Attempting to turn the tables on Iran

By: Ingrid Krüger

Iran is among the top three holders of proven oil reserves in the world and is OPEC’s second largest oil producer and exporter. The Iranian state has subsidized domestic gasoline for years, an expensive shortsighted policy, because it could afford it. Since Iran has limited refinery capacity, the oil rich country has made itself dependent on gasoline import. President Obama, who is very concerned with Iran’s nuclear programme, is well aware of this weak spot and sees it as giving him an opportunity to affect Iran’s foreign policy. Last week the U.S. Senate approved a sanctions bill targeting those who export gasoline to Iran.

The Iranian President Mahmoud Ahmadinejad congratulated Obama on his election-win in 2008. Anticipations grew before President Obama’s speech in Cairo last year. The Cairo Speech was held a week before the disputed presidential election in Iran and some months before Iran admitted building a uranium enrichment plant. President Obama then spoke under the banner of ‘a new beginning’. He admitted a ‘tumultuous history’ between the US and the Islamic Republic of Iran, but stressed that the US was prepared to move forward.

Last week, in The 2010 State of the Union Address, Obama’s language had changed. Obama now stated that Iran has become more isolated by insisting on violating international agreements in pursuit of nuclear weapons. ‘[A]s Iran’s leaders continue to ignore their obligations, there should be no doubt: They, too, will face growing consequences. That is a promise.’

If the House and the Senate agree on how to merge their two versions of the sanctions bill, all that is needed for the bill to become law is President Obama’s signature. After years of having tried to please the Iranian public with dirt cheap gasoline, domestic gasoline demand has grown far beyond what Iranian refineries are capable of producing. To please the Iranian public, Iran has become dependent on importing gasoline, despite its vast oil reserves. President Obama is now exploiting this vulnerability in an attempt to turn the tables on Iran.

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