalt.ru/
And here is some more historical information on the topic of England, maybe someone will be interested: or here, but here are interesting materials, like The original article is on the website InfoGlaz.rf Link to the article from which this copy was made -
At the beginning of this year, Iran, which had been under Western sanctions for several years, which did not allow it to supply “black gold” to the European market, nevertheless received the legal opportunity to resume oil exports to Europe.
Let us recall that Iran got rid of most of the restrictions imposed on the country. international sanctions January 16 this year On this day, the IAEA presented a report in which it confirmed the readiness of the country’s authorities to implement the program created for it through long negotiations to significantly reduce its nuclear potential. The European Union and the United States later confirmed the lifting of economic and financial restrictions on the Islamic Republic related to its nuclear program.
The country was able to resume oil supplies, carry out foreign trade operations, and gain access to tens of billions of dollars that were frozen in its accounts in foreign banks.
The first batch of Iranian fuel in the amount of approximately 4 million barrels was sent in tankers by sea from Iran to Europe already in February of this year.
Managing Director of the Iranian National Oil Company (INOC) R. Javadi said that half of the first shipment, 2 million barrels, was purchased by the French oil and gas concern Total. The remaining volume was purchased by two companies from Russia and Spain. The Iranian did not specify which companies these were.
Later it became known that one of the first buyers of Iranian oil was the Swiss company Litasco, the largest trading division of the Russian Lukoil, trading in Europe, the Mediterranean, North and West Africa.
It was reported that the company purchased 1 million barrels (137 thousand tons) of oil for supply to the Petrotel oil refinery (capacity - 2.4 million tons) located in the Romanian city of Ploiesti (capacity - 2.4 million tons), owned by Lukoil.
In addition, the 275-meter Monte Toledo tanker transported 1 million barrels of Iranian oil to a refinery in the Spanish city of Algeciras in the south of the country. Delivery of the cargo took 17 days.
On the eve of the dispatch of the first tankers with Iranian raw materials, an interesting statement was made by Deputy Minister of Energy of Russia A.B. Yanovsky that Lukoil was discussing the possibility of swap (exchange) oil supplies to Iran from its fields in the Caspian Sea. The swaps suggest that Russian hydrocarbons will go to northern Iran, and in exchange Iran will provide the Russian company with oil in the Persian Gulf.
It is worth noting that Lukoil has 8 oil and gas projects in the Caspian Sea. In 2010, the field named after. Korchagin. Another major project is the field named after. Filanovsky is planned to be launched in 2016. Exchange deals with Iran are a guarantee of the sale of Caspian oil, which benefits the Russian player in conditions of fierce competition among suppliers.
According to information from the head of the oil field exploration department of the INNK, H. Kalavanda, Lukoil entered into two projects for hydrocarbon exploration in the Khuzestan province in southwestern Iran. The sites are located near the large Dasht-Abadan oil field and the northern part of the Persian Gulf. The contract value is estimated at $6 million.
It is noteworthy that Lukoil worked in Iran for several years, together with the Norwegian Statoil, developing the Anaran project (reserves - 2 billion barrels of oil). In 2005, with the participation of Russian oil workers, the Azar oil field was discovered. Production at the Anaran block could have reached 5 million tons by 2010 (Statoil estimate), but sanctions prevented it: Lukoil withdrew from the project and recognized losses of $63 million from the impairment of investments in Iran.
In this regard, the desire of the domestic company to return to the Iranian market is quite understandable. Of course, the investment climate in Iran is not so attractive yet, but the country is actively trying to improve it, while simultaneously reducing risks for potential investors in the economic and legal planes.
Under Iran's Foreign Investment Promotion Law, the Islamic Republic offers foreign companies incentives to operate in undeveloped areas and special economic zones, as well as discounts on the price of oil and gas used as raw materials.
In addition, Iran guarantees the absence of discriminatory measures against foreign investors.
It is no secret that the Iranians are preparing a new model of an oil contract, the so-called integrated oil contract, which will contain conditions similar to a production sharing agreement (PSA).
In accordance with the current draft of the new agreement, foreign companies will be able to enter into a PSA with INNK (or its corresponding “subsidiary”) to manage projects in the field of exploration, development and production of oil. At the same time, foreign companies will play the role of an assistant in the management of such projects, but will not be given ownership rights to the reserves. Once production begins, foreign contractors will be paid shares of the project's revenue in installments, and payment terms will be flexible. They can be adjusted as the project develops.
The new contract model will cover a longer period of time, from 20 to 25 years, which is twice the duration of the “buy back” contracts that Iran has long provided to its foreign counterparties.
An important nuance: an integrated oil contract will include, along with the exploration, development and production phases, the possibility of including a phase of applying enhanced oil recovery methods. This is another fundamental difference between the new agreement and “repurchase” contracts, which relate only to the exploration and development phase.
To facilitate the transfer of knowledge and technology, new agreement will oblige international contractors to use a certain share of national goods to produce products. It will be 51%.
Having reduced for investors and contractors the degree of legal risks that have always worried foreign companies, Iran plans to sell more than 50 gas and oil projects worth about $30 billion to foreign companies in the future.
In this regard, Tehran reacted very quickly to the intensification of cooperation with Russian company"Lukoil".
First, Vice President E. Jahangiri stated that the Islamic Republic during February of this year. will increase oil exports to 1.5 million barrels per day. Iranian exporters will reach the level of 2 million barrels per day by the end of March this year, and not by the fall, as Oil Minister B. N. Zanganeh promised immediately after the actual lifting of sanctions.
Then Iranian Minister of Economy and Finance A. Tayebnia made a similar statement. “After taking appropriate steps and returning Iran to the world oil market, it is expected that sales of Iranian oil will soon return to the level of 2 million barrels per day,” the minister said.
Let us recall that earlier there was information according to which Iran intends to increase exports of “black gold” to 1.65 million barrels per day from 1.5 million in February 2016.
Basically, the increase in the volume of external supplies was to be achieved through active exports to European countries, where Russia’s position is traditionally strong.
However, even before the introduction of international sanctions against Iran, the share of Iranian oil on the European market was very significant. Now, after the lifting of sanctions, Iran is going to not only restore the positions lost during the sanctions period, but also, if possible, strengthen them.
On the way to this goal, the Iranians are actively dumping (selling raw materials at prices obviously lower than market prices) in Europe, provoking a decline in oil prices. According to trusted sources in the industry, INNK plans to sell about 300 thousand barrels of oil per day under contracts with the French company Total and the Spanish refiner Cepsa.
Iranian Oil Minister B. N. Zanganeh confirmed that the European Union has concluded a contract with the Islamic Republic for the supply of 700 thousand barrels of oil per day. The corresponding document was signed by the parties during the visit of European Commissioner for Energy and Climate M.A. Cañete to Tehran.
At the same time, the Iranian official emphasized that the EU sees Iran as a trustworthy partner in the field of energy supplies. According to the minister, in order to expand and strengthen ties between the parties in the oil and gas sector, it is necessary to constantly conduct the negotiation process.
Iran exports approximately 35% of its daily oil production to Europe, said S. Mohsen, a member of the board of directors of INK. According to him, the export of Iranian “black gold” to European countries is at the highest level since international sanctions against Iran were introduced in 2011.
In March of this year. the country supplied about 1.5 million barrels of oil to foreign markets every day, of which, according to B.N. Zangane, over 500 thousand barrels went to European clients.
At the beginning of April this year. Iran increased oil exports to more than 2 million barrels per day (before Western sanctions, Iranian exports were about 2.6 million barrels per day). Vessel tracking data shows that in the first two weeks of April this year. Tankers carrying 28.8 million barrels of oil left Iranian ports.
The largest importer of Iranian oil in the first half of April this year. China became, and Iran also restored supplies of hydrocarbons to Japan (they were stopped in March).
It is known that the Islamic Republic has resumed oil supplies to Greece. Moreover, Tehran plans to sign several contracts with Europe's largest oil companies.
The general director of the Italian energy concern Eni, C. Descalzi, said that this year the company will receive cargoes of oil and petroleum products from Iran. The Italian top manager, however, clarified that Eni will receive these cargoes as part of covering debts under previous transactions, and not on the basis of a new contract.
It is worth noting that along with the return of lost positions in the European oil market, Iran wants to get a share of the European gas market. The Iranian National Gas Export Company and Italy's largest energy concern Enel signed a memorandum of understanding regarding future cooperation in the gas sector. The partnership will cover both gas production and liquefied natural gas transportation.
This document was one of 7 others concluded by Italian Prime Minister M. Renzi during his state visit (the first after the lifting of sanctions against Iran) to the Islamic Republic, which took place on April 12–13 this year.
A memorandum of understanding was also signed regarding possible cooperation between the Italian pipeline company Saipem (a subsidiary of the energy group Eni) and the Iranian Razavi Oil & Gas Development Company. This document primarily concerns the development of the Tus gas field, located 100 km from Mashhad, located in the northeast of Iran near the border with Turkmenistan. This fishery can produce about 4 million cubic meters. m of gas per day.
He announced the development of cooperation with Iran general manager French oil and gas company Total P. Pouyanne. “Today we are returning to Iran. And the priority for us is gas, as well as petrochemicals - this is a way to monetize gas,” Pouyanne said at a press briefing as part of the 18th international conference for LNG (LNG 18) in Perth, Australia.
At the same time, the CEO of Total noted that, despite speculation in the press, the French company has not yet concluded a single serious deal with Iran in the oil industry. Although at the end of March this year. Iranian Oil Minister in an interview with Reuters said that Iran signed an agreement with the French concern to develop the Iranian South Azadegan oil field.
Thus, despite loud statements, Iran is unable to regain a strong position in the European market, easily pushing aside competitors who have occupied its niche.
Since the lifting of sanctions (January 16, 2016), the country has so far managed to sell only small volumes of raw materials to Europeans, including the Spanish Cepsa, the French Total and the Russian Litasco.
It got to the point that the European Commission became concerned about the prospect of developing oil exports from Iran. Its representatives, led by F. Mogherini, visited Tehran a few days ago and during the visit discussed the development of “black gold” production in the country, and also assessed possible consequences agreement between oil producers, which can be reached without the participation of Iran (it, as is known, did not participate in the negotiations on freezing production in the OPEC+ format, held on April 17 this year in Doha).
Thus, Iran's plans to intensify the production and export of hydrocarbons are very extensive.
That is why Tehran was very skeptical about the initiative of some members of the Organization of Petroleum Exporting Countries (OPEC) and states outside the cartel to freeze the level of oil production at January levels, since during this year it intends to reach the production level of 2010-2011.
The country's proven oil reserves are estimated at 175 billion barrels. Now, according to OPEC, Iran produces about 3.2 million barrels of oil per day. Over the next calendar year, which began on March 22 of this year according to the Persian calendar, the Iranians plan to increase oil production by almost 900 thousand barrels per day (this approximately corresponds to the current production volume in neighboring Qatar).
According to foreign experts, Iran is unlikely to be able to increase the volume of raw material production by almost 30% by the specified date.
In particular, analysts from the International Energy Agency (IEA) in a February report estimated that production capacity in Iran could reach 3.94 million barrels per day only by the end of 2020.
According to the Joint Petroleum Statistics Initiative (JODI), last time Iran produced 4 million barrels of oil per day in 2008. JODI experts agree with their IEA colleagues that the Islamic Republic will most likely not be able to return to these levels until the beginning of the next decade.
The Iranian oil minister does not agree with the proposed assessment, believing that the daily production of “black gold” in Iran will reach 4.6 million barrels in the period from 2016 to 2021.
Even more bold assessments were made by the acting Deputy Minister of Oil of Iran M. Eskhafani. According to him, the total volume of capital investments in Iran's oil and gas industry in the next five years (2016–2020) will amount to $185 billion. Moreover, 85 billion of this amount will be invested in production, 80 billion in petrochemicals, and 10 billion each in oil and gas refining. The Iranian emphasized that the implementation of this plan will allow Iran to raise its oil production level to 5.6–5.7 million barrels per day in the 2020s (the country produced almost this much raw material before the Islamic Revolution, when there were no various international sanctions against Iran) .
According to the author, the expectations of both Iranian officials are unlikely to be met in practice in terms of production volumes and timing. There are objective reasons for this: the “subsidence” of the oil industry during the sanctions period, a shortage of technologies, and an insufficient amount of financial resources.
In the path of Iran's bold ambitions lies another serious “stumbling block” related to the transportation of raw materials.
Having begun sending oil tankers to the shores of Europe, the Islamic Republic encountered unexpected difficulties in transporting its additional volumes of oil. According to the director of international relations of INNK M. Ghamsari, the company cannot insure its tankers.
The fact is that consent to cover insurance risks must be given by the International Group of Mutual Insurance (P&I) clubs. However, only 9 out of 13 members of this group expressed their consent, and the approval of permission requires the support of all participants, without exception.
Tehran does not yet understand how to solve the problem, although it will still have to be solved, since exports from the country are growing, as previously planned.
Back in mid-February this year. R. Javadi said that Iran plans to increase oil production by 700 thousand barrels per day in the near future. As a result of the intensification of production, daily export volumes reached about 1.5 million barrels.
Additional “black gold” is supplied mainly to Europe, with some going to Asia. In both cases, Iranian tankers cover very significant distances, so insurance is necessary.
Recently there were reports that there are many tankers off the coast of Iran, storing about 50 million barrels of oil. Then it became known that ships with 28.8 million barrels of oil had finally left the port. Thus, Iranian crude oil supplies in mid-April fully offset the decline in US production.
However, for technical reasons, Iran will not be able to repeat something similar in the short term. The fact is that many Iranian tankers are not designed to send cargo; they are used as floating storage facilities.
Iran has 50–60 tankers, about 30 of which are parked near terminals specifically for storing raw materials.
Moreover, about 20 tankers need major modernization to meet the standards. Another 11 tankers are currently transporting to Asia, which means that in the near future they are busy and will not be able to transport new oil.
To increase exports to Europe, the Islamic Republic leases some tankers, but there are practically no people willing to provide their reserve ships, since some sanctions against Iran still remain. In particular, a ban on any trading in dollars and the involvement of American companies, including banks.
It is estimated that since the lifting of sanctions in January this year. To this day, only 8 foreign tankers (totaling about 8 million barrels of oil) have transported Iranian oil to European countries.
For comparison: in 2012, Iran could supply this volume of oil within 10 days.
The shortage of ships carrying “black gold” will not have the best effect on the state’s extensive export plans.
In addition to the shortage of tankers, there is another unpleasant moment. Iranian oil logistics is actively being thwarted by Saudi Arabia, the main geopolitical and economic counterpart of the Islamic Republic in the region.
Not long ago, the kingdom banned Iranian ships from sailing in its territorial waters. Moreover, Saudi Arabia tried to prohibit third countries from purchasing oil from Iranian ships. If a tanker was moored in Iran, then it was also denied access to ports Saudi Arabia. Such a vessel now needs to obtain special permission.
In turn, representatives of freight companies say that for them the situation looks ambiguous, but no one wants to spoil relations with Riyadh, so the new restrictions are being observed.
Bahrain also took similar measures against Iran. The Islamic Republic has still not gained access to oil storage facilities in Egypt because the operator of these storage facilities, SUMED, is controlled by three Arab monarchies - Saudi Arabia, the UAE and Kuwait.
All these restrictions greatly constrain the actions of Iranian oil workers, so the volume of Iranian oil that needs to be delivered in the coming months is only 12 million barrels.
Despite the noted difficulties, Iranian officials do not lose their usual optimism. According to Deputy Minister of the Oil Industry for International Relations A.Kh. Zamaninia, Iran is striving for 1 million barrels of additional production per day (from the current 700 thousand barrels per day). Moreover, supply volumes will increase in the summer, since in June this year. Iran is going to introduce a new grade of heavy oil to the world market.
Let us recall that the Islamic Republic planned to present the “know-how” back in March of this year, but then decided that buyers needed time to test new raw materials. The name of this variety has not yet been made public; it is only known that this oil is produced at a field in Western Karun, not far from the border with Iraq. It is also unknown what volumes of new heavy raw materials INNK is going to release to the market.
There are potential buyers of Iranian hydrocarbons (both oil and gas).
Romania, seeking to diversify its sources of raw materials, has become the third (following Georgia and Greece) country in southeastern Europe to turn to Iran about the possibility of importing natural gas from Iran.
In addition, according to A.H. Zamaninia, Romanian oil companies have expressed their readiness to participate in Iranian offshore and coastal oil and gas projects, as well as in the production of equipment.
This topic was discussed in detail during the recent visit to Tehran of Romanian Foreign Minister L. Comanescu.
It is important to emphasize that, according to M. Ghamsari, Iran considers the countries of Eastern Europe as the most important market for the sale of oil and gas.
It is noteworthy that the Iranian-Romanian negotiations started immediately after the first shipment of Persian oil after the lifting of sanctions was delivered to the Petrotel refinery, the largest in Romania and Eastern Europe. What is this refinery like?
The plant is located in the central part of Romania, 55 km from the city of Bucharest. The company processes Urals oil (Russian export mixture) and raw materials from Romanian fields. Oil is supplied to the plant via an oil pipeline from the port of Constanta on the Black Sea. Romanian oil also arrives by rail. Finished products shipped by rail and road transport.
It is very profitable for Lukoil to cooperate with Iran, buying raw materials from it for its Romanian refinery, even in the current difficult conditions for the oil market.
According to company statistics, Lukoil’s foreign refineries earned 200 million in 2015 (there was a loss at foreign refineries in 2014). In 2016, according to the forecast of the first vice-president of the company V.I. Nekrasov, if current conditions remain the same, the result for the year will be even better, since foreign refining is now operating in conditions of high margins (about 7 dollars per barrel).
In addition to Lukoil, there are a number of domestic companies interested in partnering with Iran.
For example, Russian steel pipe manufacturer TMK, which supplies the US oil industry and energy companies around the world, is negotiating supplies to the Iranian oil industry.
According to TMK Vice President for Strategy and Business Development V.V. Shmatovich, the company has already sold a number of pipes to the Iranian energy sector after the lifting of sanctions earlier this year. In the future, the company expects to conclude a long-term contract with the Iranian side during upcoming larger tenders.
Shmatovich also noted the importance of the Iranian market for the company, which, after the sanctions are lifted, hopes to begin operating successfully in Iran again.
It is noteworthy that even before the imposition of sanctions against Iran, TMK successfully supplied fairly large volumes of pipes to the Iranian oil industry.
TMK even built a plant in Volgograd, where it loaded pipes onto barges and sent them first along the Volga to the Caspian Sea, and from there they directly “sailed” to Iran.
In addition to Lukoil and TMK, the large company Rosneft is seriously interested in some oil and gas projects in Iran. However, according to Russian Energy Minister A.V. Novak, until Tehran has determined specific conditions for participation in their projects, it is difficult to say anything definite.
A.V. Novak invited “Iranian colleagues to hold a roadshow of their projects at the St. Petersburg Economic Forum (June 2016), given that key players in the oil and gas market will gather there.” According to the minister, there is no response to this proposal yet.
Let us recall that Iran planned to hold a roadshow of its investment contracts in the oil and gas industry in London in February this year, but members of the Iranian delegation were unable to obtain visas.
The head of the Russian energy department noted back in 2015 that Russia and Iran could invest up to $5 billion in joint projects in the near future. The total economic potential of bilateral projects in various fields was then estimated at $30–40 billion. While the current volume economic cooperation is about $1.8 billion per year.
Considering Iran’s firm intention to gain a foothold in the European market even at low oil prices, pushing traditional competitors towards it, it is advisable for Russia to expand and “debug” the already launched mechanism of joint transactions with this state.
Logistical difficulties encountered in lately Iran encountered while transporting its “black gold” are temporary in nature and should in no way negatively affect the dynamics of the bilateral partnership.
The lifting of international sanctions on Iran has added another source of hydrocarbon supplies, prices for which are already quite low. What could the market mean for it and for international and national oil companies operating in the Middle East?
Iran's potential
1976 became best year for the country's oil industry. Iranian oil was consistently produced at a rate of 6 million barrels per day, and in November of that year this figure reached an unprecedented 6.68 million. At that time, only Saudi Arabia, the Soviet Union and the United States were larger producers.
Then came the revolution, and over the past 35 years Iranian oil has never been produced in volumes exceeding two-thirds of the peak in the mid-70s (though gas played a major role in this), despite the fact that the country's black gold reserves over the past 15 years grew by almost 70% - this is much higher than its neighbors over the same period.
However, the experience of the 1970s still serves as a powerful reminder of what Iran's oil industry is capable of once sanctions are lifted.
Effective measures
United States and UN sanctions imposed on the country since 2011 have caused a significant reduction in Iran's oil production. They were unable to completely shut down global markets as some major consumers - India, China, Japan, South Korea and Turkey - continued to buy significant volumes of Iranian oil.
Nevertheless, the impact of sanctions has been significant. In particular, serious restrictions on the import of technology led to a deterioration in the technical condition of production facilities, which also reduced the quality of Iranian oil. In addition, the extension of the EU ban on tanker insurance has placed serious restrictions on the country's export potential, as more than 90% of the insurance of the global tanker fleet is regulated by European law.
The end result has been a significant reduction in hydrocarbon production, largely due to unplanned shutdowns, with a total loss of 18 to 20% of potential production since sanctions were imposed in 2011. Sanctions on Iranian oil reduced production by 0.8 million b/d, an amount that is now returning to the market.
Where does Iranian oil find its buyer?
Since the restrictions were lifted in January, Iran has sold four tankers (4 million barrels) to Europe, including to France's Total, Spain's Cepsa and Russia's Litasco, according to official data. This is equivalent to only about 5 days of sales at pre-2012 levels, when 800 thousand barrels per day were shipped to European buyers. Many former major clients, including Anglo-Dutch Shell, Italy's Eni, Greece's Hellenic Petroleum and trading houses Vitol, Glencore and Trafigura, are just about to resume operations. The lack of dollar mutual settlements and an established mechanism for sales in other currencies, as well as the reluctance of banks to provide letters of credit, became the main obstacles after the lifting of sanctions.
At the same time, some former major buyers have noted Tehran's reluctance to relax its four-year-old sales terms and show greater flexibility on prices, despite supply exceeding demand and Saudi Arabia, Russia and Iraq grabbing Iran's European market share.
Prospects for 2016
As the lifting of sanctions approached, the global oil market took a bearish turn, with prices falling by 25% between June and August 2015. At the same time, NYMEX futures continued to indicate a soft recovery, with some international agencies predicting In July and August 2015, they stabilized at around $45-65 per barrel, similar to the price range in the period from January to July 2015.
The further direction of the hydrocarbon market largely depends on how much and how quickly Iranian oil exports increase after the sanctions are lifted. There are two main schools of thought regarding this potential increase.
On the one hand, according to the International Energy Agency (EIA), Iran has a production growth potential of about 800 thousand barrels per day, second only to Saudi Arabia. On the other hand, according to EIA forecasts, after the lifting of sanctions at the beginning of 2016, Iranian oil supplies will increase by 300 thousand barrels per day on average per year.
The main reason for such disparate estimates is that the latter gives more weight to the impact of several years of restrictions on the deterioration of the Islamic Republic's mining infrastructure, which now needs some time to increase production. In the end, since mid-2012, due to unplanned shutdowns, Iranian oil gradually began to be produced less by 600-800 thousand barrels per day.
How relevant are these production estimates for the modern global black gold market? An increase of 800,000 barrels per day represents about 1% of today's total global oil supply, which may be enough to cause sharp price changes in a highly competitive environment, but not to oversupply the market. More specifically, in the medium to long term, hydrocarbon prices tend to level off to the cost of producing the last barrel that satisfies demand. Prolonged low oil prices are suppressing capital investment in higher-cost fields; eventually the wells close in and supply dwindles. If the price rises above the marginal price, new investment brings in additional, more expensive sources of hydrocarbons.
In this context, relative to the shift in oil prices in 2014, today's market has a less sensitive cost curve (as the most expensive developments are already profitable). Thus, a small source of cheaper supply will have much less impact on the price than in the tight conditions of mid-2014.
As a result, oil market models suggest that Iran should be able to increase production by an additional 800 thousand barrels per day in 2016. Brent prices in 2016 will most likely remain in the range of $45-65 per barrel, which is consistent with the price corridor already observed throughout 2015.
What will happen in 3-5 years?
In the long term, however, the impact of Iran's return could be more significant. Over the past few years we have seen a wave of new discoveries well above average in the Middle East. The country is unable to fully utilize these reserves due to limited access to the external flow of technology and expertise. As a result, not only has crude oil production fallen, but proven reserve levels are the highest in the country's history. At the same time, current production levels are still far from reaching the level of covering government expenditures.
This, coupled with the fact that Iran (unlike Kuwait, Saudi Arabia and the UAE) does not have a sufficient investment fund to compensate for the budget deficit. This means that Iranian oil will be exported more, which in turn will depend on the state's ability to use the necessary technology and expertise.
The legal framework of the Islamic Republic also represents serious problem for foreign companies wishing to invest money and know-how in the country's energy sector. Iran's constitution prohibits foreign or private ownership of natural resources, and production sharing agreements are prohibited by law. IOCs and other foreign investors are only allowed to participate in exploration and production through buyback contracts. These contracts are essentially equivalent to service contracts, allowing outside investors to explore and develop hydrocarbon deposits on the condition that once production begins, control reverts to the National Iranian Oil Company or one of its subsidiaries, which can purchase the rights under pre-agreed price. In 2014, Iran's Ministry of Oil announced plans to introduce so-called integrated petroleum contracts (IPCs), which operate like or PSAs with a potential duration of 20 to 25 years (twice as long as the duration of repurchase contracts). If this new type of agreement is allowed by law, the country's attractiveness as an investment destination for IOCs and other international players will increase significantly and lead to an acceleration in the development of hydrocarbon reserves.
Prospects for capital investment
By some estimates, new investment could increase Iran's oil exploration and production by 6% per year over the next five years (which is consistent with Iraq's growth rate over the past few years), compared with an estimated 1.4% increase in oil production in Iran. the Middle East as a whole. In this scenario, assuming that demand remains the same, oil prices could fluctuate between $60-80 per barrel by 2020, while in the absence of these events, other things being equal, the cost could be 10-15% higher higher.
At this price range, investment in higher-cost plays such as shale, sandstone or offshore is unlikely to return to pre-2014 levels, although production should continue as long as oil production costs remain low enough to justify the cost , the rapid depletion of such sources will reduce their significance (shale wells, in particular, tend to produce 80% or more in the first 3-5 years). Under these conditions, the release of Iranian oil to the market in additional volumes will hit shale production in the United States, and slightly less on offshore fields in the North and South America, Asia, Africa and Far East Russia. And the rapid depletion of North Sea deposits will lead to their replacement by increased production in Iran and, potentially, in other countries such as Iraq and Libya.
Iranian oil and Russia
The low quality of Russian Urals supplied to Eastern European countries is causing increasing concern among consumers, as it leads to a drop in the profitability of its processing and financial losses. Thus, the sulfur content in oil supplied through the Druzhba pipeline and through the terminals in Primorsk and Ust-Luga exceeds 1.5%, and its density has increased to 31⁰ API. This does not comply with Platt’s specification, according to which the sulfur content should not be more than 1.3%, and the brand density should not be less than 32⁰.
With further deterioration in the quality of Russian raw materials, consumers in Europe will give preference to other varieties - Kirkuk and Basrah Light or Iran Light. The quality of Iran Light oil is comparable to the Urals standard. The density of this brand is 33.1° API, and the sulfur content does not exceed 1.5%.
The lifting of sanctions on the Islamic Republic requires international and national oil companies in the region to review their strategic plans and take into account the challenges and opportunities of the following scenarios.
Foreign investment
Iranian oil on the global market opens up a wide range of potential opportunities for IOCs and other foreign investors, especially with the approval of new IPC contracts. After years of limited access to outside technology and expertise, Iran's mining industry will need outside help, and the state of the country's finances suggests that it is in its best interest to remove any obstacles to quickly receiving that help.
In addition, while production will come first, a similar situation may arise in transportation (pipelines to export growing production volumes), chemicals (gas cracking to produce olefins for export), and refining (to replace oil refining equipment , which was not modernized during the sanctions).
Before the restrictions, Iran was a major importer of petroleum products, so refining capacity can now be expanded to meet local demand, partly due to the low rial exchange rate, which promotes import substitution.
Production in Iran and Iraq is growing, and with the stabilization of the political situation, it is planned to increase it in Libya, which will most likely strengthen and prolong the current scenario of cheap oil. There are a number of strategies that will allow NOCs to mitigate the impact of this.
Exploration and production
The country has opportunities to reduce costs and improve efficiency, particularly related to oilfield services, contractors, and other external costs. With low hydrocarbon prices, global investment in exploration and production of high-cost fields slows, servicers find themselves with excess production capacity and become much more open to revising their rates downward. Additionally, with key commodities such as iron ore now trading at historic lows, significant cost reductions can be achieved through materials management. For Middle Eastern NOCs, whose reserves are still cheap enough to justify continued investment, focusing on improving supply represents a real opportunity to significantly reduce costs without requiring real capital investment.
Recycling
Inexpensive raw materials also mean cheap products from their processing. Since gas feedstocks tend to be supplied more locally, the cost of petroleum products is correlated with crude oil prices.
This means that in conditions of falling demand, quotations for refined oil products decline faster than for gas. At the same time, if Iran enters the market with additional gas crackers, which are relatively easy to put on stream to utilize the growing supply, it will put greater price pressure. Indeed, given that the country has no LNG export facilities (and may take years to build), opportunities to profit from excess gas come down to either building new pipelines (such as the one that now connects Turkey, Armenia and Azerbaijan), or to gas processing. Iran is already actively pursuing the latter option, while at the same time planning additional gas pipelines to meet the feedstock needs of new petrochemical plants in the West of the country. For example, the construction of the 1,500 km Western Ethylene Pipeline is in its final stages. This, coupled with the low operating costs of Iranian plants, will likely make the Islamic Republic the lowest priced producer of light olefins.
This also means that the combined price of petroleum products will expand the use of catalytic cracking. Iran's return to the market will require a review of the comparative profitability of hydrocarbon-based products, and the gas producing countries of the Persian Gulf may realize the comparative profitability of exporting gas in the form of LNG compared to its processing into olefins.
Just as cheap fractions are good for cracking, cheap Iranian crude oil on the market is good for refiners. This will lead to additional investment opportunities in the Gulf - several projects are already underway to increase capacity (not including downstream expansion that could take place in Iran). With financially distressed MNCs and independents in other parts of the world looking to divest from their own downstream assets, Middle East NOCs have an opportunity to pursue attractive mergers and acquisitions.
The lifting of sanctions on the Islamic Republic and the associated increase in hydrocarbon supplies leads to the conclusion that the world, as in the 1980s, is at the beginning of a potentially prolonged period of low oil prices. The Iranian outlook holds new challenges and opportunities, and it belongs to those who quickly and effectively integrate these changing dynamics into their strategic plans.
Vladimir Khomutko
Reading time: 5 minutes
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Prospects for the development of oil production in Iran
After international sanctions were lifted from Iran, another significant player appeared on the black gold market. We will talk in this article about what impact the emergence of Iranian oil may have on the global hydrocarbon market and what are the prospects for this industry in Iran.
The best year for Iranian oil production was 1976. By that time, the volume of production of this mineral was stable at 6 million barrels daily, and at the end of 1976 a historical maximum was reached - 6 million 680 thousand barrels per day.
At that time, only a few countries in the world (USSR, USA and Saudi Arabia) could boast of large daily volumes of oil produced. Iran has become one of the leaders in world oil production.
After the Islamic revolution in the country, for three and a half decades, Iran never produced oil in such quantities. Peak oil production was two-thirds of its mid-seventies peak. And this despite the fact that the reserves of this mineral in Iran have increased by almost 70 percent over the past decade and a half. However, the experience of the 70s of the last century suggests that the potential of this country in the field of oil production is very, very high.
Impact of international sanctions
Sanctions introduced in 2011 by the United States, the European Union and the UN led to a significant reduction in Iranian oil production. Despite the fact that sanctions could not completely cut off this country from the world market (China, India, Turkey, South Korea and Japan continued to purchase Iranian hydrocarbons), the impact of the imposed restrictions was still very significant.
For example, the ban on the sale of modern mining and processing technologies to Iran caused a significant deterioration in the technical condition of mining facilities, as a result of which the quality of Iranian black gold decreased. In addition, the EU ban on tanker insurance significantly limited Iran's export opportunities, since more than 90 percent of such insurance is regulated by European law.
Ultimately, Iranian oil production fell significantly, mainly due to unscheduled shutdowns of facilities with a loss of 18 to 20 percent of potential production. In quantitative terms, due to sanctions, it decreased by 800,000 barrels per day, and after they were lifted, it returned to world markets.
Consumers of Iranian black gold
Immediately after sanctions were lifted, Iran immediately sold; million barrels of its oil (four tankers) to Europe. Among the buyers were such well-known oil companies as the French Total, the Spanish Cepsa and the Russian Litasco. This is a five-day sales volume at the level of 2012, when 800 thousand barrels of this mineral were supplied to Europe daily.
It is worth saying that many former large buyers, for example, Shell (England-Holland), Eni (Italy), Hellenic Petroleum (Greece) and oil trading houses Glencore, Vitol and Trafigura, are only planning to resume purchases.
The main obstacles to the full return of sales of this Iranian energy resource after the lifting of sanctions are:
- inability to conduct mutual settlements in US dollars;
- lack of a clearly established mechanism for selling products in other world currencies;
- reluctance of banks to provide letters of credit for such transactions.
In addition, some of the former regular buyers note that Tehran does not want to soften the terms of sale that existed four years ago, and also does not want to be flexible in its pricing policy. And this is at a time when, firstly, the supply of this raw material on the market exceeds the demand for it, and secondly, the share of the Iranian market in Europe, lost during the sanctions, has already been captured by other suppliers (Russia, Iraq and Saudi Arabia).
Just before international restrictions were lifted from Iran, oil prices plummeted by 25 percent from June to August 2015. Despite the fact that experts predict a gradual return of prices to their previous level and their stabilization in the range of $45-65 per barrel, the further direction of the market trend in this market depends, among other things, on how quickly and by what volume Iranian oil production will grow.
Regarding this, there are two main predictions. According to the first, made by the International Energy Agency (EIA), Iran's potential allows it to increase its daily production by about 800 thousand barrels.
On the other hand, experts from the same agency predict an increase of 300 thousand barrels per day in 2016. This difference in estimates is explained by the EIA by the fact that the second forecast was made taking into account the fact that during the period of sanctions the mining infrastructure of the Islamic Republic has deteriorated significantly, and it will take some time to restore it.
The question arises: how serious is the increase in the export supply of black gold by 0.8 million tons daily? This increase represents approximately 1 percent of global supply. This is quite enough for possible fluctuations in oil prices, but not enough to cause a glut in the market.
More specifically, in the medium and longer term, the cost of hydrocarbon raw materials usually tends to level out at the level of the production price of the last barrel that satisfies demand.
It is also worth considering the fact that the low level of price quotes, which lasts for a long time, sharply reduces the amount of capital investment in the development of new, not yet developed fields, resulting in the production and closure of existing wells in the absence of new fields, and this leads to a reduction in supplies and rising prices. On the other hand, such growth attracts investment (if the price exceeds a certain threshold level), which leads to the emergence of additional and more expensive sources of hydrocarbon raw materials.
Based on the above, most likely the emergence of Iran as a relatively small source of cheaper raw materials will affect the price of oil to a much lesser extent than it did under the harsh conditions of the notorious “summer of 2014.” Most likely, Iran will be able to increase its supply by 0.8 million barrels per day over time, but the quotations of 2016 and early 2017 will still remain in the range from 45 to 65 US dollars per barrel .
If we look a little further into the future (3-5 years), then Iran's return to the global oil market could have a more significant impact. Over the past few years, a whole wave of discoveries of new hydrocarbon deposits has swept across the Middle East, with volumes above average. Iran is not yet able to fully develop these reserves, since this country has limited access to advanced technologies and global experience.
However, the proven volume of oil reserves in this country is currently the highest in its history. In addition, the current level of production development is not yet capable of covering the corresponding government expenditures, and Iran, unlike the UAE, Kuwait and Saudi Arabia, does not have a large investment fund capable of compensating the budget deficit.
As a result, Iran's oil will mostly be exported, but for this it is necessary to pay attention to the regulatory framework of the Islamic Republic, which is a serious problem for cooperation with foreign partners who are ready to invest money and technology in Iran's energy sector. The fact is that the Iranian Constitution prohibits both foreign and private ownership of mineral resources in general, and such a common form of partnership in the world as an agreement on the division of extracted products is prohibited by law.
Foreign investors can only participate in the exploration and production of natural resources through buyback contracts. Such contracts are, in fact, analogues of service contracts, under which foreign investors can carry out exploration and development of found deposits only under one condition - after the start of production, all management of the field is assumed by either the National Iranian Oil Company (NIOC) or one of her "daughters".
The rights to such management are purchased from the investor at a pre-agreed price. Many foreign companies are not interested in such cooperation.
However, there are also shifts in a positive direction. For example, in 2014, the Iranian Ministry of Oil announced its plans to introduce IPC - unified oil contracts, which essentially allow the creation of joint ventures for a period of 20 to 25 years, which is twice as long as existing contracts product repurchase.
If such a new form of cooperation is legislatively approved, the investment attractiveness of Iran in the eyes of international oil companies will increase significantly, and this may lead to the intensification of the Iranian oil industry.
Some analysts estimate that the influx of new investment could boost Iranian oil exploration and production by 6 percent a year over the next five years, which is impressive when compared with the projected 1.4 percent in the rest of the Middle East. If this scenario is realized, provided that the previous level of demand for hydrocarbons remains the same, oil prices may reach $60-80 per barrel in 2020, and if not, then the price may be 10-15 percent higher.
However, if developments are positive for Iran, production must continue as long as oil production costs are low (easy-to-recover reserves) and allow for a quick return on invested capital. And this will lead to the rapid depletion of such fields, which will greatly reduce their importance (for example, a shale well, as a rule, produces 80 percent of its reserves in the first three to five years).
It cannot be said that the appearance of significant volumes of Iranian black gold on the world market will negatively affect shale production in the United States, as well as (albeit to a lesser extent) offshore mining North and South American countries, African, Asian and Far Eastern Russian regions.
The entry of Iranian oil into the world market opens up great opportunities for international oil companies, especially if IPC contracts are approved. After restricting access to the world's leading oil production technologies for several years under sanctions, the Iranian mining industry is in need of outside assistance, and the country's current financial situation implies every interest in removing obstacles to international cooperation in this area.
In addition, since production will be given paramount importance, a similar situation may arise in related infrastructure areas (for example, in the Iranian pipeline system, which will have to transport additional volumes of raw materials, and in the production of petroleum products, whose enterprises have become hopelessly outdated during the sanctions) .
This country has all the capabilities to reduce costs and increase efficiency, for example. oilfield services provided by foreign contractors, as well as reduce other external costs.
For example, the low price of oil, as we said earlier, significantly reduces the volume of exploration work carried out, as well as the development of expensive fields with hard-to-recover reserves. As a result, the companies servicing such work are faced with an oversupply of production capacity, which makes them much more “amenable” in terms of reducing the cost of their work.
For the Middle East's national oil companies, which still have relatively cheap hydrocarbon reserves, to justify continued investment, they need to focus on improving the quality of supply, which will provide a real opportunity to significantly reduce their costs without any real capital investment.
In addition, inexpensive raw materials mean cheap processed products. Unlike natural gas, whose supply is much more localized geographically, the cost of finished petroleum products tends to be correlated with the price of crude oil, which means that in the face of ever-decreasing demand, prices for petroleum products fall at a faster rate than for natural gas. If Iran enters the world market with additional gas cracking units, which are quite easy to put on stream, in the context of constantly growing gas production, this will create serious price pressure.
If we take into account the fact that Iran has virtually no natural gas processing facilities for further export of the resulting products (the construction of which may take years), then the opportunity to gain additional profit from surplus Iranian natural gas comes down to two options: or the construction of new gas pipelines like this , which connects Azerbaijan, Armenia and Turkey, or organizing its own gas processing.
Iran is actively exploring the latter option, planning the construction of additional gas pipelines designed to provide raw materials to new petrochemical plants in the western part of the country. And not only plans. For example, 1,500 kilometers of the Western Ethylene Pipeline have already been practically built and will be put into operation in the near future.
The return of such a major player as Iran to the global hydrocarbon market will require a reassessment of the comparative profitability of products obtained from various types hydrocarbon raw materials. Just as cheap oil fractions are good for cracking processes, cheap Iranian oil is attractive to oil refiners, and this is additional investment opportunities for this state.
Several projects are already underway in the Persian Gulf region to increase throughput(even excluding Iran).
Many international oil corporations and private oil companies, financially distressed by low oil prices, are divesting their refining assets around the world. This situation presents an opportunity for Middle Eastern national oil companies to undertake a number of highly profitable acquisitions and mergers.
The lifting of international sanctions on Iran and the resulting increase in the volume of hydrocarbons offered on the market allows us to assume with a high degree of confidence that the same will happen. As in the 1980s, the world is on the verge of a potentially long period of low oil prices.
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