Iran Oil Income To Dry Up By 2015.

Iran is suffering a staggering decline in revenue from its oil exports, and if the trend continues income could virtually disappear by 2015, according to an analysis published in a journal of the National Academy of Sciences.

Iran's economic woes could make the country unstable and vulnerable, with its oil industry crippled, Roger Stern, an economic geographer at Johns Hopkins University, said in an interview and the report. Iran earns about $50 bn a year in oil exports. The decline is estimated at 10 to 12% annually. In less than five years exports could be halved and then disappear by 2015, Stern predicted.

For two decades, far longer than its designation by President Bush in January 2002 as part of the "axis of evil", the US has deployed military forces in the region in a strategy to pre-empt emergence of a regional superpower. But the report said Iran could be destabilised by declining oil exports, hostility to foreign investment to develop new oil resources and poor state planning.

Stern's analysis, which appeared in the recent edition of the Proceedings of the National Academy of Sciences, supports US and European suspicions that Iran is trying to develop nuclear weapons in violation of international understandings. But, Stern says, there could be merit to Iran's assertion that it needs nuclear power for civilian purposes "as badly as it claims". He said oil production was declining and both gas and oil were being sold domestically at highly subsidised rates. At the same time, Iran is neglecting to reinvest in its oil production. In 2004, Iran's oil profits were 65% of the government's revenues.