Public Reports

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Iraq’s energy security strategy: A path to diversity and energy independence

December, 2020

A paper co-authored by Dr. Sara Vakhshouri and Dr. Abbas Kadhim, director of the Iraq Initiative at the Atlantic Council, outlines immediate and medium-term practical measures to tackle Iraq’s most pressing issues, in its quest to attain energy independence.

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US Sanctions and Iran's Energy Strategy

November, 2020

After years of weathering nuclear-relat- ed sanctions and limitations on its oil ex- ports, Iran reached an agreement in 2015 with the five permanent members of the UN Security Council plus Germany over its nuclear program, the Joint Comprehensive Plan of Action ( JCPOA). In May 2018, President Donald Trump announced U.S. withdrawal from the agreement and – despite Iran’s compliance with the JCPOA – implemented a “Maximum Pressure” tight sanctions policy aiming, inter alia, at “zero oil export”.

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The America first energy plan: Renewing the confidence of American energy producers

August, 2017

US energy policy is poised for a drastic reversal. The Clean Power Plan is giving way to the America First Energy Plan, as President Donald Trump take steps to unwind Barack Obama–era clean energy initiatives, strip US energy policy of environmental and climate concerns, and focus solely on two priorities: producing low-cost energy and creating American jobs. President Trump has pledged to reignite the US coal industry and expand domestic fossil fuel production. His administration and congressional allies plan to roll back regulations, open hundreds of millions of acres of federal land to coal, oil, and gas exploration, and cut federal funding for climate and environmental programs. However, while the president has thus far taken steps to dismantle environmental regulations, reduce climate funding, and exit the Paris climate agreement, the real question is whether these moves will lead to a boom in domestic fossil fuel production. When it comes to oil and gas, production has been increasing (with the exception of 2016) since 2008, while domestic coal production (and consumption) has largely trended in the opposite direction. Republican control of the executive and legislative branches could pave the way for Trump to implement his America First Energy Plan, which many fossil fuel producers have responded favorably to. However, despite Republican control of the executive and legislative branches, President Trump must surmount substantial obstacles to make good on his promises of regulatory rollback heralding in a coal revival. The headwinds against coal have been primarily economic, rather than regulatory, and supporting coal could come at the expense of natural gas—contradicting both the president’s own plan to boost natural gas and Republican free market principles. Thus, it is not yet clear to what extent President Trump can overcome market forces and align seemingly contradictory aims to achieve his energy priorities.

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Post-Vienna: Prospects for Iran’s oil production and exports

January, 2017

With the January 2016 implementation of a comprehensive international bargain over Iran’s nuclear program, the Iranian energy industry is poised to undergo a dramatic transformation. Since the 1979 revolution, recurring rounds of sanctions and eight years of war with Iraq have hammered Iran’s oil production and export capac- ity. Despite boasting the fourth largest proven oil reserves in the world, Iran’s oil production and exports languished at 4 million barrels per day (mb/d) and 2.5 mb/d, respectively, in 2011. The entrance of the European Union (EU) and United States into an even more stringent sanctions regime in 2012 further crippled an already ham- strung industry. Iran’s crude exports dropped 40 percent to 1.5 mb/d in 2012 and sunk to an average of just 1 mb/d by 2014 as foreign markets closed, international investment evaporated, and supply chains withered. With storage overflowing and domestic consumption able to absorb only 1.5-1.7 mb/d, total production likewise collapsed 30 percent to 2.7 mb/d by 2014. Despite a slight uptick in 2015, total oil and liquids production remained low at 2.9 mb/d of crude oil, and between 692,000 to 710,000 barrels per day (b/d) of natural gas liquid (NGL) and condensate. Iran’s 2016 condensate production was 520,000 b/d. Now, as the Joint Comprehensive Plan of Action (JCPOA) nuclear deal ushers Iran back into international energy markets, its oil and gas industry is poised to reach its full potential. The impacts promise to be profound and wide reaching as oil sales provided 80 percent of Iran’s export earnings and 60 percent of its state revenues in 2013. With Iranian oil production and exports already rising following the nuclear deal, this paper examines scenarios for Iran’s full reentry into international oil and gas markets.

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Iran’s energy policy after the nuclear deal

November, 2015

This report looks at changes to Iran’s energy policy in light of the 2012 acceleration of economic and energy sanctions that the country faced because of its nuclear program, as well as Iran’s July 2015 nuclear deal with the Western powers. To gain a better understanding of the psychology and rationale of the Iranian leaders with regard to their energy policy, this report starts by discussing the history of Iran’s energy industry, including the country’s conflicts with the international community over its energy resources. These historical examples, which are discussed in detail, indicate that after any conflict and relief from international sanctions, Iran took steps toward increasing its domestic capability in order to become more independent. The next section of the report is dedicated to changes in Iran’s energy policy since 2012, including the impact of the sanctions relief that was part of the July 2015 nuclear deal. It compares Iran’s crude oil and natural gas production and export policy after the 1979 Revolution with those from after the 2012 sanctions and the 2015 nuclear agreement. Iran’s upstream and downstream energy policy, its plans for its petrochemical industry, and its new upstream investment regulation (Iran Petroleum Contract) are discussed in detail. Other emphasized topics include Iran’s: energy diplomacy; plans for reintegrating with the global energy market; strengthening its political and economic ties with its Arab neighbors; increasing incentives for international investors to invest in its energy industry; attempts to regain its lost oil market share; controlling its domestic energy consumption; and other specific measures to increase the country’s resistance toward possible sanctions and limitations in the future, based on the doctrine of “Economy of Resistance.” It is important to note that this report only discusses the changes in Iran’s energy policy and diplomacy since 2012. Hence, analyzing the viability of each policy is above the scope of this report. Oil is not only the main driver of Iran’s economy and its primary source of income, but also an important diplomatic tool. Nuclear-related sanctions on Iran’s energy industry, particularly since 2012, have created a new approach among Iranian leaders toward the economy, energy industry, and oil diplomacy. This will be particularly true in light of the possible sanctions relief prompted by the nuclear agreement between Iran and the P5+1 (China, France, Germany, Russia, the UK and the US) reached on July 14, 2015.

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