Monday is the deadline for Iran nuclear talks. Negotiators are considering a deal that would limit Tehran’s nuclear enrichment ability, in return for lifting international oil and banking sanctions.
These sanctions helped bring Iran to the talks in the first place—Its markets were cut off, oil exports fell, recession came.
Karim Sadjadpour at the Carnegie Endowment for International Peace has tallied the cost of Iran’s nuclear program, in terms of sanctions, lost revenue and lost investment. His number: $100 billion dollars.
Separately, a former Iranian foreign minister put the cost at $450 billion.
“When you look at these enormous costs and you weigh it against what Iran’s nuclear program can really provide in terms of energy, it’s an economic catastrophe,” Sadjadpour says. “This is a nuclear program which can at best provide only two percent of Iran’s energy needs, and in the process of building this nuclear program, they’ve cannibalized their main source of revenue, which is oil and gas.”
And yet, Sadjadpour notes, Iran’s supreme leader does not make decisions based on economics. It’s politics.
Click below to hear more of Sadjadpour’s interview:
If there is a deal, Iran will want to sell more oil and return to previous levels. This despite today’s global glut, and despite the fact that Iran and other OPEC members are considering overall production cuts. That would put upward pressure on oil prices, currently down some 30 percent from June.
So, which OPEC member would bear the pain of lost business? Likely not Iran, says analyst Amrita Sen of Energy Aspects in London.
“They have already lost out on so many billions of dollars of revenues,” she says. “That’s really where it becomes a challenge for OPEC.”
The group meets on Thanksgiving day.