Mohammad Bagher Ghalibaf, the Speaker of the Iranian regime’s Majlis (Parliament) indirectly referred to past threats by Iranian officials to cut oil exports to the West. Highlighting the current energy imbalance crisis in the country, he stated that Iran now lacks the oil and market leverage to threaten the world.
On November 26, Ghalibaf said during a public parliamentary session: “There was a time when, in response to enemy threats, we used to say we’d shut off the oil supply to you—it was our leverage of threat. But today, with this situation, what oil can we shut off, and what market do we have?”
He further noted that, according to Iran’s oil minister, even if production exists, the country faces a “transportation problem” for transferring oil.
Ghalibaf added: “Our issues are more complex than simply discussing now whether mazut (a type of heavy fuel oil) should be burned in power plants or not.”
Officials from Mahmoud Ahmadinejad’s administration in 2012 had threatened the West that if Iran was sanctioned, it would “halt” oil exports to drive oil prices up to “$300” per barrel and create a “crisis” in the global economy.
In this context, Rostam Ghasemi, Iran’s oil minister at the time, stated in November 2012: “If you continue to increase sanctions, we will also cut off our oil exports to the world.”
He claimed: “We have prepared a contingency plan to run the country without any oil revenue.”
His threat has not been carried out in over a decade. Instead, Iran has resorted to relying on China to sell its oil, offering significant discounts in the process.
Additionally, Iran’s plan to run the country without oil revenues comes as, since November 2012, the government’s debt to the Central Bank—due to borrowing to cover budget deficits—has increased 38-fold to approximately 50 trillion rials (about $7.142 billion). Government debt to other banks is more than double this amount.
During this period, the government has also borrowed $100 billion from the National Development Fund. Overall, according to the International Monetary Fund (IMF), public debt has risen to one-third of Iran’s entire economy.
The Iranian regime’s past threats to disrupt the global economy by cutting off oil exports contrast sharply with its current situation. In the early 2010s, Iran exported 2.5 million barrels of oil per day, 18 billion cubic meters of gas, and 12 terawatt-hours of electricity annually. Now, it smuggles 1.6 million barrels of oil, faced a 64 billion cubic meter gas deficit last year, and has zero net electricity trade. This past summer, it also struggled with a massive electricity shortage.
Ghalibaf stated that this summer’s electricity deficit was 15,000 megawatts, and last winter’s gas shortage reached 250 million cubic meters, equivalent to 20% of the country’s total electricity and gas demand.
He added: “When consumption grows by 5.5% and production grows by only a fraction of a percent, the result is nothing but imbalance.”
The Iranian regime’s insistence on uranium enrichment to provide fuel for nuclear power plants comes while the Bushehr power plant—the country’s sole nuclear power plant—accounts for only 1% of the country’s electricity production. Over the past decade, it has produced a total of 70 terawatt-hours of electricity, worth less than $5 billion in regional markets.
Ignoring the hundreds of billions of dollars in direct costs from sanctions, the mentioned figure is even less than the construction cost of the Bushehr plant. In other words, over the past decade, the value of electricity produced by the Bushehr plant has not even equaled its construction cost.
The West accuses the Iranian regime of attempting to build a nuclear bomb—a claim the regime denies. However, it has refused to answer the International Atomic Energy Agency’s questions regarding clandestine activities and the origins of uranium particles found at undeclared sites.
