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Interactive Consequences between Oil Markets and Behavior of Sanctioner and Sanctioned Countries: Case of Iran

Karimi, Mohammad Sadegh | 2018

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 53518 (46)
  4. University: Sharif University of Technology
  5. Department: Energy Engineering
  6. Advisor(s): Maleki, Abbas
  7. Abstract:
  8. Sanctions are one of the most important variables influencing Iran's domestic and international decision-making and have had many effects on Iran's economy and politics in recent years. Iran's ability to influence the oil market and harm the interests of the sanctioning countries in this market raises the question of whether such a capability could affect the outcome of sanctions and lead to the withdrawal of those sanctioning countries. A theoretical examination of the issue of sanctions using game theory shows that if the sanctioned country is not able to retaliate in areas other than the disputed issue, the sanctions game may not reach an equilibrium in which the sanctions are lifted but the disputed issue is pursued. On the other hand, the possibility of a fight-back strategy creates the possibility of a lasting agreement on “the lifting of sanctions and the continuation of the disputed issue”, but does not necessarily lead to such an agreement. Examination of 12 cases of sanctions confirms this conclusion and shows that in all cases where the sanctioned country did not have the possibility of retaliation, the final result has been “the lifting of the sanctions and the cessation of the disputed issue”, but in the cases where the sanctioned country had this countermeasure possibility, only in one case (the case of Cuban sanctions), the final result is the failure of sanctions, and in other cases sanctions have been successful. In the case of Iran, it was shown that Iran's influence on the oil market is limited but significant. However, the current situation, especially the global cooperation with the United States and the consequent low costs of imposing sanctions, hampers Iran from changing the sanctions game in its favor, by taking countermeasures in the oil market. Accordingly, strengthening economic and political ties with countries in the region and other non-Western countries can change the equilibrium of the sanctions game in Iran's favor by increasing the costs of imposing sanctions
  9. Keywords:
  10. Sanction ; Game Theory ; Agent Based Modeling ; International Sanctions ; Oil Iran ; Market Condition ; Petroleum Products Market

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