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US confrontation with Iran

Oil and Gas

Project: US Confrontation with Iran
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In a letter to British Foreign Secretary Arthur Balfour, Sir Maurice Hankey, Britain’s First Secretary of the War Cabinet, writes, “Oil in the next war will occupy the place of coal in the present war, or at least a parallel place to coal. The only big potential supply that we can get under British control is the Persian [now Iran] and Mesopotamian [now Iraq] supply… Control over these oil supplies becomes a first class British war aim.” [Yergin, 1993; Muttitt, 2005]

Entity Tags: Maurice Hankey, Arthur Balfour

Timeline Tags: Events Leading to Iraq Invasion

Category Tags: Geopolitics, Oil and Gas, Western Business Interests

1982: Iran Begins Importing Refined Petroleum

Iran becomes a net importer of refined products, despite its huge oil reserves. Iran begins importing refined oil products to compensate for the inability of its refineries to keep up with internal demand. [US Department of Energy, 3/2005] In 1979, Iran’s refinery capacity was just 750,000 bpd. [Alexander's Gas & Oil Connections, 2/25/2004]

Category Tags: Oil and Gas

Claiborne Pell.Claiborne Pell. [Source: Brown University]The Senate Foreign Relations Committee reports that the US faces a dire choice if Iran is victorious in its war with Iraq. The choice, the committee reports, is “between permitting Iran to dominate the West’s oil supply in the Persian Gulf, and direct US military intervention… .” The report warns that the US, having agreed to protect Kuwaiti shipping in the Persian Gulf from Iranian attacks, “seriously risks being drawn into war” against Iran, and notes that Gulf nations believe the US is siding with Iraq in the war, “and the expanded US naval presence is likely to invite more Iranian attacks of increasing severity.… American naval forces in the Gulf are now, in effect, hostage to Iraqi war policy.” The Senate is debating whether to invoke the 1973 War Powers Resolution, which requires Congress to either declare war in the region or withdraw funding for the US military presence in the Gulf. The Reagan administration opposes the move, and it is doubtful a majority in Congress will vote to invoke the resolution. The report calls the US policy of escorting Kuwaiti tankers “dangerously nebulous.” The Reagan administration agreed to protect the tankers after Kuwait threatened to turn to the Soviets for help if the United States refused. Most Gulf nations believe Kuwait’s threat to ask for Soviet help is nothing more than a “feint” to involve the US in the war; few believe Kuwait is serious about turning to the Soviets for assistance. The report says that although “the flow of oil is not in serious jeopardy,” “shipping in the gulf now appears less safe than before the US naval buildup began.” Iran has recently sown Gulf waters with mines, posing a threat to Kuwaiti and other shipping in the area. Interestingly, though the report is critical of Reagan administration policy in the Gulf, it does not recommend reversing course. The US cannot retreat from its promise to protect Kuwaiti shipping without risking “great cost to US credibility in the region.” Claiborne Pell (D-RI) says, “This report shows that the danger of a possible Iraqi collapse is greater than commonly understood, and that the perils for us in the Gulf are certain to increase.” The report notes that because of the White House’s secret arming of Iran (see 1981), Iraq faces the real possibility of defeat in the war, with potentially catastrophic results for the US. “US policy in the Persian Gulf has been shaped as much by a short-term desire to restore credibility lost in the Iran-Contra affair as by any careful assessment of US interests and objectives.” [Boston Globe, 10/19/1987; New Yorker, 11/2/1992]

Entity Tags: Senate Foreign Relations Committee, Reagan administration, Claiborne Pell

Category Tags: Geopolitics, Diplomacy, Oil and Gas

India and Iran sign a memorandum of understanding for a 2,670 kilometer pipeline that would transport natural gas from Iran’s South Pars fields through 707 kilometers of Pakistani territory to India. The $3-5 billion pipeline would provide India with gas at half the cost of what it now pays. Though Pakistan would stand to earn $600-700 million a year from transit fees and would be permitted to purchase some of the gas for its own use, it is highly unlikely that the proposed pipeline will be constructed any time soon due to the poor relations between India and Pakistan. Furthermore, the pipeline would have to travel through Pakistan’s Balochistan region over which Islamabad has only limited control. [Alexander's Gas & Oil Connections, 7/7/2000; Indo-Asian News Service, 2/24/2004; Asia Times, 10/15/2004]

Category Tags: Iran-India pipeline, Oil and Gas

1994: Iran, India Begin Pipeline Negotiations

Iran and India begin negotiations on the proposed Iran-Pakistan-India gas pipeline (see 1993). But due to persistent tension between Pakistan and India, little progress is made. [Economic Times (Gurgaon, India), 10/24/2004]

Category Tags: Iran-India pipeline, Oil and Gas

US President Bill Clinton issues Executive Order 12957 imposing strict oil and trade sanctions on Iran. US companies and their foreign subsidiaries are hence prohibited from entering into any contract “for the financing of the development of petroleum resources located in Iran.” [US President, 3/15/1995; BBC, 3/17/2000; US Department of Energy, 8/2004]

Category Tags: Oil and Gas, Western Business Interests

Turkey signs a $23 billion deal with Iran, agreeing to buy up to 350 million cubic feet per day (mmcf/d) of Iranian liquefied natural gas (LNG). The deal is met with criticism by the United States, which wants to isolate Iran. Turkey’s demand for natural gas is expected to quintuple by 2010 to 2.9 billion cubic feet per year (Bcf/d). Under the terms of the agreement, Iran will supply Turkey with three billion cubic meters of gas a year, increasing to 10 billion cubic meters (353 billion cubic feet) by 2007. [US Department of Energy, 8/1996; BBC, 7/30/2001]

Category Tags: Oil and Gas

Mark Burles authors a report for the RAND Corporation on the subject of recent Chinese policy toward Russia and Central Asia. The report notes that while “China’s relationships with the countries of Central Asia do not carry the same potential threat to US interests as its relationship with Russia does,” China’s support “for the extension of pipeline routes from Central Asia through Iran [does have] the potential to generate conflict between Beijing and Washington.” Burles says China’s “pledge to help construct a pipeline from Kazakhstan to the Kazakh-Turkmen border, with the goal of eventually extending through to an Iranian port… would run counter to the current US policy of denying Iran access to Central Asian oil.” [Burles, 1999]

Entity Tags: Mark Burles

Category Tags: Geopolitics, Oil and Gas, Think Tank Activities

July 26, 2001: Tabriz-Ankara Pipeline Opened

Despite a history of technical problems, the National Iranian Oil Company (NIOC) and the Turkish oil and gas company, Botas, open a 2,577 km pipeline gas pipeline from the northeastern city of Tabriz to Ankara. Iran becomes Turkey’s largest supplier of natural gas. Under the terms of the 1996 agreement (see August 12, 1996), Iran will supply Turkey with three billion cubic meters of gas a year, increasing to 10 billion cubic meters (353 billion cubic feet) by 2007. [BBC, 7/30/2001; US Department of Energy, 12/2001; Alexander's Gas & Oil Connections, 11/13/2002; AME Info, 2/9/2005]

Category Tags: Geopolitics, Oil and Gas

Iran’s Deputy Foreign Minister for Economic Affairs Mohammad Hossein Adeli says during a press conference that Iran has begun feasibility studies on exporting Iranian gas to India (see 1993) and is considering the possibility of transporting gas to Europe via a pipeline. He says that the Iranian government is also looking into the possibility of exporting gas to members of the Persian Gulf Cooperation Council (PGCC) and is also considering selling gas to Armenia, the south Caucasus, and the Republic of Azerbaijan. [Tehran Times, 7/9/2002]

Entity Tags: Mohammad Hossein Adeli

Category Tags: Geopolitics, Oil and Gas, Iran-India pipeline

Russia is negotiating a long-term oil swap contract with the National Iranian Oil Company (NIOC). As part of the swap deal, Russia would send crude oil to Iran’s northern refineries for domestic consumption via a Chinese-built pipeline in exchange for an equal amount of Iranian oil being sent to Russia’s buyers at Iran’s Gulf oil terminals. The arrangement would make Russian oil available to non-European buyers at a competitive price by decreasing the cost of delivery. [Asia Times, 2/11/2003] United Press International will note in 2005 that the swap agreements are “a direct challenge to the Baku-Tbilisi-Ceyhan (BTC) Pipeline Project.” [United Press International, 6/29/2005]

Entity Tags: National Iranian Oil Company

Category Tags: Financial, Oil and Gas, Western Business Interests

March 4, 2003: BTC Pipeline Discussed

The Brookings Institution hosts the Baku-Tbilisi-Ceyhan (BTC) Pipeline Project Roundtable. The proposed pipeline would transport Caspian Sea oil 1000 miles from Azerbaijan, through Georgia, and to the Turkish Mediterranean port of Ceyhan. Delegates from each of the three countries and executives and consultants from British Petroleum attend the discussion. The US is a strong supporter of the pipeline project because it believes the pipeline will deny Iran leverage in the transportation of oil and gas from Central Asia and the Caspian Basin. [Alexander's Gas & Oil Connections, 11/27/2002; Institution, 3/4/2003]

Entity Tags: British Petroleum, Brookings Institution

Category Tags: Oil and Gas, Western Business Interests

CNN reports that despite US government prohibitions (see March 15, 1995 and May 6, 1995) banning US citizens and business from doing business with Iran, dozens of US companies are actively conducting business there, including Halliburton, ConocoPhillips and General Electric. The companies are using a complicated array of corporate loop-holes and off-shore accounts to maneuver around US laws. Michael Ledeen, interviewed by CNN, says these companies are aiding terrorism. “The oil companies are a wholly owned subsidiary of the government… the government is the primary sponsor of terrorism,” he says, additionally claiming that “they have separate organizations that are used to funnel oil profits and other profits into the terror network.” [CNN, 2/10/2003; CNN, 5/29/2003]

Entity Tags: ConocoPhillips, Halliburton, Inc., Michael Ledeen, General Electric

Category Tags: Geopolitics, Oil and Gas, Western Business Interests

Iran’s foreign minister, Kamal Kharrazi, says in a statement that Iran would allow Iraq to export oil through Iranian terminals or to enter into an oil swap arrangement of up to 350,000 barrels a day. A swap deal would help Iraq finance its reconstruction by allowing the country to export its oil to Iran’s refineries while Iran sells a comparable amount of Iranian crude oil on Iraq’s behalf. Iran also offers to supply its neighbor with electricity and gas, and says it could also help Iraq secure up to $300 million in buyers’ and suppliers’ credits. [Reuters, 10/24/2003]

Entity Tags: Kamal Kharrazi

Category Tags: Oil and Gas

General Electric does about $270 million in business in Iran through one of its foreign subsidiaries. The company has sold Iran hydroelectric equipment, medical equipment, and oil and gas equipment. Under current US law, companies are barred from doing business with nations that the US State Department has said are sponsors of terrorism. However the law does not prohibit a company’s foreign subsidiaries from engaging in such business. [Associated Press, 2/2/2005]

Entity Tags: General Electric, US Department of State

Category Tags: Oil and Gas, Western Business Interests

2004: Iran Forced to Import Gasoline

Iran, despite being OPEC’s second largest oil exporter, is forced to import a billion dollars worth of gasoline due to demand outstripping the country’s limited refining capacity. “We use 50 million liters of fuel each day, 10 percent more than just a year ago,” Seyyed Reza Kasaizadeh, planning director for the national refining and distribution company NIORDC, tells the Persian daily Khorasan. Roughly a quarter of that amount is purchased by the government on the open market, and then sold to the public at the same subsidized price as domestically refined fuel—roughly 35 cents per gallon. [Iran Daily, 12/12/2004] In addition to the subsidy program’s actual costs, the program also represents “a huge opportunity cost, because they could be selling that at world prices,” Ben Faulks, an analyst for the London-based Economist Intelligence Unit, tells the Washington Post in mid-2005. Iran hopes that its nuclear energy program will solve this problem by reducing the country’s industrial oil consumption needs. The country would then be able to sell more of its oil at market prices and substantially increase its revenue. [Washington Post, 7/4/2005]

Entity Tags: Ben Faulks, National Iranian Oil Refining & Distribution Company, Seyyed Reza Kasaizadeh

Category Tags: Nuclear Program, Oil and Gas

Asadollah Mikaeeli, the director of planning at National Iranian Oil Derivatives Refining and Distribution Company, announces that since 1982, Iran has doubled its oil refining capacity from 750,000 to 1.6 million barrels per day (mmpd). Notwithstanding, the country continues to import many petroleum products like gasoline and diesel, he says. [Alexander's Gas & Oil Connections, 2/25/2004]

Entity Tags: National Iranian Oil Refining & Distribution Company, Asadollah Mikaeeli

Category Tags: Oil and Gas

The Guardian of London reports that Iran is preparing “to launch an oil trading market for Middle East and OPEC producers.” The Tehran oil bourse (French for “purse”, used to describe a financial transaction exchange system), to be opened in 2005, could give top oil producing nations in the region greater control of the oil trade, threatening the supremacy of world’s current major oil market exchanges, the London IPE and New York’s NYMEX. [Reuters, 5/15/2004; Guardian, 6/16/2004] Some observers believe oil at the new exchange would likely be traded in Euros. “From a purely economic and monetary perspective, a petroeuro system is a logical development given that the European Union imports more oil from OPEC producers than does the US, and the EU accounts for 45 percent of imports into the Middle East,” notes the Center for Research on Globalization. [Center for Research on Globalization, 10/27/2004]

Entity Tags: Center for Research on Globalization

Category Tags: Financial, Oil and Gas

Indian Prime Minister Manmohan Singh and Pakistan President Gen. Pervez Musharraf meet at the Roosevelt Inn in Manhattan for an India-Pakistan summit to discuss how relations between the two countries can be improved. During the discussions, they consider the possibility of the long proposed Iran-Pakistan-India gas pipeline project (see 1993). “Such a project could contribute to the welfare and prosperity of the people of both countries and should be considered in the larger context of expanding trade and economic relations between India and Pakistan,” they say in a joint statement. [Indo-Asian News Service, 9/24/2004; Associated Press, 9/24/2004]

Entity Tags: Pervez Musharraf, Manmohan Singh

Category Tags: Iran-India pipeline, Oil and Gas

Vice President Dick Cheney says during a “town hall meeting” at Minnesota State University: “They’re already sitting on an awful lot of oil and gas. Nobody can figure why they need nuclear as well to generate energy.” [White House, 10/5/2004] The Washington Post later notes that “Cheney, Defense Secretary Donald H. Rumsfeld and outgoing Deputy Secretary Paul Wolfowitz held key national security posts when the Ford administration made the opposite argument 30 years ago” (see 1976). [Washington Post, 3/27/2005]

Entity Tags: Donald Rumsfeld, Richard (“Dick”) Cheney, Paul Wolfowitz, Ford administration

Category Tags: Nuclear Program, Oil and Gas

China and Iran negotiate a $70-$100 billion deal that gives China’s state oil company a 51 percent stake in Iran’s Yadavaran oil field, located near the Iraq border. The Yadavaran oil field, once thought to be two separate oil fields (Koushk and Hosseinieh), contains more than 3 billion barrels of recoverable oil and a total reserve of 17 billion barrels. [China Daily, 11/8/2004; Washington Post, 11/17/2004] China agrees to purchase ten million tons of liquefied natural gas (LNG) annually for a 25-year period once Iran has constructed plants to liquefy the natural gas, a feat that could take more than five years. The amount could increase to as much as $200 billion if an oil deal, currently under negotiation, is also agreed upon by the two nations. [Persian Journal, 10/31/2004] As part of the deal, Sinopec, China’s state oil company, will have the right to exploit Iran’s Yadavaran oil field, located near the Iraq border, on a buy-back basis in cooperation with another major international oil company. The Yadavaran oil field contains more than 3 billion barrels of exploitable reserves and comprises the Koushk and Hosseinieh oil fields, “which were recently found to be connected at various layers, forming an oil field with a cumulative in-place reserve of 17 billion barrels,” the Chinese Daily reports. [China Daily, 11/8/2004] Iran is estimated to have a 26.6-trillion-cubic-meter gas reservoir, the second-largest in the world. About half of its reserves are located offshore. Some observers suggest that the Iran-China agreement could establish a precedent that opens the way for other nations to do business with Iran. The US Iran-Libya Sanctions Act of 1996 (ILSA), which penalizes foreign companies for investing more than $20 million in Iran’s oil and gas industry, has so far discouraged many companies from doing a large amount of business with the Islamic state. [Asia Times, 11/6/2005] Additionally, the Iran-China deal dramatically reduces the Bush administration’s leverage over Iran, as its threat to bring Iran to the UN Security Council over its nuclear program is greatly weakened by the fact that China, as a permanent member, holds a veto at the council. [Washington Post, 11/17/2004]

Entity Tags: Sinopec

Category Tags: Geopolitics, Oil and Gas

Pakistani prime minister Shaukat Aziz meets with Indian Petroleum Minister Mani Shankar Aiyar in Delhi. Summarizing the meeting, Aiyar tells the press: “We did repeat what we have said earlier about using Pakistan as [a] transit corridor [for sourcing gas from Iran] creating mutual dependency [and]… we need to replicate such mutual dependency… in the wider trade and economic relationship between the two countries.” It has been reported that Washington is pressuring Pakistan not to enter into any sort of pipeline agreement with Iran. “The project, if it materializes, would also foreclose whatever prospects remain of the revival of the trans-Afghan pipeline project, which many still see as a raison d’etre of the US intervention in Afghanistan,” the Asian Times notes. [Asia Times, 1/11/2005]

Entity Tags: Shaukat Aziz, Mani Shankar Aiyar

Category Tags: Iran-India pipeline, Oil and Gas

In Delhi, the India government hosts the first-ever round-table of Asian oil ministers from the Persian Gulf, China and Southeast Asia. Iranian Oil Minister Bijan Namdar Zanghaneh recommends creating an Asian Bank for Energy Development to finance energy projects in Asia, such as the long-proposed Iran-Pakistan-India gas pipeline project (see 1993). He also calls for lower prices for Asian energy supplies that are sold to Asian consumers. [Asia Times, 1/11/2005; World Peace Herald, 1/17/2005]

Entity Tags: Bijan Namdar Zanghaneh

Category Tags: Iran-India pipeline, Geopolitics, Oil and Gas

Indian Petroleum Minister Mani Shankar Aiyar announces that he has invited Iranian officials to visit Delhi to discuss the long proposed Iran-Pakistan-India gas-pipeline project (see 1993). “A delegation from Iran will visit India on the eve of the Asian gas buyers’ summit commencing on February 14 to initiate negotiations on a term-sheet for the delivery of Iranian natural gas by pipeline at the India-Pakistan border,” he says. “Our anticipated demand in 2025 for gas would be 400 million standard cubic meters (mscm) per day. Our output today is less than 100 mscm per day. It is not possible to meet the incremental demand from domestic production…. [I]mport of LNG, and natural gas through [a] pipeline is needed to meet the demands of the growing economy.” [Asia Times, 1/11/2005]

Entity Tags: Mani Shankar Aiyar

Category Tags: Iran-India pipeline, Oil and Gas

India announces that it has agreed to a $40 billion deal with Iran. Under the terms of the agreement, the National Iranian Oil Company (NIOC) will sell 5 million tons of liquefied natural gas (LNG) annually to India over a 25-year period with the possibility of increasing the quantity to 7.5 million tons. India’s price will be computed at 0.065 of Brent crude average plus $1.2 with an upper ceiling of $31 per barrel. As part of the deal, India’s ONGC Videsh Ltd (OVL) will participate in the development of Yadavaran, Iran’s largest oil field. India’s share in the oil field will be 20 percent, which translates into roughly 60,000 barrels per day of oil. Iran has retained a 30 percent stake while the Chinese state oil company Sinopec secured a 50 percent share in an agreement signed at the end of October (see October 29, 2004). India’s deal with Iran will also provide India with 100 percent of the rights in the 300,000-barrel-per-day Jufeir oilfield. [Asia Times, 1/11/2005; World Peace Herald, 1/17/2005] The agreement could give new impetus to the long proposed Iran-Pakistan-India gas pipeline project (see 1993). The Tehran Times, which is known to represent the views of the Iranian government, comments, “The Iran-India agreement on LNG exports will pave the way for the implementation of the project to pipe Iranian gas to India via Pakistan and the dream of the peace pipeline could become a reality in the near future.” [Asia Times, 1/11/2005]

Entity Tags: National Iranian Oil Company, Sinopec, ONGC Videsh

Category Tags: Iran-India pipeline, Key Events, Geopolitics, Oil and Gas

In Iran, a blast occurring at a dam construction site near the town of Dailam triggers false reports of a missile strike on Iran’s Russian-built Bushehr nuclear plant. News of the blast sends stocks on Wall Street downward and pushes up oil prices. Iranian official Ali Agha Mohammadi of the Supreme National Security Council claims that the false reports were engineered by Washington as part of “psychological warfare” against Tehran. [Associated Press, 2/16/2005; Fox News, 2/17/2005]

Entity Tags: Ali Agha Mohammadi, Iranian Supreme National Security Council

Category Tags: Nuclear Program, Oil and Gas

US ambassador to New Delhi David Mulford informs India’s Oil Minister Mani Shankar Aiyar in a meeting that the Bush administration has reservations about Indian attempts to strike a deal with Iran on the long proposed $3-4 billion Iran-Pakistan-India gas-pipeline project (see 1993). According to the Indian Express, the meeting marks the first time the US has formally conveyed its concerns about the pipeline proposal. [Agence France-Presse, 3/10/2005; Dawn (Karachi), 3/11/2005; Voice of America, 3/17/2005]

Entity Tags: Bush administration (43), David Mulford, Mani Shankar Aiyar

Category Tags: Iran-India pipeline, Geopolitics, Oil and Gas

Iranian Oil Minister Bijan Namdar Zanganeh signs a memorandum of understanding with his Indonesian counterpart Purnomo Yusgiantoro that Iran will build a $3 billion refinery in Indonesia. As part of the deal, Indonesia will receive 300,000 barrels per day of heavy crude and Tehran will get a 30 percent stake in PT Pertamina, Indonesia’s state oil company. National Iranian Oil Company and Pertamina will lead the four-year project, which Iran hopes will provide security for Iran’s market supply. [Islamic Republic News Agency, 3/16/2005; Bloomberg, 3/18/2005]

Entity Tags: Purnomo Yusgiantoro, Bijan Namdar Zanganeh, National Iranian Oil Company, PT Pertamina

Category Tags: Geopolitics, Oil and Gas

May 25, 2005: BTC Pipeline Opens

The $4 billion US-backed Baku-Tbilisi-Ceyhan (BTC) pipeline officially opens. The pipeline begins in Baku, Azerbaijan and travels 1,762 km (1,000 miles) through Georgia to the Mediterranean port city of Ceyhan in Turkey. The pipeline has been under construction for ten years and was built by a consortium of oil companies including Amerada Hess, ConocoPhillips, Eni, Inpex, Itochu, Statoil, Total, SOCAR, TPAO, Unocal, and BP. The pipeline is expected to bring one million barrels of oil per day to the West. [Institution, 3/4/2003; BBC, 5/5/2005; BBC, 5/25/2005]

Entity Tags: Unocal, British Petroleum, TPAO, SOCAR, Total, Eni, ConocoPhillips, Amerada Hess, Inpex, Itochu, Statoil

Timeline Tags: Peak Oil

Category Tags: Geopolitics, Oil and Gas

A delegation from India visits Pakistan to discuss cooperation in the oil and gas sectors. The 11-person delegation is headed by Indian Minister for Petroleum and Natural Gas Mani Shankar Aiyar. The two countries agree to establish a working group to review the legal, technical, commercial, and financial parameters of the proposed Iran-India-Pakistan gas pipeline (see 1993 and January 27, 2003) that would transport natural gas 2,775 km from Iran to India via Pakistan. They plan to start the project by December 31, 2005. [Islamic Republic News Agency, 6/5/2005; Tribune (Chandigarh), 6/5/2005] At a press conference on June 6, Aiyar is asked about US concerns expressed by Secretary of State Condoleezza Rice in March (see March 19, 2005) that the pipeline would strengthen Iran. Aiyar responds that construction of the pipeline is contigent only upon an agreement being made between India and Pakistan. [Tribune (Chandigarh), 6/5/2005] India and Pakistan also discuss the Turkmenistan-Afghanistan-Pakistan (TAP) pipeline (see January 18, 2005), which they agree should extend to India. [Tribune (Chandigarh), 6/5/2005; Associated Press, 6/5/2005] The delegation also explores the possibility of exporting Indian diesel to Pakistan. [Islamic Republic News Agency, 6/5/2005]

Entity Tags: Mani Shankar Aiyar, Condoleezza Rice

Category Tags: Iran-India pipeline, Oil and Gas

Iran downplays the significance of the opening of the US-backed $4 billion dollar Baku-Tbilisi-Ceyhan (BTC) pipeline (see May 25, 2005) that will carry oil from the Caspian Sea to the Mediterranean port city of Ceyhan, Turkey. The project was supported by the US government, which believes the pipeline will weaken Iran’s leverage over the distribution of oil. Mahmood Khagani, director for Caspian Sea Oil and Gas Affairs in Iran’s petroleum ministry, says the project makes little economic sense. “Iran’s route is the shortest, cheapest, and potentially the most lucrative,” he says. [Agence France-Presse, 6/9/2005]

Entity Tags: Mahmood Khagani

Category Tags: Iran-India pipeline, Geopolitics, Oil and Gas

India’s Petroleum Minister Mani Shankar Aiyar says that Iran has agreed to research the possibility of extending the proposed 2,670 km Iran-Pakistan-India pipeline (see 1993) to China. [PakTribune (Islamabad), 6/13/2005]

Category Tags: Iran-India pipeline, Oil and Gas

The National Iranian Gas Company announces the awarding of a $2.2 billion contract to construct a gas refinery in the southwestern Iranian province of Khuzestan to a consortium headed by the British construction firm Costain Oil, Gas & Process (COGAP). [Costain, 6/24/2005 pdf file; Forbes, 6/24/2005]

Category Tags: Oil and Gas

An article in the Washington Times suggests that Iran is “in effect doing an end run around US sanctions threats” by expanding oil, gas, and petrochemical deals with countries such as India, Russia, and Iraq. [United Press International, 6/29/2005] The Times list the following examples:
Proposed Iraq Oil Swap - “A proposed pipeline from Bandar Imam in Iran to Iraq’s Basra port would carry Iraqi crude oil to Iran’s Abadan refinery and refined oil products back to Iraq.” (see also October 24, 2003). [United Press International, 6/29/2005]
Iran-Pakistan-India gas-pipeline project - “[A] 1,700-mile pipeline—sometimes referred to as the ‘peace pipeline’—that would transport Iranian natural gas through Pakistan to India” (see also January 27, 2003). [United Press International, 6/29/2005]
Russia - Iran… is pursuing plans to let Russia export its Caspian Sea oil through a Persian Gulf [oil] swap scheme, under which Russia’s oil would be piped into Iran.” The Times notes: “The scheme is a direct challenge to the recently completed Baku-Tbilisi-Ceyhan (BTC) oil pipeline, which, built with US backing, was designed to get Caspian Sea oil to market through Turkey while bypassing both Russia and Iran.” [United Press International, 6/29/2005]

Category Tags: Oil and Gas

Deputy Secretary of State Robert Zoellick tells reporters that if China continues to pursue energy contracts with Iran it will find itself increasingly in conflict with the United States. He adds that it isn’t clear whether the force behind China’s dealmaking comes from new Chinese oil companies or some government “strategic plan.” He also asserts that China will not be able to guarantee its energy security through contracts with countries such as Iran “because you can’t lock up energy resources” in the global marketplace. [Reuters, 9/6/2005]

Entity Tags: Robert B. Zoellick

Category Tags: Geopolitics, Oil and Gas

During a news conference in Washington, US Secretary of State Condoleezza Rice urges China, Russia, and India to support US threats of imposing sanctions against Iran for its nuclear programs. Iran needs to get a “unified message,” she says. “I think that after the IAEA (International Atomic Energy Agency) report a couple of days ago, it is clear that Iran is not living up to its obligations, and so UN Security Council referral seems to be a reasonable option.” [US Department of State, 9/9/2005; BBC, 9/10/2005]

Entity Tags: Condoleezza Rice, International Atomic Energy Agency

Category Tags: Geopolitics, Oil and Gas

The International Atomic Energy Agency’s Board of Governors passes a resolution declaring Iran in non-compliance with its safeguard obligations under the Nuclear Non-Proliferation Treaty (NPT). The resolution calls on Iran to suspend all enrichment-related activity, cease construction on a heavy water research reactor, and provide agency inspectors access to research and development locations and documentation. The resolution also calls on Iran to “[p]romptly… ratify and implement in full the Additional Protocol,” which would require Iran to allow short-notice inspections of Iran’s nuclear facilities. [International Atomic Energy Agency. Board of Governors, 9/24/2005 pdf file] Iran has signed but not ratified it. [Washington Post, 9/27/2005] If Iran fails to comply with this resolution, the board could decide at its next meeting in November to refer the matter to the UN Security Council. A referral to the Security Council would set the stage for the possible imposition of sanctions on Iran. Iran has repeatedly stated that it will not relinquish its right under the NPT to enrich uranium for peaceful purposes. The resolution, sponsored by Britain, France, and Germany, passes with 22 votes. Twelve countries abstain, including Russia, China, Pakistan, South Africa and Brazil, and only one—Venezuela—opposes the resolution. India, under strong pressure from the US (see September 10, 2005), backs the resolution, despite its close ties to Iran. The resolution marks the third time in two decades that an IAEA resolution has not been approved unanimously. [BBC, 9/25/2005; Associated Press, 9/25/2005; Washington Post, 9/25/2005; Economic Times (Gurgaon, India), 9/26/2005] Foreign Minister Manouchehr Mottaki calls the resolution “politically motivated, illegal, and illogical,” asserting that the “three European countries implemented a planned scenario already determined by the United States.” [Economic Times (Gurgaon, India), 9/26/2005]

Category Tags: Key Events, Oil and Gas

Iran’s Supreme National Security Council spokesman, Ali Aghamohammadi, says that Iran has no intention of withdrawing from a multi-billion dollar deal to sell natural gas to India. There have been rumors that Iran, upset over India’s support of an International Atomic Energy Agency (IAEA) resolution declaring Iran in breach of its Safeguard Agreements (see September 24, 2005), had informed India the deal was in jeopardy. “We have had good, deep relations with India in many fields and regional affairs and their behavior at the IAEA was strange and we didn’t expect them to vote against Iran,” he says. Nonetheless, “We don’t want to review our current relations with India and their vote against Iran doesn’t affect the gas project.” [BBC, 9/28/2005]

Entity Tags: International Atomic Energy Agency, Ali Aghamohammadi

Category Tags: Iran-India pipeline, Oil and Gas

Newt Gingrich.Newt Gingrich. [Source: Public domain]Former Republican House Speaker Newt Gingrich says that the US should sabotage Iran’s gasoline refinery as part of its efforts to bring down the Iranian government. Gingrich also is harshly critical of the Bush administration for its failure to deal more strongly with Iraq, saying, “I can’t imagine why they put up with this. I mean, either General Petraeus is wrong and the military spokesman’s wrong, or the current policies we have are stunningly ineffective.” He then gives his own prescription for regime change in Iran: “We should finance the students. We should finance a Radio Free Iran. We should covertly sabotage the only gasoline refinery in the country. We should be prepared, once the gasoline refinery is down, to stop all of the gasoline tankers and communicate to the Iranian government that if they want to move equipment into Iran—into Iraq, they’re going to have to walk.” Gingrich adds, “I think we are currently so timid and our bureaucracies are so risk-avoiding—it took enormous leadership by President Reagan and by Bill Casey to reenergize the CIA in the early ‘80s. And we’ve now been through a long period of beating up the intelligence community and having lawyers say, You can’t do this, you can’t do that.” [Fox News, 9/25/2007]

Entity Tags: Newt Gingrich, Fox News

Timeline Tags: Neoconservative Influence

Category Tags: Opposition Groups, Oil and Gas, Neoconservative Hawks

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