It's been said that every cloud has a silver lining. It may be true, because the high oil prices could well bring down Iranian President Mahmoud Ahmadinejad.

There are no technological or geographic reasons why Iran should not be producing two or even three times the amount of oil that it currently is -- roughly 4 million barrels per day (bpd), of which 2.5 million bpd is exported. There really are only two reasons for the sad state of Iran's oil industry: poor management and risk.

The poor management in part has its roots in the simple fact that -- as with most state-owned oil complexes -- profit is only one among many goals, and one that is often trumped by the need to maintain the absolute central control of the state. That said, the poor management manifests as everything from simple corruption to an investment regime that discourages foreign participation. Iran's buy-back method for reimbursing investors, for example, prevents them from reliably estimating costs or profits.

As to risk, Iran's geopolitical ambitions have placed it at loggerheads with the United States, and Washington has succeeded in making others skittish about investing into the Iranian oil patch. Some investment still occurs, of course, but not in the shadow of volumes that occur in places with easier operating environments -- like Angola or Nigeria.

Taken together, these factors make even China -- for whom making money on investments is a concern secondary to simply getting access to energy -- sufficiently suspicious of Iranian investment laws and sufficiently concerned with American countermeasures to do little more than stick its toes in the Iranian pond.

The result is an Iranian oil sector that lumbers along, with most of its efforts dedicated to keeping output from falling. For any country, such a state of affairs would be problematic, but higher energy prices ought to grant some relief. After all, higher prices mean more income, and more income means more resources with which to fix the system.

But not for Iran. In fact, Iran has four factors that actually make higher energy prices a regime-crippling development.

First, Iran is not the oil state that most people think it is. Yes, it is the world's fifth-largest exporter, but that places it just barely ahead of Kuwait and just behind the United Arab Emirates -- two states which combined have less than one-tenth the population Iran does. Simply put, Iran might be a large exporter in absolute terms, but its large population means that its oil income does not go far. Unlike its lightly-populated Arab neighbors in the Persian Gulf, Iran not only has no massive sovereign wealth fund, it is also a very poor country whose per-capita gross domestic product is roughly 40 percent that of Mexico.

Second, most net oil exporters -- and Iran is no exception -- maintain lavish energy subsidies for domestic consumption in order to keep the population quiescent. But Iran's energy sector problems extend beyond simple production and into the refining sector. Despite being the world's fifth-largest oil exporter, Iran is also the world's second-largest gasoline importer, taking in roughly 40 percent of its annual demand. Maintaining the level of subsidies necessary to keep its population happy -- and having to pay top dollar for the gasoline supplies on the international market -- eats deeply into the high oil price windfall.

With these two factors combined, it is not so much that Iran does not benefit from rising oil prices, but that its level of benefit is extremely low. And its refining problems mean that it is suffering from many of the same negatives as most states who are oil importers. And this is just the start.

Third, Iran's foreign policy is not formatted for a world of rising oil prices, and this stretches far beyond the opportunity cost of not focusing on oil production. Iran's national power for the past several years has been based on its links to Shiite co-religionists throughout the region, particularly in Iraq and Lebanon. Using militias in these areas -- most famously Iraq's Badr Brigades and Medhi Army and Lebanon's Hezbollah -- Iran is able to leverage its national power and severely disrupt its rivals' plans to the point that Tehran can negotiate with the United States as a peer.

This is all well and good so long as someone cannot pay others to contain -- if not directly buy off -- Tehran's allies. For example, Iran’s partnership with Syria is critical to Iran’s involvement with Hezbollah, and if Damascus is anything, it is aware of its own bottom line (much of its logic for remaining involved in Lebanon is financial). In such battles of influence guns are useful, but money -- especially vast amounts -- is becoming more so. And right now Iran does not have a whole lot. In contrast, Iran's leading regional competitors -- the rich Arab states across the Gulf -- do.

Finally, there is the intersection of money and power.

Westerners regularly opine about the effects that multinational corporations have on American foreign policy, and not all of the conspiracy theories are theories. But the same logic applies to other states whenever the personal interests of the ruling class interact with national interest.

Unlike Sunni religious leaders, Shiite clerics have far more influence because Shiism commits the common man to follow a specific marjiya, or source of emulation. The idea is that the common man does not know much about religion, and therefore needs to follow a cleric who can set an example of how to be a good person and successful in all aspects of life. One effect is mass personal adulation of clerics such as the late Ayatollah Khomeini; another is the evolution of the Shiite clergy from being purely spiritual guides to also being businessmen -- complete with financial institutions. Iranian Assembly of Experts chairman Ali Akbar Hashemi Rafsanjani is a good example of such a cleric.

Marry the third and fourth factors together, and Iran has a break point not too far off in its future. Consider this:

Not only is Iran's foreign policy based on a strategy that cannot easily counter suitcases of cash, but Iran needs more money, and that can only come from more oil exports.
Iran's foreign policy requires a high level of hostility to the United States. That prevents large-scale investment into the Iranian oil industry, hamstringing oil exports.

Something has to give, and until it does not only is Iran missing the oil boat, but also its Arab rivals are becoming rich beyond comprehension.

Here is where things get personal. Ahmadinejad is Iran's foreign policy front man, both in terms of backing Shiite militias and of maintaining as bellicose a line as possible versus the United States. Put another way, Ahmadinejad is the point man for the old foreign policy paradigm -- the one that is losing ground to Arab petrodollars -- as well as the one the clerical class identifies as being partly responsible for foreigners' reluctance to invest in Iranian oil.

While Iran was clearly the rising Middle Eastern power for most of the past decade, that rise occurred on the basis of Iran's religious links to other parts of the Middle East. That lever -- while obviously still important -- is being dwarfed in power and versatility by the massive increase in the price of oil. The same strategies that maximize state power when used in concert with ethnic links minimize state power in a world of high energy prices. In Iran's case, national economic power and the personal wealth of the ruling class are one and the same. And in the eyes of that ruling class, Ahmadinejad is the personality most representative of the problems constraining both.

Ahmadinejad's ideological foes in the clerical establishment have recently experienced a massive increase in their political clout via Rafsanjani's rising power and their victory over Ahmadinejad’s allies in the March parliamentary elections. So, what happens when this rising political force begins to identify the personality most associated with the old strategies as the dominant obstacle to both enlarging national power and their personal bottom lines?