Trinidad &


Very usefull links



Central Bank
Economic Indicators

Venezuela Energy
& Mines






Centre for
Global Energy




Opinion Forum:

viewpoints on issues in energy, international politics & civilization.


Understanding the Washington-Tehran Deals

By Tom O’Donnell

These on-again, off-again talks involve partial deals about the mutual pacification of Iraq, not a “Grand Bargain” that would finally end the very damaging U.S. sanctions on Iran’s oil sector. Without such an agreement, the danger of a military conflict remains very real

Only a few months ago the Bush Administration was reportedly planning to bomb thousands of sites in Iran. Then, in December, Washington began granting Iran a number of concessions – though both the U.S. and Iran have chosen not to represent these as such. Consider:

• In early December 2007, a U.S. National Intelligence Estimate (NIE) declared that Iran has not pursued nuclear-weapon development since 2003. The next day, Bush, Merkle, Putin 1, and Sarkozy each asserted that Iran still must now halt any enrichment of uranium.

• On about December 16, Russia sent Iran a first ever shipment of nuclear fuel rods for the Bushir power plant under the auspices of the IAEA. Unlike every other time over many years that Russia had threatened to do this, this time there was no hue and cry or dire warnings from Washington. Instead, the U.S. simply stated that this Russian fuel shipment has now removed any excuse for Iran to continue to enrich its own uranium – rather like the assertions made after the NIE was released.

• Early in December, China signed a new multi-billion dollar oil contract with Iran. Even though U.S. and U.N. oil sanctions against dealing with Iran remain in force, the U.S. hardly blinked an eye over this - again, quite unlike after an earlier Iran-China deal in 2004.

• At the end of the month U.S. military leaders and ambassador to Iraq Crocker allowed that somewhere, “high” in the Iranian leadership, there had obviously been a decision to reign in attacks by Shiite militia in Iran, and that this was responsible for much of the substantial decrease in violence there.

In turn, on January 2, Supreme Leader Ayatollah Ali Khamenei said, “Not having relations with America is one of our main policies but we have never said this relationship should be cut forever," "Certainly, the day when having relations with America is useful for the nation I will be the first one to approve this relationship."2

What has happened to cause this sudden turn in the U.S. position toward Iran, and of Iran towards the U.S. – if, in fact, that is what this is? Back in 2003, Iran had offered a “grand bargain” to the U.S. that would have addressed virtually any question over which the U.S. had ever clashed with Iran; but the U.S. rejected it out of hand, willing to accept nothing short of a “regime change” for the Iranian leadership. Has the Administration now quietly agreed to some sort of new grand bargain with Iran? There is no evidence that recent events are anything like a grand bargain; but there is clearly a partial deal evolving between Iran and the U.S. The big questions are: What does it mean for Iraq? And, what are the roadblocks to any “Grand Bargain” that really ends the U.S.-Iran confrontation? As long as any Grand Bargain remains elusive, the possibility, sooner or later, of a U.S. attack on Iran, and a wider Middle East war, remains a very real possibility.

The general outline of the answer to each of these questions has already become clear. But, before we delve into that story, the first thing one must be clear about is that this confrontation was never “really” about nuclear weapons – it’s been about Iran’s oil. To be precise, it has been about how the U.S. does not trust the Iranian clerical government to develop and manage Iran’s vast oil and natural gas resources. For example, it does not trust what the present Iranian leadership might do, down the road, if sanctions on foreign investments in oil were lifted and it became flush with oil profits, able to build up a modern military force in the Persian Gulf (nuclear or otherwise) where 60% of the world’s oil reserves are found. This is one place the U.S. insists on hegemony, it has absolutely no intention of anyone but itself projecting power there. This is the crux of the matter: one U.S. administration after another, not just the present one with its neo-cons, have not believed that the Iranian clerical leadership would function as “reasonable” and “business-like” players (from the U.S. perspective) in oil markets, or vis-à-vis America’s OPEC allies in the Gulf: Saudi Arabia, Kuwait and the UAE.

The U.S. has maintained sanctions on Iran’s oil sector for almost thirteen years precisely to keep it from becoming the major oil power it would naturally become otherwise. The result is that Iran’s oil and natural gas sector never recovered fully from either the revolution of 1979 or the Iran-Iraq War of 1980-88. Blocked since 1995 from the large amounts of foreign investment and oil technology it first tried to acquire in that year (even though that first big deal would have been with a U.S. oil company), and faced with growing population consuming more oil at home, Iran now exports less than half as much oil as it did in the1970’s under the shah. The result is that, even though Iran has the world’s third largest reserves of liquid oil, it now has no effective oil weapon. 3 U.S. sanctions have nullified it. Sanctions have also put Iran’s refineries in such a state of disrepair that the country actually imports over 40% of its gasoline, and its national oil company is in such miserable shape it can extract only two-third’s as much oil from a given well as the world average.4 Not to put too fine a point on this; but, the reality of U.S. and, now U.N., sanctions is that Iran today only takes in roughly the same amount of money per capita on its oil exports as does Iraq – a country whose oil sector is hardly in tip-top shape! This state of affairs is undoubtedly assisted by clerical corruption and mismanagement of the economy, but sanctions on foreign investment in oil have become a grave problem for the Iranian economy and the future of the ruling circles.

Faced with a U.S. regime-change policy, yet denied an oil weapon, and with an economy increasingly being squeezed by the effects of sanctions, Iran cultivated two levers over the past four years to counter U.S. pressure: whatever nuclear threat it could muster, and, later, whatever influence it possesses inside Iraq to frustrate U.S. interests there. Although, fundamentally, the U.S.-Iran confrontation has been about whether post-Revolutionary Iran will ever be permitted to develop its oil sector and be the player it should be in world oil markets, this confrontation increasingly came to be fought out over nuclear issues, and in the past year or two over Iraq as well. On the nuclear front, Iran’s very public efforts to produce enriched uranium and to develop missiles capable of delivering a nuclear warhead are two of the three elements needed for the ultimate development of a nuclear weapon capability. Although the third aspect, an Iranian effort to master the formation of weapons-grade uranium onto a nuclear device, has now been declared non-existent by the NIE, the other two aspects, and especially enrichment technology, remain anathema to the U.S., E.U. and other big powers.5

According to the view I am giving here, both the nuclear issue and to a great extent the Iraq issue, have been nurtured by Iran as gambits to be exchanged for lifting of U.S. oil sanctions and giving security guarantees against any further attempts at regime change. In this context, a security guarantee against regime change means against Washington working to put a pro-U.S. government in place as a pre-requisite to lifting sanctions and Iran taking its natural place in the world of oil.

These are the underlying facts of the matter as Iran and the U.S. now move towards negotiations and to making deals; or, rather, this is a general theoretical framework with which to make sense of the continuing U.S.-Iran confrontation. One has to be clear on this matter of material interests - i.e., about the political economy of Iranian oil, and the role of Persian Gulf oil in U.S. grand strategy - before one can properly understand the significance and limits to the partial deals that the U.S. and Iran are now mutually maneuvering into.

A Deal on Iraq

The present change in U.S. hostility to Iran, as reflected in the NIE, in the delivery of Russian nuclear fuel rods, and in the new Chinese-Iranian oil deal (and we shall soon see on what else), have to do with Iranian cooperation with the U.S. in the pacification of Iraq. It is clear from press reports that the Iranian leadership has decided to follow through on a deal struck with the U.S. during the their first publicly announced face-to-face negotiations that were held in Baghdad’s Green Zone on May 28, 2007 with the Iraqi foreign minister. The Iranians later suspended these talks, apparently in August, shortly before General Petraeus make his report to Congress on September 10 and 11, 2007. It appeared to Iran - and to much of the world - that the U.S. was now in such trouble in Iraq that it indeed might be forced to withdraw. Not only Democratic senators, but now several Republican senators, were threatening to vote for withdrawal. But, by early December, the U.S. Administration had begun to bring the Iranians “back to the table” (i.e., figuratively, if not actually). How did this happen? It was affected by preparations for massive attacks on Iran and ruthless brinkmanship on the part of the U.S., and with the active assistance of both the E.U. and Russian leaderships. Any interest in withdrawal has now virtually disappeared from both sides of the aisle in the Senate. Let us first outline the two main areas of agreement reached in May 2007, in the first publicly announced face-to-face U.S.-Iran talks.

First: The U.S. and Iran agreed to work together to pacify Iraq. In particular, a subcommittee consisting of both U.S. and Iranian second-tier diplomats, described as serious and non-political (i.e., technical), was formed to coordinate U.S. and Iranian efforts to stabilize Iraq. Reportedly the U.S. was to focus on working with its new Sunni tribal allies whose forces they had been arming and training, while the Iranians would work similarly with their Shia allies in the South of Iraq. In each case, the aim was to suppress and eliminate forces hostile to the central Iraqi government. A STRATFOR security analysis put it plainly enough: “Translation: The two countries will create a purge committee; the United States will kill any Iraqi Sunnis who do not cooperate, while the Iranians do the same to rebellious Iraqi Shia.“

Second: Iraq’s army would not be allowed to develop a capacity to project force outside the borders of Iraq; it would forever be restricted to being solely for the internal control of the country. To guarantee Iraq’s sovereignty, the U.S. would permanently station forces in Iraq. An attack on Iraq would be an attack on a U.S. protectorate, akin to Saddam’s attack on Kuwait in 1991, and would bring similar reaction. In short, Iraq is to join the ranks of Saudi Arabia, Kuwait and the UAE as a U.S. oil-state protectorate. This is, of course, precisely what the U.S. and Britain wanted all along from the invasion of 2003.

In retrospect, at least, it should now be clear that the extremely intense back-and-forth dance of accusations and threats between Iran and the U.S. in the months before the May meeting – the fiercely heightened brinksmanship that went back at least to October 2006, including the U.S. surge beginning in February 2007 – were maneuvers that, on the one hand, were intended by the U.S. to bring Iran to the table on its terms, and, on the other hand, were intended by Iran to get specific concessions from the U.S. before it would agree to help it in Iraq.

On May 31, following these agreements reached about Iraq, President Bush publicly marked the U.S. commitment to this deal with Iran by saying to the press that he foresees the future role of the U.S. in Iraq to be like that of the U.S. in South Korea over the last 50 years.7 The significance of this seeming non sequitur makes sense only when one realizes that the U.S. has special military treaties with not only Saudi Arabia, Kuwait, the U.A.E., and Egypt, but also with South Korea that make these states U.S. military protectorates. Bush preferred not to bring up any examples from the Middle East and instead chose to use the example of South Korea, where, in any case, U.S. forces have been stationed since the end of the Korean War, to guarantee its sovereignty against any attack by North Korea or any other state – so, the essential point about Iraq’s future was made clearly enough. By November, the Iraqi government had formally requested such a treaty with the U.S.

However, soon after a second and a third meeting in Iraq in July 2007, things began to unravel between the U.S. and Iran. The time came for General Petraeus to deliver his report to Congress. Two security assessments released just beforehand by U.S. intelligence services (not by Petraeus) were extremely pessimistic about any purported progress made by the U.S. surge in pacifying Iraq. This led to the strongest call ever by Democratic senators, joined now by a significant number of Republican senators, for a U.S. “withdrawal” from Iraq. I put “withdrawal” in quotation marks because the Senate mandate under consideration at that time was, as it has always been, not a mandate for a real withdrawal from Iraq and environs, but, rather, for a withdrawal to its borders, to a posture intended to isolate the country from the intervention of any of its neighbors while allowing the seemingly un-controllable Iraqi sectarian warfare to exhaust itself without incurring any further “loss of U.S. lives or treasure.” The logic of this sort of “withdrawal” was that, once the sectarian civil war was completed, and all sides exhausted, after how-ever-many months or years this might take, the U.S. forces would then return from their “withdrawal to the borders” of Iraq and finally establish a U.S.-allied government in Baghdad. Representative Murtha, for example, had often described his earlier plan as such a “withdrawal to the borders” of Iran, to isolate it while the civil war raged.
Then and only then, when the U.S. returned, would huge foreign investments in Iraqi oil begin, that is, under a trusted regime which would accept its fate as a U.S. protectorate like other oil-producing states around the Gulf. This has been the fundamental strategic aim of the U.S. vis-à-vis Iraq since after the First Gulf War and especially since the 2003 invasion - it is also the preferred U.S. strategic vision for Iran itself.

It was at this point, it seems sometime in August, that the Iranian leadership, and most commentators, made a serious misjudgment of the situation facing the U.S. in Iraq and in the U.S. Congress. It appeared to the Iranian leadership as though the Bush administration might actually be forced by Congress to withdraw (albeit in the aforementioned manner). Indeed, if that were to be the case, they reasoned, what was the need to continue to negotiate with the U.S. and make concessions over the future of Iraq? The Iranians quickly (one might say precipitously) cutoff negotiations with the U.S. about Iraq. What is more, President Ahmadinejad made a speech in which he made a very public overture to Iraq’s Arab neighbors that they, together with Tehran, should step into the power vacuum that the soon-expected U.S. withdrawal would create in Baghdad. On August 28, President Ahmadinejad in a live speech on Iranian television, called for a new Iranian-led order in the Persian Gulf region in the wake of an American withdrawal, saying:

" The political power of the occupiers (of Iraq) is being destroyed rapidly and very soon we will be witnessing a great power vacuum in the region. We, with the help of regional friends and the Iraqi nation, are ready to fill this void."

" They are trapped in the swamp of their own crimes and have no choice but to accept the failure and accept the independence and rights of the Iraqi nation."
" If you stay in Iraq for another 50 years nothing will improve, it will just worsen."

" I want to officially announce to you that from our viewpoint the issue of Iran's nuclear case has been closed. Today Iran is a nuclear Iran, meaning that it has the complete cycle for fuel production. 9

Tehran simultaneously made overtures to Saudi Arabia, to reassure it that, were Iran to become the dominant force in the Region after a U.S. withdrawal, the new order in Iraq need not be seen as a danger for it and its Sunni allies. But two things occurred that pulled the rug out from under this bold change of course by the Iranian leadership. One was that it was based on faulty assessment of what Congress would do, which, in turn, is about not making a sober analysis of what U.S. forces had recently accomplished inside Iraq. The other was that the Iranian leadership misjudged the possibility that Washington would retaliate by demonstrating a brutal willingness to make a massive and disproportionate military assault on Iran.

On the first matter, General Petraeus’ report to Congress argued forcefully that the situation in Iraq was still retrievable from the brink of disaster. Most significantly, his report was sufficiently convincing to the majority of both Republican and Democratic senators to halt any serious mandated-withdrawal legislation in its tracks. A sober analysis would seem to be that the U.S. success in rallying Sunni tribal forces, backed up by the show of U.S. commitment as embodied by the surge, and combined with the change in tactics enforced by Petraeus where the U.S. had moved from force protection to Iraqi-population protection, had, all in all, begun to turn the tide for the U.S. In addition, it was very likely the case that Iran’s efforts to reign in attacks by Shia militia beginning in May 2007 (even though these efforts might have now been suspended or significantly lessened) had also greatly facilitated this turn in Iraq. As regards the reduction in Shia militia attacks on both Sunni and government forces as well as on one another, one must not underestimate how the new coming together of Sunni tribal forces together with U.S. occupation forces presented an extremely sobering reminder to Shiite leaders - both those inside Iraq and those inside Iran - of how the British had, some 90 years prior, put the Sunni in charge in Baghdad when it had become impossible to rule Iraq through a Shia regime in Baghdad. In any case, it appears that the Iranian leadership had, since at least October 2007, seriously overestimated the prospects for an immanent, congressionally mandated U.S. withdrawal.

Secondly, President Bush, speaking to the U.S. Veterans Association on August 28, the very same day President Ahmadinejad had publicly called for a new Iranian-centered order in Iraq and the Region in the wake of a U.S. withdrawal, asserted:

“ The attacks on our bases and our troops by Iranian-supplied munitions have increased in the last few months -- despite pledges by Iran to help stabilize the security situation in Iraq [an obvious reference to the May agreement – T.O’D.].

“ Some say Iran's leaders are not aware of what members of their own regime are doing. Others say Iran's leaders are actively seeking to provoke the West. Either way, they cannot escape responsibility ... The Iranian regime must halt these actions. And until it does, I will take actions necessary to protect our troops. I have authorized our military commanders in Iraq to confront Tehran's murderous activities.”10

The U.S. was not going to accept Iran pulling back from the May agreement. In addition, it was not about to allow any thought of Iran filling the political vacuum in Baghdad if in fact the U.S. was ever forced to withdraw. This point was very forcibly made, albeit indirectly through Seymour Hersh. Within a few days of Bush’s speech, Hersh wrote in the October 8, 2007 issue of The New Yorker 11 (which was available some days ahead of the publication date) of the new determination and planning by the U.S. administration and the Pentagon to bomb Iran. How could it be, most observers asked, in a situation where the U.S. is so overextended in Iraq that the administration could possibly be considering a major attack on Iran for regime change there? However, the revealed preparations for bombing Iran were not, per se, intended for regime change in Tehran. No, this time, it was a warning that, if indeed the U.S. were forced to withdraw from Iraq, if its Iraqi regime-change adventure was going to end up as a failure, nonetheless this failure would not present a strategic opening for Iran. Rather, any U.S. withdrawal would be what is known in military science as a “scorched earth” withdrawal.

Bush’s August 28 warning to Iran, and The New Yorker’s expose-cum-threat should be taken together with another, distinctly un-diplomatic statement by Bush at his next press conference on October 17:

“ ... we got a leader in Iran who has announced that he wants to destroy Israel. So I've told people that if you're interested in avoiding World War III, it seems like you ought to be interested in preventing them from have the knowledge necessary to make a nuclear weapon. I take the threat of Iran with a nuclear weapon very seriously. And we'll continue to work with all nations about the seriousness of this threat.

“ Plus we'll continue working the financial measures that we're in the process of doing. In other words, I think -- the whole strategy is, is that at some point in time, leaders or responsible folks inside of Iran may get tired of isolation and say, this isn't worth it. And to me, it's worth the effort to keep the pressure on this government.” 12

Such blunt talk of war, much less of world war, immediately following Hersch’s expose, was widely commented on in the press—precisely as Washington had intended. Bush and the Pentagon were sending a ruthless warning to Iran that the U.S. was perfectly willing to engage Iran militarily, risking a conflict that could easily escalate into attacks from which it might take a generation for Iran to recover.

Nevertheless, there was a certain nuance in these preparations for a U.S. military assault on Iran. This newest threat to bomb Iran (as compared to the previous round exposed by Sy Hersh), was that this was not intended to be a massive, large-scale bombing of tens-of-thousands of economic infrastructure and military sites that would reduce the entire country to a state of utter economic and military ruin; rather, it was to especially targeted at the facilities and personnel of the Iranian Revolutionary Guards (IRG), Recently, the IRG’s Quds Corps had repeatedly accused by Administrations officials as being behind continued assistance to Shiia groups still fighting against U.S. forces and its allies in Iraq in violation of the May 2007 deal. Accordingly, the U.S. had now begun to deemphasize the Iranian nuclear program as the key target for bombing attacks, and would now instead focus on the IRG sites in Iran. In this way the armed conflict would be a continuation of very specific political aims. This is consistent with our view, laid out above, that the Bush administration was now focusing tightly on the specific issue of constraining Iran to cooperate with it in the pacification of Iraq. For the present, this meant putting regime change within Iran on the back burner. Hersh wrote:

“ The revised bombing plan for a possible attack, with its tightened focus on counterterrorism, is gathering support among generals and admirals in the Pentagon. The strategy calls for the use of sea-launched cruise missiles and more precisely targeted ground attacks and bombing strikes, including plans to destroy the most important Revolutionary Guard training camps, supply depots, and command and control facilities.

There was now apparently some analysis in Washington that any Iranian abandonment of cooperation in pacifying Iraq was mainly associated with a specific political faction within Iran. So, to target the country more broadly would be counter-productive, as it would likely rally the entire leadership and nation against the U.S. whereas a tightly focused (yet nonetheless devastating and pre-emptive) attack focused on IRG targets might instead heighten any internal exasperation in leading circles with the IRG and associated hard-line rightist groupings for having mishandled relations with the U.S. – in particular, with President Ahmadinejad for the abandonment of negotiations on Iraq, and making precipitous public threats to fill the political vacuum after an impending U.S. failure there.14 Accordingly, as Hersh wrote:

“’ Cheney’s option is now for a fast in and out—for surgical strikes,’” the former senior American intelligence official told me. ...

“ A Pentagon consultant on counterterrorism told me that, if the bombing campaign took place, it would be accompanied by a series of what he called ‘short, sharp incursions’ by American Special Forces units into suspected Iranian training sites. He said, ‘Cheney is devoted to this, no question.’

Of course, any such engagement could very easily get catastrophically out of hand:

“A limited bombing attack of this sort ‘only makes sense if the intelligence is good,’ the consultant said. If the targets are not clearly defined, the bombing ‘will start as limited, but then there will be an ‘escalation special.’ Planners will say that we have to deal with Hezbollah here and Syria there. The goal will be to hit the cue ball one time and have all the balls go in the pocket. But add-ons are always there in strike planning.’

Apparently, the campaign of highly credible U.S. threats and preparations for warring with Iran had its desired effect in Tehran. Soon, Tehran was giving the IAEA blueprints from its work on nuclear warheads in years past, and signaling its willingness to return to assisting the U.S. in Iraq. New negotiations are to resume sometime in January 2008. They were delayed from mid-December due to “scheduling issues,” although actual back-and-forth U.S.-Iranian quid-pro-quos continue to occur, as non-public discussions take place in some form. And, the technical subcommittee set up last May on the joint pacification of Iraq, was set to begin meeting in the third week of December 2007.

(Actually, there is more to the story of what was done to force Tehran back towards negotiations over Iraq, and it has to do with an arch-typically real- politic deal between Washington and Moscow, in return for which Defense Secretary Gates publicly allowed that the missile defense systems that the U.S. wants to set up in the Czech Republic and Poland, and which Russia strenuously objects to, could “go away” if “the Iranian threat” went away. Immediately after meeting with Secretaries Gates and Rice in Moscow, President Putin personally delivered a message to the Supreme Leader in Tehran under the cover of public smiles and back-slapping between himself and Mr. Ahmadinejad on the same day President Bush made his comment about “World War III.” President Putin delivered a “special atomic message” in Tehran. Iran’s then-chief nuclear negotiator, Ali Larijani, said that "Russian President Vladimir Putin, in his trip to Tehran, had a special message for Iranian officials." Asked if it involved Iran’s nuclear activities, and said: "Yes, Iran's nuclear issue was also a part of it." Supreme Leader A. Khamenei reportedly responded to Putin: "We will think about what you said and your proposal," adding that Iran was "determined to provide our country's need for nuclear energy.")

The long and short of the story to this point is this: if in fact the recent NIE findings that Iran has given up an explicit nuclear-weapon program are part of a quid pro quo between Washington and Tehran, then it is undoubtedly a quid pro quo for an Iranian return to cooperation in the pacification of Iraq. In this view, the NIE release is also a step to prepare the U.S. and Iranian public for a progression of increasingly public steps in cooperation between the two countries in Iraq. However, as I indicated at the start, neither the pacification of Iraq or Iran’s nuclear program are the fundamental issue driving the long-term U.S.-Iran crisis. The larger issue one has to keep in mind, to make sense of all this, is that the U.S.-Iran confrontation is most fundamentally about oil – and Iranian and Persian Gulf oil is in turn very much about U.S. hegemony in the Gulf and its role as the sole superpower in the world beyond. There is still no evidence that the U.S. has accepted the present clerical leadership in Iran as trustworthy to be in charge of re-invigorated Iranian oil production. Iran’s exports could increase perhaps by two-to-three times over five-to-seven years if sanctions were lifted and massive foreign investment and technology allowed to flow in. What guarantees and what limitations on Iranian national sovereignty would the present Iranian leadership have to make for the U.S. to agree to lift sanctions?

Now, with a U.S.-Iranian-Iraqi agreement that Iraq will be a U.S. protectorate, four of the five major oil-producing states around the Gulf will be U.S. protectorates.

Iran remains the only one of the five not reduced to this state of affairs. The Iranian leadership is trading away its ability to disrupt U.S. efforts to pacify Iraq for improved relations and other concessions, including the U.S. NIE declaring its nuclear bomb-making program defunct. But, what does the Iranian leadership now have remaining to bargain away to achieve its ultimate strategic requirement – lifting of U.S. and U.N oil sanctions without a regime change? One doubts that agreeing to not enrich uranium would be sufficient to satisfy Washington on this issue. What, short of conceding to also become a U.S. protectorate of some sort – a state unable to project power in its region and dependant on another for its defense – would satisfy Washington? There is no doubt that Saudi Arabia, Kuwait and the UAE, the major oil-producing U.S. protectorates across the Gulf have leaderships as highly antagonistic to an Iran, after its recovery from oil sanctions and flush with cash, projecting power in the Region. For now, it seems the present deals being made are only partial deals, deals about Iraq, and as long as the fundamental deal over Iran’s oil remains elusive, U.S. forceful regime-change efforts will remain a very real threat for the Iranian people and world peace.

Note of the author – The following graphs illustrate (a) that Iran’s per-capita oil-export income is now reduced to the low level of Iraq’s; and (b) that U.S. sanctions have reduced Iran’s oil output to 2/3 the level it was under the shah.



1. Speaking the next day to the chief Iranian nuclear negotiator, Mr. Jaiali in Moscow.

2. Reuters, from Iranian state television, 3 January 2008.

3. Today Iran exports only 2.4 million barrels per day; but Saudi Arabia alone can easily turn up its pumps by 2 million barrels a day, and U.S. and European strategic petroleum reserves also rather effortlessly replaced 2 million barrels per day during the Katrina emergency. In fact, the combined Strategic Petroleum Reserves (SPR) of the OECD states’ International Energy Agency (IEA) could maintain this level of pumping for well over four years if commercial stocks were also called upon. The psychological shock to oil markets of any Iranian cutoff of oil would be great, of course cause, at least temporarily, a price spike; however, there would be no fundamental oil crisis or shortage. This is why Iran has pointedly always backed away from any such threat, as it would only play into the hands of the U.S. to prepare public opinion for exercising military force against Iran.

4. See especially the Energy Information Agency of the U.S. DOE, Country Analysis Brief (CAB) on Iran.

5. This point was underscored by Henry Kissinger, in his commentary on the NIE. “Misreading the Iran Report: Why Spying and Policymaking Don't Mix” By Henry A. Kissinger, Thursday, December 13, 2007; Washington Post, Page A35.

6. For more detail on the political economy of Iranian and Persian-Gulf oil in U.S. grand strategy, see articles and talks by the present author at

7. “Bush Sees South Korea Model for Iraq,” By Terence Hunt, The Associated Press, May 30, 2007.

8. “U.S. and Iraq to Negotiate Pact on Long-Term Relations” By THOM SHANKER and CARA BUCKLEY, New York Times, November 27, 2007. The White House website also discusses the initial iteration:

9. “Iran says ready to fill vacuum in Iraq left by U.S.,” By Edmund Blair, Reuters, August 28, 2007.

10. “President Bush Addresses the 89th Annual National Convention of the American Legion,” Reno-Sparks Convention Center, Reno, Nevada, August 28, 2007. White House Office of the Press Secretary,

11. “ Shifting Targets: The Administration’s plan for Iran” by Seymour M. Hersh, The New Yorker, October 8, 2007.

12. Press Conference by the President, White House, October 17, 2007.

14. (In fact, it seems, such a cleavage might have now opened up; there are reports of an electoral front formed between two former presidents who otherwise would not be expected to ally: neo-liberal-style reformist and social conservative Rafsanjani, and the clerical-based liberal reformist Khatami, and including former nuclear negotiator and national security chief Larijani.



Tom O’Donnell, Ph.D. in nuclear nuclear physics, University of Michigan, his Ph.D. Dissertation "A Superconducting-Solenoid Isotope Spectrometer for Production of Neutron-Rich Nuclei (136Xe + natC, E/A = 30 MeV/u)" was awarded the Terwilliger Prize, by the Physics Department of The University, the "most prestigeous award given by the Physics Department to a graduate student." Dr. O’Donnell is at present a U.S. Fulbright Scholar, at the Centro de Estudios del Desarrollo, at Universidad Central de Venezuela, Caracas (CENDES-UCV). See O’Donnell articles and talks on Oil and the Middle East at Petroleumworld does not necessarily share these views

Editor's Note: All comments posted and published on Petroleumworld, do not reflect either for or against the opinion expressed in the comment as an endorsement of
Petroleumworld. All comments expressed are private comments and do not
necessary reflect the view of this website. All comments are posted and
published without liability to Petroleumworld.

Fair use Notice: All works published by Petroleumworld are in accordance
with Title 17 U.S.C. Section 107, this material is distributed without
profit to those who have expressed a prior interest in receiving the
included information for research and educational purposes. Petroleumworld
has no affiliation whatsoever with the originator of this article nor is
Petroleumworld endorsed or sponsored by the originator. Petroleumworld
encourages persons to reproduce, reprint, or broadcast Petroleumworld
articles provided that any such reproduction identify the original source, or else and it is done within the fair use as
provided for in section 107 of the US Copyright Law. If you wish to use
copyrighted material from this site for purposes of your own that go beyond
'fair use', you must obtain permission from the copyright owner.

Internet web links to are appreciated.

Petroleumworld 02/17/08

Copyright ©2006 Tom O’Donnell. All Rights Reserved


Your feedback is important to us!

We invite all our readers to share with us
their views and comments about this article.

Write to:

phones:(58 412) 996 3730 or 952 5301 Ohep /
Publisher-Producer:Elio Ohep.
Contact Email:
Legal Information. CopyRight 2002, Elio Ohep.- All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from Petroleumworld or the copyright owner of the material.