Five years before the Islamic Revolution, Iran produced 6.1 million barrels of oil a day. By the end of 2006 the Iranian oil industry was only pumping 3.9 million barrels a day, 5 percent below its OPEC quota. Barely able to produce any oil for export or cope with escalating domestic demand, Iran's energy industry has been sliding steadily toward crisis. Yet Iran's oil reserves are second only to Saudi Arabia's, and its gas supply is eclipsed only by Russia's. Having vast energy reserves and the technology to extract and refine them, however, are two different things. A mega-deal struck recently with China, and membership of a select Asian club, may yet help turn Iran's ailing energy industry around -- and without help from the West. The big question facing Iran now is which will kick in first: economic relief from a new era of energy mega-deals, or a waning of its regional influence born of increasing domestic economic failure? And then there is the wild card in the pack: the nuclear one. The Other "Axis"
Facing Economic Squeeze, Iran Plays Asian Energy Game
