President Hassan Rouhani and Oil Minister Bijan Zanganeh at the opening of Phase Two of the Persian Gulf Star Refinery, Bandar Abbas, Iran, June 28, 2018
Iran’s oil production is at its lowest level since October 2014, according to the Organization of Petroleum Exporting Countries.
OPEC reported on Tuesday that Tehran’s output in January was 2.754 million barrels per day, compared to 3.818 million in May 2018 when the US withdrew from the 2015 nuclear agreement.
Iranian oil exports have fallen almost 60% since last April, from about 2.5 million bpd to about 1.1 million.
The US imposed comprehensive sanctions, including on Iran’s energy and financial sectors, on November 5. A further cut in Iran’s exports has been buffered by American sanctions waivers on eight countries — including Tehran’s largest customers China, India, Japan, and South Korea — through May.
Iran’s Parliamentary Research Center has projected a fall in GDP of 2.6% to 4.2% by March, depending on the exact level of decline in oil sales. The Central Bank said this week that the nine-month Government budget deficit through December 2018 was more than 450 trillion rials, about $10.73 billion at the official exchange rate.
The Parliamentary Research Center said on Saturday that the National Development Fund, supporting infrastructure and investment projects, may soon be exhausted because of falling oil revenues and disbursements to the military.
“We Will Rely on the Nation”
Iranian State media did not mention the OPEC report. Instead, they issued declarations of defiance and portrayed the US sanctions as hurting American allies.
Iranian Foreign Minister Mohammad Javad Zarif told a meeting in Tehran on Tuesday that all US efforts against the regime had failed since the 1979 Islamic Revolution:
The more they exert pressure on us, the more we will rely on the nation….We not only need no foreign support for security, but our progress and development stem from within the country despite foreign pressure.
After 40 yrs of wrong choices, time for @realDonaldTrump to rethink failed US policy.
— Javad Zarif (@JZarif) February 11, 2019
Press TV converted a report on oil supplies to Europe into the assertion, “The US is waging a new campaign to drive OPEC and non-OPEC oil producers out of Europe after cutting Iran and Venezuela out of the market with sanctions.”
Meanwhile, the Supreme Leader’s top aide continued the regime’s denunciation of Europe, following the collapse of a vital link for Iran’s troubled economy.
Ali Akbar Velayati told the Tehran conference, “Tyrannical and illegal sanctions and pressures of the United States, as well as Europe’s unpleasant behavior, are not acceptable for the Iranian nation.”
The European Commission launched a limited Special Purpose Vehicle for non-dollar trade in Iranian oil and other commodities and goods at the start of February.
But, after initially welcoming the launch, the Iranian regime turned against the mechanism because of “humiliating conditions” such as criticism of Iran’s missile development, activities in the Middle East, and alleged involvement in assassinations and bomb plots in Europe.