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Impact of US Future Energy Diplomacy on Iran's Position and Interests in Energy Market

Source: International Peace Studies Centre (IPSC); translated By: Iran Review.Org

Interview with Seyed Gholamhossein Hassantash

Taking good advantage of energy diplomacy will not only boost a country’s capacities at regional and international levels, but also pave the way for the reduction of international restrictions against that country, thus, helping to greatly increase its national power potentials. In the following interview, such issues as the emergence of modern technologies for production of energy in the United States, existence of huge oil and gas reserves in the US, increased production of energy in that country, as well as the United States energy diplomacy approach to future role of oil and gas in global energy diplomacy, as well as its various security, economic and political consequences for Iran have been discussed with Seyed Gholamhossein Hassantash, an Iranian expert on energy.

Q: What is Iran's position in the United States energy diplomacy?

A: The available evidence shows that, at least under conditions of sanctions, the Americans are doing their best to push Iran totally out of the global oil and gas market. I, however, think that if pressures resulting from sanctions somehow reduce, the position taken by the European countries [with regard to Iran] will not be necessarily the same as the Americans. The Europeans need to diversify their gas supply sources. As I have said elsewhere, when it comes to energy matters, complete commonalty of interests between the United States and Europe, on the one hand, and between the United States and China, India, Japan, and North Korea, on the other hand, is actually lacking and this issue can be taken advantage of by Iran.

Q: What have been the consequences of the United States energy diplomacy for the national and economic interests of Iran?

A: The United States plan to totally cut its dependence on the oil and gas produced in the Middle East and the Persian Gulf region will certainly be disconcerting to other countries in the region, especially Saudi Arabia. Therefore, it may serve as a good factor to cause more convergence among [oil producing] countries in this region. By stripping the United States of its excuses [to impose further sanctions against Iran], and by reducing the pressure of sanctions on Iran, perhaps, we would be able to create new opportunities for energy cooperation with European countries as well as other regional states. In this way, we will be able to somehow reduce the impact of the United States long-term policies. For example, if Iran is supposed to change its nuclear activities in order to pave the way for cooperation with the West, that cooperation can be achieved in the form of a package of comprehensive energy cooperation with Europe. In this way, in return for giving concessions with respect to our nuclear program, we would be able to take concessions [from Europe] in the European gas market. This form of mutually beneficial cooperation will, at the same time, prove that we consider the nuclear energy solely as a supply source for peaceful energy in order to ensure the country’s energy security. As a result, we will take the same approach to any agreement in this field. Such an approach will not only deprive the United States of its current excuses [for putting pressure on Iran], but will also provide us with opportunities which will enable the Islamic Republic to somehow reduce the effectiveness of the United States long-term energy policies.

Q: Will the increase in the United States oil production capacity have a negative impact on Iran's oil strategy and reduce international dependence on Iran's oil resources?

A: It would be naturally like that. Even now, not even a drop of the oil which crosses the Strait of Hormuz is destined for the United States. More than 80 percent of the Persian Gulf oil goes toward the East Asia with the rest being destined for Europe and Africa. Of course, the Americans still need the Middle East oil, but their needed oil is mostly loaded into tankers in port cities situated along the Red Sea (which take in Saudi oil) or along the Mediterranean (where they receive the Iraqi oil). At any rate, increase in [the United States] oil production at any amount, will not only further restrict our maneuvering room in the market, but will also intensify competition.

Q: What is your assessment of the United States energy diplomacy with regard to Washington’s approach to Organization of Petroleum Exporting Countries (OPEC) as well as other major oil exporting countries?

A: It is an unfortunate reality that for many years now, OPEC has not been able to appear as an effective organization in the global energy system and it has not been even able to set the global price of oil. Under conditions when the United States and other industrialized countries see the world’s total energy resources as a single system and have worked out long-term strategies for it, OPEC has remained limited to issues related to crude oil and even lacks a long-term strategy for dealing with those issues. At the same time, the member states of OPEC also lack the necessary convergence which is needed for them to bring about an internal development [in the organization] and come up with a solid strategy. Therefore, I don’t think that the United States is really much concerned about OPEC. At the same time, the most effective member of OPEC, that is, Saudi Arabia has been so far moving along the line of the interests of the United States and other major oil consuming countries. As for the Gas Exporting Countries Forum (GECF), the same problem more or less applies. In addition, unlike crude oil, natural gas still lacks an integrated global market. On the other hand, the secretariat of GECF is situated in Doha, the capital city of Qatar, which is a country that also moves in line with the regional policies of the United States.

Q: What solutions, do you think, Iran can find in order to reduce the force of the negative consequences of the US oil strategy for the Islamic Republic’s energy strategies and approaches?

A: To energize its economic growth and domestic development, and also to avoid the impact of the so-called “resource curse” and the Dutch disease, which are major barriers to development, Iran should take steps to diversify its economic output and reduce dependence on oil exports. This would be also to the benefit of the country’s national security. To achieve that goal, it would be also beneficial for Iran to penetrate into and remain present in the European gas market and obtain a share of that market while taking all the necessary steps to make the most of its geopolitical position in order to turn into a regional energy hub.

Q: What is your analysis of the future prospects of the United States energy diplomacy as well as the relationship between that diplomacy and the economic and political interests of our country?

A: As is clear from what I said in response to previous questions, energy issues are the main impetus behind many political developments in the world. Therefore, I strongly suggest that all officials involved in Iran's foreign policy and diplomatic decisions should be well aware of issues related to energy resources, in general, and oil and gas, in particular. As a result, they should closely follow up on global developments related to these resources. The United States alone produces about 24-25 percent, or one-fourth, of total global energy and it will continue to yield the same amount of energy when it becomes self-sufficient in energy production. Naturally, such a country plays a very decisive role in energy strategies and policies of the world. In addition, the United States has the most powerful and the most effective voice in International Energy Agency, which has the member states of the Organization for Economic Cooperation and Development (OECD) as its members, and also plays a critical role in regulating energy policies of industrialized nations. In addition, the United States sways a lot of influence on major oil and gas producing countries. As a result, these countries practically move in line with the interests of the United States while having full control over major oil pipelines as well as some important gas pipelines. I believe that the United States economy is an economic system based on hegemony. Without hegemony, it would lag behind the rival countries. In addition to the dominance of the US dollar over global economy and many other economic tools which are used by the United States, Washington also uses its energy policy as well as the oil leverage as the most important means of establishing its hegemony in the world. I must note again that the self-sufficiency of the United States in the area of energy will increase the likelihood of more warmongering by Washington in the Middle East and North Africa. Perhaps, the United States would like to shock its major economic rivals by pursuing such warmongering policies in order to slow down the economic growth rate of China and other countries. The fact that the UK did not accompany the United States in its latest warmongering threat against Syria, was both thought-provoking and, at the same time, unprecedented.

... Payvand News - 10/11/13 ... --

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