Energy Security & The Economy of Iran

Energy as one of the most important factors of production has significant effects on macroeconomic variables. As a result energy security is a vital issue to all industrial and energy consumer countries in the world. Energy security definition has changed through time and now in addition to supply it includes the demand side too. As a result of an increase in availability of energy or decrease in its price firms will be encouraged to increase their output. The factors that make fast and shocking swings of energy prices - especially oil- sometimes are due to unpredictable events such as wars or recent economic crisis in different countries of the world. Present conditions of worldʹs economy and financial economic crisis caused tremendous volatility and therefore insecurity in oil price and other energy carriers which in turn makes oil incomes of exporting countries like Iran to be extremely vulnerable. JEL Classification: Q32,Q48,Q49,Q43