Iran: Unstable, troubled oil giant

Country struggles with falling oil production, soaring domestic use as dispute over nuclear program drags on.

…But despite the political bravado, and events in the region that have arguably increased Tehran’s political clout, the country’s oil industry is in serious trouble.

Oil production, which peaked at about 6 million barrels a day in the late 1970s, now hovers at around 3.5 million, according to the U.S. Energy Information Administration (EIA). With worldwide production at about 84 million barrels daily, Iran ranks as the world’s fourth-largest producer.

Moreover, a growing population and economy, combined with huge government subsidies, is leading to a surge in domestic consumption, according to the energy agency.

“Everybody’s buying cars, everybody’s buying air conditioners,” said Peter Beutel, an oil analyst at Cameron Hanover, referring to the growing wealth of many Iranians. “They are saying, with some justification, that they need nuclear power to continue their oil exports.”

CNN/Money