The leader for PE’s July issue, on Iran, its election and its energy secctor. The full thing is on the website. www.petroleum-economist.com

IRAN’S ENERGY sector was in a mess before the contested re-election of President Mahmoud Ahmadinejad, and it will be in a mess after the protests, whether they succeed in ousting him or fail. That is a tragedy made in Tehran. It’s also a problem that can only be resolved there.

But it is also a consequence of the new geopolitics that have emerged in the past year. Notwithstanding the recent oil-market rally, the collapse of the oil price from last year’s peak has disproportionately affected the producer countries that used the bull-run to mask problems in their economies. Under pressure at home, Ahmadinejad flew to Russia to meet leaders of other developing economies. The images of protests on the streets of Tehran would not have been lost on the political elite in Russia. There, too, the fall in the oil price has exposed misdirection, endemic corruption and the government’s failure to diversify an economy too reliant on revenue from commodity exports, especially oil.

The leaders of Russia, Venezuela, Iran, and anyone else who gloried in the oil-price inflation that bruised the world’s economy so badly are now desperately praying that the latest market surge holds. That seems unlikely. Iran’s street protests are about urgent matters – the stench of vote-rigging around Ahmadinejad’s re-election; but the frustrations of the protestors would be easier to ignore if Iran’s elite could point to economic successes. It can’t. (…) The rest is for subscribers to PE, I’m afraid.