Analysis & Opinions - USA Today

Now is the Time to Hit the Iranian Regime With Lower Oil Prices

| Jan. 07, 2018

For the sake of the Iranian people and global stability, we need to lead the effort in suppressing oil prices beyond what Tehran can bear.

Mass protests are gripping Iran as its people express their discontent with crippling poverty, governmental corruption, and Tehran's highly expensive sponsorship of terrorist proxies around the Middle East. The protests are geographically widespread, rural and urban, and challenge the very sinews of Iran's mullahcracy. The United States can and should support Iranian freedom by pressuring the regime at its most vulnerable point, oil revenues. This strategy should have long- and short-term components, both designed to decrease global oil prices. 

Iran's dire economic situation is at the heart of this discontent. As President Rouhani acknowledged, the government cannot meet payroll and is seeking to increase revenue and decrease expenditures. Since 80% of Iran's budget comes from petroleum exports, the quickest and surest way to bring about regime change in Tehran is a broad campaign to reduce current global oil prices.

In order for Tehran to balance its budget, oil prices need to be around $130 per barrel, over twice what they are today. Several factors — including government-promised subsidies to wheat farmers and debt payment obligations that are headed toward default — are pushing Iran to the financial breaking point. Add to this the rising costs of Tehran's military establishment, and the mullahs' expanding commitment to fomenting chaos around the Arab world, and you have a recipe for financial meltdown. The doomsday scenario could only be avoided by a major rise in oil prices that would allow Iran, with 10% of proven global reserves, to rescue itself.

For more information on this publication: Please contact the Belfer Communications Office
For Academic Citation: Rivkin Jr., David and Nawaf Obaid.“Now is the Time to Hit the Iranian Regime With Lower Oil Prices.” USA Today, January 7, 2018.

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