The increase in US oil and natural gas production could have a dramatic effect on world energy markets, according to Dr Pierre Noel, Sultan Hassanal Bolkiah Senior Fellow for Economic and Energy Security at IISS–Asia.
Dr Noel appeared on CNN yesterday to discuss the future of the global oil market, the effect of sanctions against Iran, and new figures released by the International Energy Agency indicating increased oil and gas production in the United States.
‘US unconventional liquid supply is growing by a million barrels a day each year, which has the potential to revive the growth of non-OPEC supplies,’ he explained. The effect on future oil prices however is unclear, and ‘depends on the supply–demand balance, and it is very difficult to know what’s ahead of us’, he said.
‘Demand is growing rapidly in emerging economies: China, India but also Southeast Asia – so you may actually need this rise in unconventional supply, especially if other parts of the supply picture disappoint.’ US and EU sanctions against Iran, for example, might also make this unconventional supply a necessity.
Dr Noel discussed the effect the sanctions might have on the Iranian presidential elections in June. He explained that the latest round of sanctions were ‘working’ – meaning that the situation was getting harder for the Iranian population – but that this would not necessarily mean the public would choose a leader more open to engaging with the West. ‘The risk that I see politically is that a larger and larger share of the population will actually reward a politician tempted by a hardening of the Iranian position, rather than a softening,’ he said.
He also discussed the security impact that a hard-line Iranian position would have on the region, explaining that Iran’s neighbours were worried about the connection between Iran and the crisis in Syria. ‘I think the governments in this part of the world see the future as a very risky one geopolitically,’ he added.
Watch the video.
For more on this topic, watch the IISS’s May 15 panel discussion on the future of the Middle East oil environment, and read the IISS Strategic Comment on the United States’ falling need for foreign oil.
These days, there are not many things that Arabs agree on. In fact, it may be fair to say they agree to disagree more often than not when it comes to regional policy. But Iran, once the darling of the Arab Street, is finding both popular and government opinion turning against it. And at the heart of the matter lies official Iranian attitude towards sectarianism and the Syrian uprising.
For years, Iran, and especially Iranian President Mahmoud Ahmadinejad, enjoyed the unwavering support of the Arab general public, especially following the 2006 war in Lebanon. Many perceived Iran as the outspoken guardian of the Muslim world; a country that had the guts to oppose compromise in the Arab-Israeli peace process and support Hizbullah in its struggle against Israel. But this is no longer the case, and Iran knows it.
So the Iranian regime is trying to regain some positive influence. It’s partly why Iranian Foreign Minister Ali Akbar Salehi was in Amman, Jordan, recently to meet Foreign Minister Nasser Judeh and King Abdullah II. Jordan’s government welcomed the opportunity to discuss Syria with their Iranian counterparts. But the response was different in Parliament: Bassam al-Manaseer, chairman of the Arab and Foreign Relations Committee of the Jordanian Parliament, called the visit ‘unwelcomed’ and expressed his concerns over ‘suspicious’ Iranian activities in the region.
Read the full article in the Atlantic
By Mona Moussavi, Editorial assistant
This year’s Iranian presidential election race got a lot more interesting last Saturday when former president Ali Akbar Hashemi Rafsanjani registered his candidacy just minutes before the deadline.
The move transforms the race to replace Mahmoud Ahmadinejad, who cannot stand in June’s poll after serving two full terms. Rafsanjani has a turbulent relationship with Supreme Leader Ayatollah Khamenei. And despite being a conservative, he is attractive to reformers as a relative moderate in contemporary Iran.
Attention is now on Khamenei to see how he responds. The more than 600 candidates who have registered to run must all be vetted by the Guardian Council. Khamenei holds sway over the council, which comprises six clergymen directly appointed by the supreme leader, and six jurists nominated by the head of the judiciary (himself appointed by the supreme leader).
By Emile Hokayem, Senior Fellow for Regional Security, IISS-Middle East
Israel’s recent air strikes on Syria were intended as a warning to both Syria and Iran, and to stop weapons falling into Hizbullah’s hands – but they have increased the likelihood of a regional conflict.
Last week, the Israeli air force struck two targets inside Syrian territory. The first seems to have been a shipment of surface-to-surface missiles destined for the Lebanese Shia group Hizbullah (the Fateh-110 is more accurate than anything Hizbullah is known to currently possess, and with a 300-kilometre range has much of Israel within its reach). The second was a major research centre and important storage facility near Damascus, which is administered by units of the elite Republican Guard. Israel had already struck this installation – the Centre of Scientific Studies and Research in Jamraya – in January, allegedly destroying shipments of anti-aircraft missiles destined for Hizbullah.
These strikes add to an already complex political and military landscape in Syria. The Assad regime has deployed its full arsenal of conventional capabilities against the Syrian rebels – and may have even used chemical weapons on a small scale. The rebels are consolidating their hold over much of Syria, but remain too ill-equipped and poorly organised to win the struggle on the battlefield.
The rise of Islamist and jihadi factions has further complicated the picture: better organised and funded, they often spearhead rebel attacks on key regime facilities across the country. They may eventually seize some of the regime’s advanced weaponry.
By Michael Elleman, Senior Fellow for Regional Security Cooperation, IISS-Middle East
Gulf leaders have long been concerned that a serious accident at the Iranian nuclear power plant at Bushehr could expose their citizens to radiation. Bushehr’s location in an area of high seismic activity adds to public anxiety over the reactor’s safety. And on Tuesday, nerves were rattled when a magnitude 6.3 earthquake centred less than 100 kilometres from Bushehr killed at least 37 people, injured hundreds and destroyed homes. The quake was felt across the Gulf in Dubai, Qatar and Bahrain.
Officials tried to reassure observers. ‘The earthquake in no way affected the normal situation at the reactor,’ the Russian company that built the Bushehr reactor, Atomstroyexport, told news agency RIA Novosti. ‘Personnel continue to work in the normal regime and radiation levels are fully within the norm.’ Mahmoud Jafari, a project manager at the plant, insisted to Iranian state media that the quake ‘didn’t create any complications’.
By Dr Pierre Noel, Sultan Hassanal Bolkiah Senior Fellow for Economic and Energy Security
Last week, the presidents of Iran and Pakistan inaugurated the final leg of a controversial pipeline enabling Iran to export gas to energy-hungry Pakistan. The US, which has long opposed the much-delayed project, is warning that if it ‘actually goes forward’ the pipeline could breach the sanctions regime against Iran’s nuclear programme and trigger US sanctions against Pakistan.
China’s partial funding of the pipeline complicates the geopolitical implications of the deal.
Lengthy power blackouts are a regular occurrence in Pakistan, causing street protests and undermining the economy. By December 2014, Iran and Pakistan hope to start delivering 21.5 million cubic metres of gas per day to Pakistan from Iran’s giant offshore South Pars field in the Persian Gulf. Islamabad plans to use Iranian gas to generate about 20% of its electricity.
By Mark Fitzpatrick, Director, Non-Proliferation and Disarmament Programme
He is a mad mullah after all – mad meaning angry, that is. Following the positive notes sounded by US Vice President Joe Biden and Iranian Foreign Minister Ali Akbar Salehi in Munich last week, it did not take long for Iran’s Supreme Leader, Ayatollah Ali Khamenei, to quash any optimism over the next round of nuclear talks between Iran and the international community. These are scheduled to take place in Almaty on 26 February.
In a speech on 7 February, Khamenei ruled out holding bilateral talks with America on his country’s controversial nuclear programme so long as Washington continued pressure tactics. He claimed the US was proposing talks while ‘pointing a gun at Iran’, adding that: ‘Some naive people like the idea of negotiating with America [but] negotiations will not solve the problems.’
By Chris Raggett, Assistant editor
Although foreign policy played a small role in the US presidential campaign late last year, the way Barack Obama handles Iran before 2016 could determine how the president goes down in history. So argues Mark Fitzpatrick, the director of the IISS’s non-proliferation programme, speaking at a discussion meeting last week about Obama’s upcoming second term.
Over the weekend, Iran signalled it might return in late February to talks with the international community over its disputed nuclear programme. However, the country has also recently notified the UN nuclear watchdog, the IAEA, that it will be installing new, more efficient centrifuges at its uranium-enrichment facility at Natanz. This would dramatically shorten the time it would take Tehran to ‘break-out’ and make a nuclear bomb after expelling IAEA inspectors. Fitzpatrick, who believes there is the chance that some sort of military action ‘may come into play’ in the next four years to prevent Iran from acquiring nuclear weapons, has said the installation of new centrifuges would be a ‘game changer‘.
By Mark Fitzpatrick, Director, Non-Proliferation and Disarmament Programme
Let’s not exaggerate. Iran’s Bushehr nuclear power plant is not another Chernobyl in the making. Unlike the ill-fated Ukrainian facility, Bushehr’s fuel rods are moderated and cooled by water, not flammable graphite. Bushehr also benefits from modern design improvements, including automatic control and containment systems.
Nor is Bushehr likely ever to suffer the fate of the Fukushima Daiichi reactor. The shallow Gulf waters bordering Bushehr cannot produce the kind of massive tsunamis that inundated Fukushima’s electricity and backup cooling system.
It should also be clear by now that Bushehr is not a proliferation threat. The reactor is used for electricity production and the spent fuel will be returned to Russia so the plutonium will not be available for reprocessing for weapons, if Iran were to obtain that technology. In any case, no country has ever used spent fuel from power plants for weapons purposes.
But let’s not sweep aside the environmental and safety dangers either, as Iranian officials are wont to do. Bushehr is located on an earthquake fault. The dust and heat of the local climate contributed to construction delays because of the difficulty of keeping equipment clean and cool. The grafting of a Russian-designed reactor onto the remains of an incomplete German structure and Iran’s contractual requirement for Russia to employ 35-year-old, leftover German pumps and other equipment made for other glitches.
As ‘Genghis Khan with a telephone’ in the 1930s, Joseph Stalin routinely picked up the receiver late at night to issue instructions that led to the imprisonment or execution of millions. Author Toby Dodge probably wouldn’t compare current Iraqi Prime Minister Nuri al-Maliki to the brutal Soviet leader; at the launch of his new book last week he steered away from describing Maliki as despotic as former Iraqi president Saddam Hussein. Nonetheless, Dodge’s portrayal of the Iraqi premier is of a man with ‘clear dictatorial ambitions’ who understands the utility of the telephone.
Dodge’s just-released Iraq: From War to a New Authoritarianism recounts how the PM’s office in Baghdad has subverted the military chain of command, directly ‘ringing up mid-ranking officers and issuing orders to them on their mobile phones’. It is one of the methods by which an initially unremarkable, ‘grey’ politician has managed to centralise power in the weak office of the Iraqi prime minister since his appointment in early 2006.