Regional War

Jack Kelly has a column up over at Real Clear Politics that gives a history lesson. It also points to the increasing prospect of a regional war in the Middle East. Iran is experiencing a loss in oil production, but that may actually be the trigger for the regional conflict, not an excuse for them to negotiate in good faith.

So why the history lesson? On Christmas day, the National Academy of Sciences issued a report which indicates Iranian oil production is about to plunge.

Iran currently earns about $50 billion a year in oil exports. Oil profits account for about 65 percent of Iranian government revenues.

But Iranian oil exports could decline by half within five years, and virtually disappear within ten, said Roger Stern, an economic geographer at Johns Hopkins University in Baltimore.

The effect on Iran would be catastrophic. Thanks to mismanagement by the mullahs, and corruption on a scale so vast as to make even an Iraqi blush, Iran's economy is already a basket case. According to the CIA World Factbook, more than 40 percent of Iran's people live in poverty; the unemployment rate is 11 percent (more than double that for people under 30), and the rate of inflation tops 13 percent. Oil exports are just about Iran's only source of foreign exchange.

Impending fiscal catastrophe could make the Iranians more tractable, Prof. Stern thinks. If the U.S. can "hold its breath" for a few years, it might find Iran to be a much more conciliatory country, he told Barry Schweid, the AP's diplomatic writer, in an interview.

But one of the big reasons why oil production in Iran is declining does not suggest a happy outcome. Iran is spending so much on its nuclear program that next to nothing is being invested in modernizing oil production. Though the West has made it clear it will assist in developing nuclear energy if Iran will forswear its nuclear weapons programs, Iran would rather have the nukes than the carrots the West is offering.

Read the whole thing. There is a lot of background about the current state of affairs in the region. There is also a lot to worry about. Iran may experience a catastrophic financial meltdown that crushes the mullahcracy. Or Iran may resort to a more traditional solution to internal economic woes. Taking what it needs. Other countries in the region need to start acting to stop this from happening or risk being swallowed by a new Persian Empire.