Iran makes money every time oil prices go up, giving it an incentive to keep turmoil roiling, and keep oil prices at terror—threat levels. But Iran also imports 40% of its refined products. And those imports keep goping up in price too, and are underwritten by huge government subsidies, to keep Iranians happy behind the wheels of their cars. Domestic gasoline prices are a fraction of actual cost at world levels.

Accordingly, Iran is dipping into reserves (fattened by high oil prices) to pay for refined imports (also driven up in price) and keep domestic prices low.

Unchanged is the strategic vulnerability of Iran to a cutoff of refined products imports.

Ed Lasky   7 23 06