By: Elite Economists
Shell recently joined with Spain and Iran to develop a new gas field in Iran. The development is aimed to take place about a year from now and become a new and very important source of income for Iran. This development would give Iran even more leverage in the international realm of politics and economics. As of now Iran has the second largest natural gas reserves, following Russia. This movement creates many issues for the U.S.
As an adversary to the United States as well as many other democratized nations, a move like this threatens the U.S. The U.S. created a law, Iran-Libya Sanctions Act in 1995 in which the U.S. will create a sanction against businesses and nations that invest too much in Iran’s energy source. This deal is currently under review and can possibly cause the U.S. to act on this business move.
The U.S. government is greatly affecting various economies with their aggressive government regulations. The pressure is on businesses and nations to avoid profitable dealings with American enemies. This deal would’ve bought in about 15 billion to Iran’s income every year. Even with countries and businesses in need of a financial advancement, I’m sure this is hard for them to swallow, especially when the business opportunities are right in front of their faces. This is once again an example of how the U.S. succeeds in controlling the world economy.
Source: "Big Shell Iran deal could bring U.S. sanctions"
Subscribe to:
Post Comments (Atom)
1 comment:
By HoosAdvantage
Elite Economists’ argument that the U.S. succeeds in controlling the world economy is over stretched. Although the U.S. economy is the largest in the world, it has limited ability to force its wills upon other countries without the cooperation of the big players in the world like China and the European Union. Shell’s investment in Iran is indeed over the limit put upon by the United States and is supposed to be sanctioned under the Iran-Libya Sanctions Act in 1995, but the article pointed out that “no companies have actually been sanctioned by the law.” Therefore, this law is de facto non-existent. Many African countries with poor records on human rights were denounced by the U.S., but their economies are thriving because of the trade with and FDI from China. Unless Iran is condemned by the international community, it is very difficult for the U.S. to impose sanction against Iran unilaterally. Also, China is on its track to over take the U.S. as the world’s largest economy (in terms of Purchasing Power Parity) by 2010, it is obvious that the U.S. is not the only power in the world. Its influence on other countries’ economies depends greatly on its interaction with the major powers. After all, it is all about game theory.
Post a Comment