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Source: http://www.nytimes.com/2010/03/07/weekinreview/07mouawad.html
Are Iran's Oil Reserves Its Trump Card?
(New York Times) Jad Mouawad - Iran holds the world's second-biggest oil and gas reserves and supplies about 4.5% of the world's oil production. Iran may be counting on China to shield it against international sanctions that could really hurt, but some analysts believe that would be expecting too much. "The Iranians are overconfident in the Chinese reliance on them," said Jon Alterman of the Center for Strategic and International Studies. Meanwhile, Erica S. Downs of the Brookings Institution says it is unclear how much money the Chinese have spent so far in Iran's energy sector. "The Iranians aren't getting all they were hoping for from China," she said. The global recession isn't helping. Iran needs oil prices to stay above $90 a barrel to balance its budget, according to PFC Energy, a consulting firm. Also, unlike a few years ago when the world's oil system could barely keep up with growing demand, there now is ample spare capacity, much of it in Saudi Arabia. Cliff Kupchan, a former State Department official and now a director at the New York consulting firm Eurasia Group, said this meant that Iran no longer held a "trump card" when it comes to oil.