Market News

 February 09, 2012
Could Iran sanctions spark green revolution?

 Iran could be forced to step up investment in renewable energy if ongoing international oil sanctions tighten further, the country's energy minister has said.

Restrictions imposed by the EU and others have banned suppliers signing new deals with the world's fifth largest oil producer, prompting China, Iran's biggest customer, to court other Gulf nations in search of new supplies.

The latest wave of EU oil sanctions are expected to come into effect later this year, further intensifying diplomatic pressure on the Gulf state over its controversial nuclear programme.

But according to energy minister Rostam Qasemi, the country is now committed to reducing its reliance on oil through investment in clean energy sources, including renewables as well as the country's highly controversial nuclear plans.

Oil ministry news website Shana yesterday reported Qasemi as saying "reliance on hydrocarbon resources in the long run is neither possible nor meets national interests".

"Gradual reduction of oil consumption on the one hand and a revolutionary and swift move toward using renewable energies on the other hand are the only appropriate mechanisms which can help the country," he added in a speech to the National Energy Conference in southern Iran.

The heightened tensions in the region could send the price of Brent crude up to $125 a barrel, according to analysts, while some have warned prices could rise by a further 50 per cent if Iran makes good on its threat to close the Strait of Hormuz, through which 17 per cent of the world's oil supply and 25 per cent of its liquid natural gas pass each day.