Iran has always played the defiant country, claiming all along that Western economic sanctions have had little effect on the country however that tone changed this week when the countries oil minister acknowledged that a lack of investment in oil field development had caused declining oil production numbers.
The oil ministers announcement comes just after the foreign minister proclaimed “we cannot pretend the sanctions are having no effect.”
The countries realization that Iran central banking restrictions are causing problems began last week when a Polish natural gas company that had been working on a deal with the country for four years pulled out of the deal following Western sanctions on the countries banking system.
Iran attempted to rebound from those failed talks by offering a $1 billion deal to Russian oil company Tatneft however that offer was met with a rather embarrassing denial from the Russian company. Russian has historically been willing to skirt Western requests to do business in the region, however after years of attempting to be welcomed into the World Trade Organization the country was sworn in this past week and will likely work more closely with WTO nations and the objectives they set out to achieve.
Sanctions were strengthened last month when the United States and the European Union went after the countries central bank and oil industry in response to the countries refusal to end their nuclear program. Under the proposal by the United States, likely to be met with agreement by President Obama, countries that do business with Iran’s central bank could face severe penalties if they do business in the United States.