Iran's oil production
Iran's oil production plays a significant role in its economy, with crude and refined petroleum accounting for approximately 60% of the nation's exports as of 2017. The country's oil sector is vital for generating export revenues, which were estimated at $57.4 billion for the fiscal year 2016–2017, reflecting its substantial trading partnerships with countries like China, India, and Japan. The geopolitical landscape surrounding Iran's oil production has been influenced by various historical events, particularly the Iranian Revolution of 1979 and subsequent international sanctions related to its nuclear program. Following the signing of the Joint Comprehensive Plan of Action (JCPOA) in 2015, many sanctions were lifted, allowing Iranian oil production and economic growth to recover temporarily. However, this progress faced setbacks after the U.S. withdrew from the JCPOA in 2018, leading to renewed sanctions and a levelling off of oil production. Iran's oil industry is also intertwined with its commitments to environmental agreements, such as the Kyoto Protocol, as it navigates the challenges of balancing economic growth with climate change concerns. Overall, Iran's oil production remains a complex interplay of economic necessity, international relations, and environmental responsibilities.
Iran's oil production
Historical and Geopolitical Context
In 1979, millions of Iranians succeeded in ousting Muhammad Reza Shah Pahlavi (1941–79), the Shah of Iran and son of Reza Khan, who came to power in 1921 via a coup. While the Shah was popular in the West, some believe he tried to modernize Iran too rapidly and did not adequately adapt his political institutions to the economic and social changes that ensued. Inspired by hopes for democracy, economic prosperity for all classes, gender equality, and a leadership that would not allow Iranian culture to be swallowed up by the West, many Iranian women joined the revolt that stunned the world. The Iranian Revolution was led by Ayatollah R. Khomeini, who had been living in exile in Paris, France.
Today, the Islamic Republic of Iran is a unitary Islamic republic with a unicameral legislative body, the Islamic Consultative Assembly. Since 1989, the spiritual leader of Iran or Rahbar has been Ali Hoseini-Khamenei. The capital of Iran is Tehran, and Farsi (Persian) is the official language. As of 2017, crude and refined petroleum composed 60 percent of the nation’s exports, which totaled an estimated $91.99 billion. Trading partners include India, Japan, China, South Korea, Germany, Italy, United Arab Emirates, and Turkey. According to the US Energy Information Administration in April 2018, Iranian petroleum and natural gas accounted for 57.4 billion in export revenues in fiscal year 2016–17.
The administration of US President George W. Bush called Iran “dangerous” due to the suspicion that it was developing nuclear weapons. Between 2005 and 2013, Mahmoud Ahmadinejad served as president of the Republic of Iran.
In 2006, the International Atomic Energy Agency (IAEA) demanded that Iran halt uranium enrichment for its nuclear program, which Iran claimed was to be used for peaceful purposes. That year the UN Security Council imposed economic and diplomatic sanctions on Iran for failing to suspend its uranium enrichment program. While US president Barack Obama, who was first elected in 2008, eschewed Iran’s pursuit of nuclear weapons, he said “it is important for us to be willing to talk to Iran, to express very clearly where our differences are, but where there are potential avenues for progress.”
Still, negotiations between Iran and other nations over its nuclear program stalled until 2013, when Iranian voters elected a more moderate conservative cleric, Hasan Fereidun Ruhani, as president, with the hope that he could re-establish better relations with the international community and advance Iran’s economy. Secret talks between Iran and the United States took place, and in 2015, Iran, the five permanent members of the UN Security Council, and Germany signed the Joint Comprehensive Plan of Action (JCPOA). Under the plan, Iran agreed to limit nuclear development in exchange for limited relief from sanctions. In 2016, the IAEA confirmed that Iran had complied with the plan and most of the nuclear-related sanctions on the nation were lifted, which helped restore Iranian oil production and revenue, thus increasing the growth of gross domestic product. In 2017, however, economic growth stalled as oil production leveled off.
President Ruhani, campaigning on the promise that the benefits of JCPOA would expand to all Iranians, was re-elected in 2017, the same year that US president Donald Trump entered office. Trump, a Republican, has been critical of the JCPOA, and in May 2018, his administration withdrew the United States from the plan.
Impact of Iranian Policies on Climate Change
Iran ratified the in 2005. The decision was endorsed by the Guardian Council, which discussed Iran’s plan to adhere to the U.N. Stockholm Declaration regarding sustainable development; the Stockholm Declaration put forth principles that might guide the world’s nations to preserve and enhance the human environment. As such, the Office of Climate Change in Iran’s Environmental Protection Agency released a report stating that since the Kyoto Protocol came into force in February 2005, new activities designed to decrease greenhouse gas (GHG) emissions were occurring under the U.N. flexible mechanisms program of the protocol. In addition, it was thought that there was a need to immediately sign the protocol, because an upcoming summit in 2005 was to focus on technology transfer and financial aid to be given by developed, nations to developing, non-Annex I nations, and only parties to the Kyoto Protocol could participate.
Iran as a GHG Emitter
As of 2014, Iran is ranked eighth of the highest GHG emitters. Developing nations, all of whose emissions rose during the first decade of the Kyoto Protocol, include China (now the top GHG emitter), India, Brazil, Mexico, South Korea, Indonesia, South Africa, and Iran. These eight nations accounted for 30.1 percent of global GHG emissions in 2000; the share of GHG emissions was 40 percent for the developing, non-Annex I countries. The developing countries have been increasing their shares; in 1990, the relative share was 32 percent. For the year 2000, twelve of the top twenty countries were Annex I countries, including seven of the top ten emitters. In 2000, the Annex I countries accounted for about 60 percent of the top-twenty GHG emissions. The number-one emitters of each group were the top two emitters overall: the leading developing, non-Annex I country, China, and the leading developed, Annex I country, the United States, now the second highest of the top-twenty GHG emitters. Together, China and the United States account for over one-third of total global GHG emissions.
While the Organization of Petroleum Exporting Countries (OPEC) Gulf States have the highest GHG emissions, data from 2000 show that—of the top twenty emitters—those with highest per capita emissions were the Annex I countries. Australia, the United States, and Canada ranked fifth, seventh, and ninth, respectively. Their per capita emissions (7.0, 6.6, and 6.1 metric tons per person) were approximately double the emissions of the highest-ranked developing country in the top twenty (South Korea, at 3.0 metric tons), and they were six times those of China (1.1 metric tons). Of note, the population density of Iran is 16 persons per square kilometer in a country that is relatively small.
Summary and Foresight
It is indeed a paradox that OPEC countries concerned with manipulating the production of petroleum products so as to affect global financial markets have expressed concern with green energy. In January, 2009, Iran inaugurated its first solar energy power plant, adding a modest 250 kilowatts of solar energy to the country’s energy grid. The power plant uses parabolic mirrored troughs to gather sunlight where it is used to produce steam and generate electricity. This solar thermal plant is part of 4,075 small-scale solar thermal installations throughout Iran, which comprise 3,781 solar water heaters for residential use, and 294 public baths that are heated with solar thermal energy. Putting an economic value on renewable resources makes Iran, with its abundance of sunlight, rich in “solar energy potential.” Iran took its first step toward the large-scale realization of that potential with the inauguration of its first solar energy plant, which was constructed with domestic materials and labor in Shiraz.
Key Facts
- Population: 82,021,564 (July 2017 estimate)
- Area: 1,628,554 square kilometers
- Gross domestic product (GDP): $1.645 trillion (purchasing power parity, 2017 estimate)
- Greenhouse gas (GHG) emissions in millions of metric tons of carbon dioxide equivalent (CO2e): 288 in 1990; 480 in 2000; 650.4 in 2014 (estimate)
- Kyoto Protocol status: Ratified 2005
- Paris Agreement status: Signed 2016
Bibliography
Ardehali, M. M. “Rural Energy Development in Iran: Non-renewable and Renewable Resources.” Renewable Energy 31, no. 5 (April, 2006): 655–662. Identifies problems and difficulties encountered in the socioeconomic infrastructure as related to rural energy development; presents the nonrenewable and renewable energy resources.
Axworthy, M. A History of Iran: Empire of the Mind. New York: Basic Books, 2008. Comprehensive history from Zoroaster and the Greeks to the Pahlavi dynasty.
“Iran.” The World Factbook, US Central Intelligence Agency, 1 Oct. 2018, www.cia.gov/library/publications/the-world-factbook/geos/ir.html. Accessed 17 Oct. 2018.
“Iran Sanctions.” US Department of State, 16 Oct. 2018, www.state.gov/e/eb/tfs/spi/iran/index.htm. Accessed 17 Oct. 2018.
Sagar, A. D. “Wealth, Responsibility, and Equity: Exploring an Allocation Framework for Global GHG Emissions.” Climatic Change 45, nos. 3/4 (June, 2000): 511–527. Explores the framework derived from the climate convention regarding OPEC nations.