ABSTRACT
The extraordinary advantage of oil for the Iranian economy-apart from its deposit volume and rising price-is that its extraction cost is low and its sale proceeds contain huge profits. And with continued discoveries of new oil fields, its current reserves have always exceeded domestic consumption and exports. Even without substantial new oil discoveries, Iran's deposits at the current rate of consumption are projected to last for another 70 years. Oil wealth has not only been the mainstay of the Iranian economy, but also the principal source of its economic, technological, and socio-cultural development. While the oil industry, as such, has by no means the largest share of national product, it is the largest source of the government budget and the main engine of Iran's economic growth. Politics and governance have been the second victim of the oil curse. The socio-psychological curse of the oil windfall is the creation of a petroculture that turns hard work into sweet dreams.
