As Iran struggles to maintain its economy amid internal problems and expanding US sanctions, its oil exports have reportedly fallen by almost 25% this summer.
Following a 2015 nuclear agreement with the 5+1 Powers (US, UK, Russia, China, France, and Germany), Iran had steadily increased its exports to 2.5 million barrels per day. But in May, Donald Trump announced US withdrawal from the deal and said comprensive sanctions — including on the energy and financial sectors — will be imposed from November 5.
Tehran’s exports soon dipped to 2.1 million bpd, and Bank of America Merrill Lynch reported a further decline on Monday.
In a note to clients, the analysts said export loading have falled by 580,000 barrels per day in the past three months.
“We believe that the full effect of the Iranian oil sanctions has yet to be seen,” the note said.
The report bore out the projections of analysts that, when the full force of US sanctions is felt, Iran’s exports could drop to about 1.5 million bpd. The fall would deal a heavy blow to Government revenues, at a time when the Islamic Republic is under pressure over production, investment, employmnet, and a weakening currency.
Iranian officials have betrayed their concern as they put out conflicting messages. Some have said that the reduction of Tehran’s oil on markets will lead to price spikes.
However, on Sunday Iran’s OPEC governor Hossein Kazempour Ardebili warned of collapsing prices as he lashed out at both OPEC and non-OPEC member Russia for increasing output to cover any gap in Iranian exports.