By Ilan Berman, The Hill—
When it comes to Iranian behavior, the past may very well be prologue.
Currently, all eyes are on the nuclear talks in Vienna, where negotiations over Iran’s reentry into the 2015 deal known as the JCPOA may end up falling apart over unexpected last-minute demands from Russia, which is serving as a key interlocutor.
What isn’t well understood, however, is that Iran’s economic fortunes — and its strategic ambitions — are already expanding, even ahead of any new deal with the West, thanks to the soaring world price of oil.
The numbers tell the story. When it recently formulated its national budget, Iran’s government based its calculations for its upcoming year (stretching from March 2022 to March 2023) on exporting 1.2 million barrels of oil a day at $60 a barrel. But Russia’s new war in Ukraine has sent the world price of oil skyrocketing. As a result, Iran is suddenly receiving far more than its anticipated annual revenue, and those funds can be used not only to prop up its regime but also to fund its foreign adventurism.
And if a new nuclear deal does materialize after all, Iran’s windfall will become bigger still. One of Iran’s core demands in the recent negotiations in Vienna has been a rollback of western sanctions on its oil and natural gas exports — a stipulation that the Biden administration has given every indication of green-lighting. If the U.S. does indeed remove meaningful restrictions on Iran’s oil and petrochemical exports, the results would be a tremendous boon to Tehran. That’s because Iran has massive quantities of oil, estimated to total around 120 million barrels, stockpiled domestically or in foreign locales, that can be quickly brought to market. It is also believed that the Islamic Republic could ramp up its oil output in short order, and Iranian officials have already announced plans to produce as many as 4 million barrels per day within weeks of sanctions being removed. Continue Reading…