Sanctions Brought Down Oil Production in Iran

Iranian oil industry experienced a full-fledged collapse in November after the United States restored sanctions against the Islamic Republic.

Within a month, Iran lost 11% of oil production,  379,000 barrels per day, and compared with August, production fell by 24% to 2,954 million barrels per day, the lowest since 2014.

Although the United States presented a “transitional period” to Iran’s key customers, allowing China, India, Japan and South Korea to continue limited purchases until the end of April, Tehran lost 900,000 barrels of daily production for the year and almost gave way to the top 3 OPEC producers Kuwait in November, produced 2.809 million barrels per day.

However, the market lack of Iranian oil almost did not notice, follows from the report of OPEC, published on Wednesday.

Fallen in volume fully compensated for Saudi Arabia. Production in the kingdom jumped by 380 thousand barrels per day and by the end of November reached the historical record of 11.01 million barrels per day.

Next year, the world market is ready to reduce Iranian supplies by 1.1 million barrels daily – as much as OPEC estimates, the demand for cartel oil will fall due to the explosive growth of shale oil production in the United States.

Shaking 32.965 million barrels a day, OPEC is already forcing the market to choke up in excess amounts: 22 million barrels of storage remained in a month, which could not find buyers.

If production remains unchanged, next year oil supply will exceed demand by 1.5 million barrels per day, follows from the OPEC forecast. Every week, 5-6 supertankers will remain “redundant”, and the market imbalance will be a record since 2015.

Hülya Karahan: The Founder