High oil prices seen fueling Iran's nuke program

TEL AVIV -- Intelligence officials here project Iran will exploit the current sharp rise in oil prices to accelerate its medium- and long-range missile and nuclear weapons programs, Middle East Newsline reports.

Israeli government sources as well as other Western analysts say the billions of dollars in higher oil revenues over the last year appear to have solved Teheran's financial problems with its suppliers in Moscow, Beijing and Pyongyang.

China, North Korea and Russia are regarded as the leading contractors in Iran's strategic weapons programs.

The sources said the increased revenues will also make it easier for Iran to buy advanced Western technology, either on the black market or via dual use products.

Such an analysis was presented by Israel's military intelligence and the Foreign Ministry to Cabinet ministers and other senior officials. The reports demonstrated a link between higher oil revenues and Iran's successes in exporting Islamic insurgency, the Haaretz daily reported on Monday.

Last month, Israeli and U.S. intelligence sources reported that Russia has begun supplying Iran with nuclear weapons technology. This included the means to enrich uranium for nuclear bombs.

Israeli sources said the sharp and sustained rise in oil prices dashed assessments of only six months ago that OPEC would be incapable of maintaining a ceiling on oil production output. Israeli defense assessments asserted that the failure to maintain high oil prices would stop Arab regimes from buying advanced weapons.

Still, Israeli analysts don't expect OPEC to achieve the same control over market as in the 1970s.

Despite the high oil prices, many oil-producing countries still have large deficits. Kuwait, for example, is projecting a $5 billion deficit in fiscal 2001. The government estimate is based on the sale of oil at $13 a barrel. The price of oil is above $30 a barrel.