Are Declining Oil Prices Iran’s Achilles Heel?
Things have been going well for Iran recently. Its proxy forces have made gains throughout the Middle East region, from Yemen to Iraq. The Islamic Republic has managed to stave off any negotiated agreement with the P5+1 group (U.S., Russia, China, the United Kingdom, France and Germany) that would impose constraints on its efforts to build nuclear weapons. In the meantime, the relaxation in sanctions the P5+1 group offered as an incentive to the Iranian regime to enter into negotiations has allowed its economy to rebound.
But just when everything seemed to be going as planned for the mullahs, world oil demand dropped. This in turn required major oil producers, like Iran, to come to an agreement on whether to decrease production and retain the price of oil, or to maintain production and watch the price of oil decline.
Daniel Yergin, who has written extensively on the worldwide impact of oil, wrote in the Wall Street Journal
The OPEC members in big trouble are the “have-nots”—those with small financial reserves and high government budgets.
These “have-nots” include Venezuela, Russia and Iran.
The official reason given for OPEC’s decision to maintain oil production and absorb the price decline is that it wants to maintain market share in the face of aggressive non-OPEC producers. But, Saudi Arabia, the dominant member of OPEC, is deeply concerned with the Iranian nuclear program. Its influence was clearly felt. Like its smaller oil-rich Arab Gulf state neighbors, Saudi Arabia can absorb the revenue decline from lower prices.
Iran will have a more difficult time. Especially if it insists on devoting billions to its nuclear project. Its government budget is heavily dependent on the revenue generated from high oil prices. Oil prices have declined by nearly 40 percent over the last six months.
The unexpected decline in worldwide oil demand may have put an end to Iran’s winning streak. As Robert Burns wrote in 1786, “The best laid schemes o’ mice an’ men often go awry.”
More from SNAPSHOTS
Double Standards: Boycotts and Discrimination in MassLive
May 16, 2025
Anti-Israel activists, including Harvard University’s Lara Jirmanus, a clinical instructor, seem to struggle with the concept of “discrimination.” Quoted in a May 14 MassLive article, “Harvard ‘failed to respond’ to 450 discrimination complaints. Staff hand-delivered [...]
Swarthmore Students Are Learning: It Was Never About Palestinian Rights
May 14, 2025
Students at Swarthmore College are so close to understanding the conflict. An article in the Swarthmore Phoenix details the frustrations of student activists with the college’s Students for Justice in Palestine. The gist of their criticism is [...]
AFP Arabic Stops Mislabeling Northern Israeli Communities ‘Settlements”
August 10, 2021
A view of Metulla, northern Israel (Photo by Hadar Sela)After failing to set the record straight last May when Agence France Presse's Arabic service repeatedly referred to Jewish communities in northern Israel as "settlements," the [...]
NY Times Praises Ilhan Omar’s Book While Glossing Over Her Antisemitism
August 19, 2020
A recent New York Times book review boosts Rep. Ilhan Omar’s (D-MN) autobiography while glossing over her antisemitism. In the paper’s Aug. 16, 2020 edition, NYT reporter Christina Cauterucci writes: The memoir offers breathing room [...]
When TV Interviews of Ilhan Omar Constitute Journalistic Malpractice
August 11, 2020
Rep. Ilhan Omar’s (D-MN) documented animosity toward Jews and Israel was ignored in recent interviews by MSNBC and C-SPAN. MSNBC’s The Beat for July 23, 2020 included host Ari Melber’s 10-minute conversation at 6:16 [...]
Boston TV Station WCVB Teamed Up With Terrorist Supporter CAIR
July 7, 2020
WCVB-TV (channel 5) (Boston’s ABC network affiliate) recently misled area viewers about a matter involving antisemitic propaganda. This occurred on its local Sunday show Cityline hosted by Karen Holmes Ward who is described by the [...]
Harper’s Magazine Echoed Palestinian Propaganda Condemning Israel And America
June 2, 2020
Writing in Harper's, Kevin Baker condemns the U.S. Middle East peace plan [“The Striking Gesture,” Easy Chair, May 2020], mischaracterizing it as, “Give up all your [Palestinian] hopes and your holiest places, embark on a [...]