Oil prices fell again after Iran and world powers announced resumption of talks to put an end to the nuclear standoff. Traders said that prices also slipped on prospects that slowing economic growth would cut demand for crude.

Talk might be cheap, but in the case of Iran, talk might lead to cheaper gas at the pump.

Traders were watching developments in the Middle East after what appeared to be a shift in US policy toward Iran announced last Tuesday, which left much more impact on the oil market.
Talk might be cheap, but in Iran’s case, talk might lead to cheaper gas at the pump.
While certainly not the only reason for sky-high oil, unnecessary tensions over Iran’s civilian nuclear program have helped fuel the surge in gas prices that is altering American lifestyles. The cost of a barrel of oil shot up nearly 8 percent in a single day in June after a senior Israeli official raised the specter of an attack on Iran, CHN reported.
But the price has dropped to $131 from a record $147, not only because Americans are driving less but because the Bush administration has finally come to its senses to talk to the Islamic Republic of Iran over its civilian nuclear program instead of demanding that the country suspend its nuclear enrichment before any face-to-face negotiations.
This weekend, a top State Department official, William J. Burns, attended international talks in Geneva aimed at resolving the impasse over Iran’s nuclear program.
While the administration said Burns would not negotiate, his presence was hailed as a sign that the White House is trying to avoid a war that, among other nightmares, could see Iran blocking the Strait of Hormuz, conduit for as much as 40 percent of the world’s oil.
And in other evidence that US-Iranian tensions are easing, a British newspaper reported that the United States plans to station diplomats in Iran for the first time since the 1979 Iranian revolution. President Mahmoud Ahmadinejad said Iran would welcome a US diplomatic office in Iran.

Growth Potential
According to the most recent tally by Oil and Gas Journal, Iran houses the second-largest pool of untapped petroleum in the world, an estimated 125.8 billion barrels. Only Saudi Arabia, with an estimated 260 billion barrels, possesses more; Iraq, the third in line, has an estimated 115 billion barrels. With this much oil--about one-tenth of the world’s estimated total supply--Iran is certain to play a key role in the global energy equation, no matter what else occurs.
It is not, however, just sheer quantity that matters in Iran’s case; no less important is its future productive capacity.
Although Saudi Arabia possesses larger reserves, it is now producing oil at close to its maximum sustainable rate (about 10 million barrels per day). It will probably be unable to raise its output significantly over the next 20 years while global demand, pushed by significantly higher consumption in the United States, China, and India, is expected to rise by 50 percent.
Iran, on the other hand, has considerable growth potential: it is now producing about 4.23 million barrels per day, but is thought to be capable of boosting its output by another 3 million barrels or so. Few, if any, other countries possess this potential, so Iran’s importance as a producer, already significant, is bound to grow in the years ahead.

Hydrocarbon Reserves
And it is not just oil that Iran possesses in great abundance, but also natural gas. According to Oil and Gas Journal, Iran has an estimated 940 trillion cubic feet of gas, or approximately 16 percent of total world reserves. As it takes approximately 6,000 cubic feet of gas to equal the energy content of 1 barrel of oil, Iran’s gas reserves represent the equivalent of about 155 billion barrels of oil.
This, in turn, means that its combined hydrocarbon reserves are the equivalent of some 280 billion barrels of oil, just slightly behind Saudi Arabia’s combined supply.
At present, Iran is producing only a small share of its gas reserves, about 2.7 trillion cubic feet per year. This means that Iran is one of the few countries capable of supplying much larger amounts of natural gas in the future.
Critical Role
What all this means is that Iran will play a critical role in the world’s future energy equation.
This is especially true because the global demand for natural gas is growing faster than that for any other source of energy, including oil.
While the world currently consumes more oil than gas, the supply of petroleum is expected to contract in the not-too-distant future as global production approaches its peak sustainable level and then begins a gradual but irreversible decline.
No doubt the major US energy companies would love to be working with Iran today in developing these vast oil and gas supplies.

Some 10 trillion rials have been invested in upgrading port facilities, said Iran’s Ports and Shipping Organization director general for transit and tariff affairs.
Mohsen Sadeqifar elaborated that all port equipment and facilities are available domestically, reported IRIB.
Removing the obstacles and amending the regulations are necessary to expand transportation of goods by ship, he observed.
Currently, about 14 international shipping lines operate to and from Iranian ports, he said, adding port costs are 10 percent lower in Iran compared to the rates in regional countries.
The official put the ports’ cargo handling capacity at over 110 million tons, noting that 98 percent of commodities are imported to the country by sea.
About 10,000 ships with capacities of over 1,000 tons call at Iranian ports annually, he pointed out.
With the inauguration of the second dock at Shahid Rajaei Port, the official said, its capacity has increased to three million TEUs of containers from 1.5 million.
Sadeqifar predicted that the capacity would reach six million TEUs within two years.
In addition to the privatization of Fereidounkenar (in the Caspian province of Mazandaran) and Genaveh (in southern Bushehr province) ports, all port services have been handed over to the private sector. Privatization of the shipping sector has also begun, he concluded.

Iranian exporters can sell 30-40 percent of saffron produced in Khorasan provinces (Khorasan Razavi, North and South Khorasan) to China once the Chinese saffron market is tapped, said Khorasan Razavi governor general.
Mohammad-Javad Mohammadizadeh pointed out that currently China imports saffron from the United Arab Emirates, according to ISNA. It is now possible to export Iranian saffron directly to China, he disclosed.
The official underlined the need to promote ties with western Chinese province of Sinkiang.
Given the upcoming visit of Sinkiang governor general to Mashhad in the second half of 1387 (Iranian year ending in March 2009), Mohammadizadeh said, the two sides aim to commission joint projects during the visit.
He referred to solar energy technology transfer as an achievement of a visit by Khorasan Razavi delegation to Sinkiang province early July.
The Chinese have voiced readiness for joint investment in this regard, the official added.
Mohammadizadeh listed joint investment in cement industry, production of steel and construction of prefabricated aluminum fa�ade as the other agreements were inked between the two sides.
An economic delegation from Khorasan Razavi province, led by former governor general Reza Abdolmaleki, visited Orumqi, capital city of Sinkiang region early July. The delegation met regional authorities and officials of Sinkiang’s commercial and business sectors during the four-day visit and sought ways to expand ties between the two provinces.
The volume of China’s trade with Khorasan Razavi is currently around $1.5 million annually.

Slovak entrepreneurs will discuss joint investment and expansion of bilateral economic relations with their Iranian counterparts in Tehran, on Tuesday.
In the meeting delegations from the two sides will discuss cooperation between the private sectors as well as possibilities for joint ventures in production and import of household appliances, medical equipment, inflammable goods, food and semi-finished goods, Presstv reported.
Igor Junas, Chairman of the Bratislava Regional Chamber of the Slovak Chamber of Commerce, who is a member of the Slovak delegation, said talks between the entrepreneurs of the two countries will be useful and productive.
He expressed hope that the discussions would help produce joint investments.
Referring to the willingness of the Slovak Chamber of Commerce to sign trade agreements with Iran, Yahya Al-e Eshaq, head of Tehran’s Chamber of Commerce, said the visit by the Slovaks provides an opportunity for the expansion of bilateral economic relations.

Iran will resume wheat imports next month after a devastating drought led to a significant drop in the country’s grain production.
“We will start importing wheat next month, at a monthly rate of one million tons,“ Iran’s Deputy Minister of Commerce Majid Parsania told Presstv.
The Islamic Republic reached self-sufficiency in producing wheat in 2004, after years of mostly relying on imports for the grain, which constitutes the main part of the Iranian diet. Last year, the country even started exporting wheat to neighboring countries such as Iraq and Oman with plans to expand exports to global markets.
This year, however, those plans seemed quite far-fetched as a 50 percent drop in annual rainfall dampened all hopes of meeting domestic demand, not to mention aspirations of greater exports. A 20 percent fall in annual grain production finally forced Iran to stop wheat exports in March.
Official predictions suggest that the country will have to import 5 to 6 million tons of wheat by the end of the Iranian year (March 20, 2009) to prevent shortages.

A conference themed ’Transportation, Transit and Customs: Challenges and Opportunities’ will open in Tehran on Tuesday.
The meeting is organized jointly by Tehran Chamber of Commerce, Industries and Mines, Iran Customs Administration, Road Maintenance and Transport Organization as well as Ports and Shipping Organization, ISNA reported.
Head of the Transport and Customs Commission of Tehran Chamber of Commerce Masoud Khansari said that the conference aims to review the problems facing the development of transit sector. He added that officials of road, sea and air transport organizations will discuss the reasons for the major portion of the country’s transport potentials remaining untapped.