Iran plans to counter sanctions by building seven refineries

According to the official Iranian news agency IRNA, the new oil and gas refineries will allow Iran both to meet domestic demand and become a gas exporter, although the agency failed to state when construction was due to start.

Though Iran has one of the largest known oil reserves in the world, it lacks the necessary refineries to turn the crude oil into high value consumer products such as gas. If completed, the new plant will significantly boost Iran's oil industry.

Iran relies on exporting its oil to southern Gulf countries for refinement, which necessitates re-importing its own oil at a much higher price. New sanctions being considered against Iran by the United States plan to target this dependence.

"From an economic point of view, it's very difficult, simply because it's going to be a very costly enterprise," Mohammed Shakeel, editor and economist with the Economist Intelligence Unit, told The Media Line.

"But also for Iran, it's a very immediate concern as well, because the threat of sanctions is targeting that particular sector. So the government wants to show that it's on top of developing its refineries, and therefore is able to handle any pressure from sanctions," he said.

"Whether it has the resources to carry this out is a completely different story," Shakeel added, referring to the huge costs of constructing refineries.

Regional analysts suspect Washington might find it tricky to get some Gulf countries to follow its directives as Oman recently signed a gas cooperation deal with Iran; Kazinform cites the Arab News.

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