Unprecedented oil prices fail to mask uncertain future ///

Despite the nuclear standoff and economic sanctions, higher oil prices continued to fuel Iran’s economic growth, which exceeded 6% in recent years, and finance government spending on social programs. Oil revenues exceeded $70 billion in the last Iranian year, which ended on March 19. However, inflation and unemployment remain high. The sanctions have crippled Iran’s ability to develop its huge gas resources. The fear of confrontation have forced the government to take unpopular steps to reduce gasoline imports, including rationing. Efforts to curb gasoline consumption, gasoline smuggling, and gasoline imports have been moderately successful. The world’s fourth-largest oil producer lacks refining capacity and, therefore, must import large amounts of fuel, which it then sells at heavily subsidized prices. In June 2007, Iran introduced gasoline rationing to curb soaring consumption; this sparked riots and damage to about one-third of its fuel retail outlets across Iran. A change in Energy Minister ensued in August 2007.

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