Gulf Politics: The Energy Factor

Few countries in the world can match Iran’s geo-economic and geo-political significance in the global energy markets. The country holds the world’s largest proven natural gas reserves (18.2%) and ranks fourth in oil reserves (9.3%).1 It is a founding member of both the Organization of Petroleum Exporting Countries (OPEC) and the Gas Exporting Countries Forum (GECF). In 1908, Iran became the first country in the Middle East to discover oil. In addition to these massive hydrocarbon deposits, a relatively well-developed energy infrastructure, and a long history as a major producer and exporter, the Islamic Republic enjoys a key strategic geographical location. It has close and easy access to two major consuming markets – Europe and South Asia. Finally, the Strait of Hormuz, the world’s most important transit chokepoint, is off the southeastern coast of Iran. In 2013, roughly 30% of all seaborne traded oil and 30% of global liquefied natural gas (LNG) flowed through the strait.

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