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News: Iran Economy

Iran’s Damaged Oil Infrastructure

Iran’s Damaged Oil Infrastructure

By Staff Writer

Oil extraction in Iran is an infrastructure that was established well before the Anti-Monarchic Revolution of 1979. After four decades, the oil industry continues to be a mainstay of the country's economy. However, the investment that Iranian regime has made in the infrastructure is insufficient for this field.

After negotiations with OPEC, Iran increased its oil production to four million barrels a day, once implementation of the Joint Comprehensive Plan of Action (JCPOA) was in place. Media in Iran called to the OPEC agreement ‘a diplomatic achievement’ that weakened the kingdom of Saudi Arabia on the global oil market.

But, Iran’s oil industry did not have the capacity to produce four million barrels of oil per day. When the Iranian minister of petroleum, Bijan Namdar Zangeneh, called on Iran's largest field by production volume, South Pars, to increase production, experts said the pressure on oil reservoirs and wells would grow and that a significant number of the country’s wells would be lost forever.

It has been reported that Hashd al-Shaabi, the Iraqi Shia militia under Iranian control, brought more than 40,000 barrels of Iraqi oil into Iran each day to compensate for their lack of production.

The international standard of maintenance of refineries is every three years, but in 2017, Zangeneh announced that the maintenance of the refineries would change from every four years to every five years. This not only caused a production down tick, but proved costly in human resources.

Fars News reports that since Iran regime’s President Hassan Rohani took office, ten separate incidents have occurred at Iranian refineries. Perhaps the most notable was an explosion in the Shazand refinery in Arak, which resulted in seven deaths and four injuries.

Many other Iranian industries, including steel, sugar cane, mines, manufacturing companies, are in a similar situation. Speaker in Parliament, Jalal Mahmoudzadeh, warned even before US withdrawal from the nuclear deal that more than 60% of the country's industry could shut down, sharply increasing unemployment. "There are now six million unemployed young people in the country, and the regime’s statistics on unemployment are not correct, as they consider employed everyone who is working even for one hour per week," Mahmoudzadeh previously told the Fars News Agency.

If the Islamic Republic is given time to rebuild its economy, it will likely continue to pursue its own ideological policies, instead of acting in the interests of the people of Iran. When Iran’s assets were unfrozen under the nuclear deal, they were utilised by the Iranian regime to support Syrian dictator Bashar Assad and his militias in the region.

The Iranian people, whose number of peaceful protests and continuous strikes is unprecedented in the Middle East, want regime change. They are fed up with widespread human rights violations and repeatedly organize strikes in factories, schools, and on the streets.

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