By Adam Gonn

Source: The Media Line

March 18, 2010

Tehran responds to United States’ push for tougher fuel sanctions with launch of new kerosene car engine.

Iran has revealed a new dual fuel car engine that will run both on gas and kerosene, a move set to bolster the country’s ability to withstand international economic sanctions.

Iranian inventor Manouchehr Bizaban-Moqaddam adapted the design from technology commonly used in jet engines, the official Iranian news agency Press TV reported.

Iran has one of the largest proven oil reserves in the world but lacks the refining capabilities to turn the crude oil into consumer products such as gas.

Iranian raw oil must first be exported to countries on the southern side of the Gulf for processing before re-importation as gas. The United States has focused on this weakness as Washington tries to impose tougher sanctions on Iran for its alleged nuclear weapons program.

“It’s clear that the dependence on gas import was becoming quite high in the last two to three years,” David Butter, regional director for the Middle East & North Africa with the Economist Intelligence Unit, told The Media Line, adding that the launch was part of preparations for sanctions and that “part of it is trying to reform energy imports.”

“The question is how successfully this can be implemented,” he said. “If you look at the refining side, there are technical solutions but there are restrictions on the technology they can get. So they are trying to develop their own.”

“There is also the financial side of getting credit, which they have been trying to get around by issuing bonds,” Butter said. “It might be hard to pull off with talks about sanctions and they would probably have to pay a high fee.”

In January 2010 Iran announced plans to build seven new refineries to turn the country into a gas exporter. The combined production capacity of the plants when completed is expected to be 1.6 million barrels a day, in addition to the current capacity of 1.5 million barrels a day.

U.S. sanctions against Iran have been in place since 1987 but have so far had little impact on Iran’s capabilities and determination regarding its nuclear program. The new sanctions, for which the U.S. hopes to win approval from the United Nations Security Council, will apply to all the members of the Unites Nations and regulate their dealings with Iran.

The U.S. has had difficulty in securing the backing of Russia and China, who in addition to having veto power in the Security Council as permanent members, also have substantial business ties with Iran.

“I would be skeptical about the success for a new round of sanctions,” Dr. Christian Koch, director of international studies at the Gulf Research Center in Dubai, told The Media Line. “Given that China has been pursuing its economic interests independently of concerns over the Iranian nuclear program, I do not see a chance to get the Chinese on board at this stage.”