The Oil Drum: Revenge of the Shia?

The geopolitical situation in the Middle East is becoming more complicated and riskier all the time. This article primarily discusses Iran’s geopolitical strategy, energy policies and energy predicament. In the final analysis sections, Saudi Arabia’s reactions, in the context of the Iraqi civil war, are discussed. The outcomes are not known but it is not a pretty picture, especially for Japan, China and the EU, which depend on Iranian oil exports. Nor, probably, for the rest of us.

While Iraq is the trigger, Iran is the key. It is quite impossible to discuss Iran’s political policies outside the context of their oil production, yet this is done all the time. Usually the talk is framed as worry about their nuclear ambitions. However, even this pending capability can not be understood unless you have also grasped the economic and energy pressures Iran is facing. Therefore, let’s examine Iran’s anticipated oil production, as well as related issues concerning domestic consumption, natural gas and downstream capabilities, in some detail.
Much more after the jump to The Oil Drum.