Sanctions and Iranian energy exports : as crude oil sales decline new opportunities arise

Abstract

The Iranian draft budget for the 2013/2014 period assumed a 40% decline in oil revenues taking into account the economic consequences of international sanctions since 2012 that have targeted Iran’s oil and natural gas sector. Yet, Iran is making plans to boost its energy exports to circumvent Western sanctions and ease its losses. Sanctions were not an unexpected outcome of the previous negotiations on Iran’s nuclear program and as such Iran has been building non-Western and regional ties to increase its options. These include the strategic investment in electricity imports in neighboring countries as well as the construction of new grids to these areas, the expansion of natural gas exports and the change of crude oil imports. This paper seeks to argue that although the sanctions have reduced the immediate revenues of the government, particularly through decreased investments and relations to the West. New opportunities have been sought and groomed since 2009 to balance out these losses and diversify its energy export dependency.