Former oil minister Kazem Vaziri Hamaneh, who was sacked by Ahmadinejad last week, warned of a looming “catastrophe” in Iran’s energy sector (ISNA). Although Iran is OPEC’s second largest oil producer, its gasoline consumption forces it to import million gallons of gasoline every day despite the recent gasoline rationing. Vaziri Hamaneh said consumption cannot be controlled with current low prices.
The acting oil minister, Gholam Hossein Nozari, is arguing that the solution to the oil crisis in Iran is an increase in crude oil production. The foreign investment needed to boost the production has, however, all but evaporated.
Ahmadinejad has claimed that during his two years in office, Iran has been able to secure $38 billion in foreign investment for the oil sector. The claim has been denied by Iran oil experts. Almost all of the commitment has been memoranda of understanding, with no sign that any investment is actually taking place. A number of European companies have been hesitant to go ahead with any involvement in Iran’s energy projects. The latest companies suspending involvement in Iranian projects are Royal Dutch Shell, Respol of Spain and OMV of Austria.