Reports that oil personnel in Iran will go on strike against the government and its crackdown on protesters could constitute a major shift in the country’s political situation and likely the oil market. Shadows of 1979!
Needless to say, analyzing or predicting Iranian politics from this distance (and as a non-expert) is challenging, as illusions and variety bias on social media make it difficult to know how successful protesters might be. positive about anti-government protests, only to be disappointed when the government cracks down, violently, and restores order. One lesson is that the opposition tends to be composed of urban and middle-class elites, who are less prone to violence than the government and its various militias.
But I don’t forget the scenario of 1978, when an organization of bankers went to Tehran to set up a loan for the then Shah in power. When asked about the ongoing protests, they ignored them, saying they were not unusual and that the Shah had outlived them before. This was true, but it serves as an example of the cliché “nothing changes until he does. “
It is now reported that oil personnel at two refineries and a petrochemical plant went on strike in solidarity with protesters, which may imply that opposition is much broader than in the past. Oil personnel are government personnel and are more supportive of protesters. He and his defection say a lot about the intensity of discontent with the government, its many rules and the corruption that has absorbed much of the oil profits and hampered the personal sector.
On the one hand, the attack through Iranian oil personnel was a major detail in the overthrow of the shah, in part because concern about the disruption of Iranian oil production and exports encouraged the U. S. to do so. leave the country. On the other hand, no government can pressure Iranian President Ebrahim Raisi, let alone Ayatollah Khamenei, to resign if oil exports were halted. They can be raised through smaller refineries with minimal political influence and any Chinese political stance is unlikely to influence the government or opposition.
Restrictions on the refinery’s activity will create fuel shortages, further angering the public, turning it into a festival between the force of a gun cannon and the force of a barrel of gas. Of course, if the government imported gas in reaction to the strike, the global market would adjust accordingly, even if the quantities purchased are expected to be small.
The loss of Iranian crude in the market as a result of a widespread strike by oil personnel would be minor, especially if the Saudis and others decide to compensate. Given the long-standing political tensions between Iran and the Saudis (indeed, with the maximum of their neighbors), the maximum is likely not to seek to help the government but to undermine it. This would mean calming global oil markets with more materials to discourage Iran’s consumers from likely helping the government.
Ultimately, resolving the conflict will be the duty of the other people and the Iranian government and will likely result in small losses of crude oil and petroleum products on the world market, amounts that could be smoothly compensated through other manufacturers with the help of SPR. Retreats. Needless to say, the impact on the market will be bullish for prices, which is not welcome in the US. The U. S. and oil-importing countries can last only months.
But two imaginable political paths can exert downward pressure on prices, but not immediately. The government may make the decision to temporarily accept a renewal of the JCPOA nuclear deal, which would allow it to increase exports and make a profit to appease protesters. It probably wouldn’t work, as court cases lag far behind the economy and even if it did, the impact would be delayed. the stage in the streets.
Alternatively, the government may simply fall and a new government may not only renew the JCPOA agreement, but take other steps to join the foreign community, which would mean far fewer regional tensions. A new, less xenophobic government deserves to be placed much It is less difficult to attract foreign investment and allay fears of a tightening of the oil market of 3 to 5 years in the medium term. The term is expected to be less.
However, it is also conceivable that the government will return triumphant and, feeling empowered, will take a harder line during the JCPOA negotiations, once it returns delaying the end of sanctions. And even if there is a new government, there may be some significant delays in restoring oil production and exports as factions compete for the law and especially for revenue. Some build-up can be expected without foreign investment, and would be welcome, however, there are many obstacles to Iran becoming a major global supplier of oil again, regardless of which government is in power.