Aware that the economic squeeze is having a cascading and negative impact on Iran’s ability to tap its oil potential, India is still holding a straight bat in its dealings with Tehran taking a long term view that its future energy needs require a policy of continued engagement.

With pressure mounting from different quarters in the US for a rethink in New Delhi on its ties with Tehran, the government did carry out an independent assessment to gauge the political and economic climate in Iran.

The Joint Intelligence Council, which reports to National Security Advisor M K Narayanan, prepared an assessment that was discussed at length in a meeting on April 11 which was attended by Foreign Secretary Shiv Shankar Menon, Defence Secretary Shekhar Dutt, Petroleum Secretary M S Srinivasan besides the head of the two intelligence agencies.

According to this, Iran is going to increasingly feel the debilitating impact of the UNSC sanctions and that signs of domestic discontent with Iran President Mahmoud Ahmadinejad are already visibly. While this largely stems from the poor showing on the economic front, it has also had political ramifications, with several important quarters in Iran questioning the logic behind such extreme and vituperative remarks over the nuclear stand-off with the US.

The key points in the JIC assessment are: n Iran has the fourth largest oil reserves in the world, but is in dire need of investments to the tune of $100 billion in the sector

• At current levels, Iran is not in a position to export large quantities of oil and may not be able to export after 2015. No fresh capacity has been added

... contd.