Iran’s has announced plans to invest $46 billion in oil refineries to make the country self sufficient.
Alireza Zeighami, Iran’s deputy oil minister, said the country would invest the funds to develop and optimize the country’s oil refineries. United Nations sanctions, he said, would not curb the refineries’ construction.
The announcement comes as Iran’s import of gas has nosedives as a result of a new round of UN sanctions. According to a report by Reuters, only three ships brought gas to Iran in July, as international traders begin to shy away from doing business in Iran.
“This is a hopeful stab at defiance against the sanctions regime being imposed on Iran,” Rory Fyfe, an expert on the Middle East oil and gas industry with the Economist Intelligence Unit told the Media Line. “But it will be some time before we know whether the sanctions are having their desired effect.”
The United Nations Security Council slapped a fourth round of sanctions on Iran last month, barring dealings with firms linked to the Iranian Revolutionary Guard Corps.
The Revolutionary Guard is a separate organization from the Iranian army and operates its own armed forces, navy, air force and militia. Its goal is to preserve the theocracy in Teheran, but over the years it has widened its scope and runs a vast business empire, ranging from construction to telecommunications.
Potkin Azarmehr, an Iranian opposition blogger, said the sanctions seem to be having an effect and that the government is concerned.
“Despite the government putting on a bravado face, the sanction are appearing to have a bite,” Azarmehr told The Media Line. “We see in the news that we are getting from people in Iran that the economic conditions are getting worse, there are long queues for petrol [gas] and price hikes like never before.”
“The merchant class is also getting worried and they are usually a good indication on the economy,” he added.
Despite Iran having some of the largest proven oil and gas reserves in the world the country suffers from a severe lack of refining capabilities. The crude oil needs to be exported to be refined into consumer products such as gas, which then has to be re-imported at a higher cost.
The new UN sanctions are the latest stage in an ongoing standoff between the United States and Iran over the end goal of Iranian’s nuclear program. Washington and others claim Iran is using its program as a cover to produce atomic bombs, but Tehran argues the program is for the peaceful purpose of power production.
Following the new U.N. sanctions, which cover all 192 member states of the global body, both the United States and European Union tightened their own sanctions further.