In the interview, the American scholar aired his views about a number of general issues concerning oil and gas markets and Iran's role in this regard.    

 

Duff: My name is Gordon Duff. I served as Senior Vice President of Castle, Overmyer and Poole along with Capital Investments USA and Capital Investments International, merchant banks specializing in financing oil and gas transactions.  I have advised a number of governments in Africa and the Middle East on oil policy, negotiated oil agreements and been party to many billions of dollars in oil and gas transactions.  I have also worked on pipeline and refinery projects.  I am currently Managing Director of Adamas Aerospace, a London based company that specializes in use of satellite and platform based sensors in resource and environmental management along with security issues.

Duff: The biggest player in the global gas market is Russia.  Russia and their marketing partners control the markets of Europe through a combination of factors, primary among these the ability to deliver gas directly from wellhead to consumer through strategic pipelines.

The cost efficiency of this model compared to liquidification plants with costs of not only transportation, generally ship and sometimes rail, along with storage, has left Russia paramount, a position they use for political leverage.

The basis, the financial model, of pipeline infrastructure direct to both consumers and commercial users inhibits competition.  As we are currently seeing, the promise by the US to offer LNG (Liquid Natural Gas) as a “hedge” against aggressive Russian pricing has a number of flaws.

  

The gas supplies of the US are at high current levels due to “fracking,” a practice dangerous to the environment that has put tens of thousands of square miles of the United States at risk of becoming uninhabitable due to poisoning the aquifer.  

Additionally, gas supplies from fracking seldom last more than 5 years, a fact ignored when being presented to the public as an offset to environmental risks.

As with oil, gas supplies are very much a political issue, meaning that there are two directions, gas prices and availability can drive governments to change foreign policy objectives but, moreover, the economic power of gas producers can also push governments to change policy to effect prices.  To that extent, fabricated crises and false flag terrorism are seen as “marketing strategy.”

Wars of aggression, threats to pipelines, production fields or key sea transit points such as Hormuz, are also issues of “marketing policy.”

Key areas of “pushback” may be seen in Qatar’s “dumping” of gas supplies at less than cost, a move tied to that small nation’s desire to become a global player militarily.  Thus, Qatar pumps gas into the market to suppress pricing while expending capital in support of jihadists such as the ISIS, along with substantive funding from Saudi Arabia.  As the ISIS moves into Iraq, it becomes increasingly clear that they are chasing oil and gas supplies, not seeking to form a political entity.

 

Duff: Iran can and will move on the model we have seen from Russia, making use of pipelines and their inherent economic efficiency to form long term trade relationships with Pakistan, China and other nations that join the pipeline fed marketing group as driven by global pricing, availability and political concerns tied to pipeline routes.

In the end, Iran will be a big player in Asia and eventually into Southeast Asia.

  

Duff: World oil markets are subject to the geopolitical manipulations of a handful of individuals.  America's Koch brothers manipulate oil futures for instance.  It doesn't take a genius to note that oil pricing is not subject to supply and demand.  When demand drops, supplies are either mysteriously cut or a global crisis of some kind is staged in a timely manner.

After the global financial crash of 2007/8, oil prices should have returned to below $50 bbl.  They didn't.  Instead, the "Iranian nuclear crisis" was invented and prices stayed up, draining the asset base of all but the wealthiest few in the west.  We call this a "pump and dump" and manipulated oil markets were very much a part of the model used.

The ability to wildly manipulate oil and fuel pricing based on conspiracy theories, conjecture, phony news stories and false flag terrorism has been one of the most destabilizing economic factors of the past century.

​Duff: Iran is the 4th largest producer of natural gas. Key to Iran’s marketing position is its development of power generation including nuclear power, which will allow higher percentages of gas to enter the world market.

Though Iran has more gas available for export than any other nation, Iran exports as yet little natural gas. This isn’t an accident, not when the “players” in the natural gas production and pipeline delivery are examined carefully.  

The economic impetus tied to suppressing Iran’s export of natural gas is clear. As a market forces with vast production capability and an inherent unwillingness to engage in price fixing and market manipulation, Iran has made powerful enemies.

  

Thus, as this situation begins to redress, the hotels of Tehran fill with newfound friends, not simply seeking a “piece of the pie,” but knowing that when Iran’s production come “on line” as deliverable, previous market paradigms will no longer be applicable.

​Duff: Iran is probably capable of easily exceeding 4mb/d and can do so within three years.  The key issues are that Iran’s oil is the highest quality, the reserves are capable of sustaining production for many years and, with this much additional oil entering the world market while, simultaneously, the US is becoming more energy independent, world markets are threatened with a significant correction.

Toward that end, where China’s growth levels to prove less than sustainable, a hypothesis seen as likely, Iran will find herself well positioned to use oil revenue to build a diverse economy but not capable of maintaining an exclusive hydrocarbon export economy, a serious error now threatening Russia.

 

​Duff: Natural gas exporting nations live in uncertain circumstances.  The US, as the world’s largest consumer and producer, establishes the world’s price marks.  Similarly, pipeline projects and liquefaction efforts are often financially squeezed as we have seen with cross Sahara pipeline plans or supplies from Libya to Southern Europe. Predatory gas markets deeply parallel and even drive, as mentioned earlier, global security threats. Unless global gas markets are stabilized, global development and global security will be equally threatened.

   

​Duff: The ISIL is all about oil. Taking advantage of Shiite control of key oil regions in Iraq and the displeasure Kurdistan has expressed at being subject to Oil policy from Baghdad, policy that “matured” at the height of corruption driven by the vast US led theft of Iraqi oil, many of Iraq’s Sunni leaders are ready to separate from the Baghdad government.

Strangely, the ISIL is not seen as a threat to world oil markets. This, in itself, is telling.

 

​Duff: US and EU sanctions have been economically suicidal for the West. Walling of Iranian oil exports has been only one of many methodologies used to manipulate oil prices, particularly the oil futures market.  Thus, when supplies are burgeoning and, with Iranian production “on line,” reaching the point of potential glut, oil prices maintain disastrous levels.

The problem in the west has been that the excess profits from oil profiteering is not reinvested nor taxed.  It is expressed in lower standards of living, declining economies and political instability.

   

​Duff: The IGAT pipelines are a good political move, integrating Iran with her Persian Gulf neighbors and adding to a global mosaic as to available “on line” supplies available to the gas hungry west.  As an economic move, it is very good policy for Iran and makes her less vulnerable to economic factors effecting Pakistan, India and China.

 

​Duff: Reformer represented a health threat to Iran and was only an option because of sanctions. Iran will now be free to use that petrochemical capacity for production of products based on global market needs rather than political necessity.  

   

Iranian Researcher of Western European and North American Studies