CBI Presents Oil Report

CBI Presents Oil ReportCBI Presents Oil Report

At the start of President Hassan Rouhani's third year in office, the Central Bank of Iran has published a report detailing crude oil production and exports over the past two years.

According to the statistics, oil production averaged 3.61 million barrels per day during March 2011-12, while exports stood at 2.1 million bpd, Fars News Agency reported.

EU sanctions in 2012 banned the import of Iranian oil and prohibited most big oil companies from working with Iran, while American pressure forced Asian nations to reduce purchases.

Although Iran's crude production increased 3.1% to stand at 3.73 million bpd following the imposition of western sanctions against Iranian crude export in early 2012, oil exports decreased by 9.8% to 1.9 million bpd.

Oil production started to decline after the government of President Rouhani took office in Aug. 2013. Production saw a 6.7% decline, standing at 3.48 million bpd, while exports dropped 11.3% to 1.68 million bpd.

Last year (March 2014-15), production further plummeted to 3.06 million bpd, showing a 12% decline, Exports also declined 14.8% to 1.43 million bpd.

Iran’s oil reserves are the fourth largest in the world and its production capacity stands at about 4 million bpd—making it the second-biggest OPEC producer when its output is not restricted by sanctions.

In mid July this year, Iran and the five permanent members of the United Nations Security Council (Britain, China, France, Russia and the US) plus Germany reached a landmark agreement that will result in the lifting of oil-related sanctions against Iran, which in turn could increase Iran's crude oil production and exports.

Sanctions imposed by the United States and the European Union at the end of 2011 and during the summer of 2012, respectively, led to the displacement of more than 1 million bpd of Iranian crude oil on the global market, according to the US Energy Information Administration.

Iran's main buyers in Asia, Europe and elsewhere have replaced Iranian crude oil with barrels from other members of the Organization of Petroleum Exporting Countries. When oil-related sanctions are lifted, Iran will look to regain export market share, competing with other OPEC members with similar crude oil grades.

Iran can boost oil production in one week after international sanctions are lifted and OPEC’s refusal to accommodate Iran in export markets would result in lower crude prices, Oil Minister Bijan Namdar Zanganeh said earlier in August. Production can increase by 500,000 barrels a day within a week after sanctions end and by 1 million barrels a day within a month following that, Zanganeh said, adding that sanctions against Iran’s oil industry should be lifted by late November.

Iran, currently OPEC's third-largest producer, produced an average of 2.85 million bpd in July compared with 3.6 million at the end of 2011, according to estimates compiled by Bloomberg.