Sanction Slashes Iran’s Oil Export 40%
By Countercurrents.org
08 January, 2013
Countercurrents.org
Sanctions against Iran have started taking its toll. The country’s crude oil export has dropped.
A report [1] by Ladane Nasseri and Yeganeh Salehi said:
Iran’s crude oil shipments plunged 40 percent in the last nine months, state-run Iranian Students News Agency reported, in a rare acknowledgment that international sanctions are crimping the country’s most lucrative export.
Iran will export an estimated 1.5 million barrels a day in the Iranian year starting March 21, said Gholamreza Kateb, a spokesman for the parliamentary planning and budget committee, according to ISNA. Kateb, who didn’t provide comparable sales data for the current Iranian year, based his comments on a report Oil Minister Rostam Qasemi presented to the nation’s parliament, the agency reported today.
Revenue from sales of oil and natural gas condensates has fallen by 45 percent and faces a “considerable decrease” by March 20, Kateb said, according to ISNA.
Iran’s oil exports have dwindled as the US and European Union tighten sanctions on the Islamic republic’s energy and banking industries in an effort to deter its nuclear program. Iranian authorities and state-run media have typically played down the impact of sanctions on crude sales.
Formerly the second-biggest producer in the 12-member Organization of Petroleum Exporting Countries, Iran has slipped to fifth place behind Saudi Arabia, Iraq, Venezuela and Kuwait, according to data compiled by Bloomberg. It pumped 2.66 million barrels a day in December, 40,000 barrels a day less than in November, the data show.
The International Energy Agency, which advises the world’s biggest industrialized economies, said last month that Iranian oil exports will slump to 1 million barrels a day this month as European and Asian nations cut purchases to gain exemptions from US sanctions. The EU banned imports of Iranian crude in July.
China, the biggest importer of Iranian crude, reduced shipments by more than 20 percent in the first 11 months of 2012, the Paris-based IEA said.
Iran faces additional penalties starting in February that will prohibit the repatriation of export earnings, according to the agency.
An AFP report carried by Business Insider [2] on Jan 7, 2013 said:
Iran's oil exports have been slashed 40 percent in the past nine months because of tough Western sanctions, Oil Minister Rostam Qasemi was quoted as saying in a reversal of his previous denials of any decline at all.
"There has been a 40 percent decrease in oil sales and a 45 percent decrease in repatriating oil money," Qasemi told the Iranian parliament's budget commission, according to the ISNA news agency citing MPs.
The minister said the final figures for the current Iranian calendar year, which ends in March 2013, would see "a significant decrease" in crude export revenues, but he did not provide any numbers.
The admission by Qasemi was significant, given that he was one of the officials who up to now had been most adamant in claiming that Iran's crucial oil exports were entirely unaffected by draconian US and EU sanctions.
Those assertions have crumbled in recent months, with other Iranian officials acknowledging that the sanctions were hurting the economy.
Economy Minister Shamseddine Hosseini for instance last month admitted that oil revenues had plunged 50 percent because of the Western embargo, which took effect in July 2012.
According to the Organisation of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA), Iranian crude exports have fallen from around 2.4 million barrels per day (mbpd) in late 2011 to around 1.0 mbpd by the end of 2012.
The overall amount Iran is pumping out of its oil fields is estimated to have fallen by some 25 percent to 3.0 mbpd -- its lowest level since the Iran-Iraq war in the 1980s.
In 2011, the Islamic republic relied on the $100 billion brought in by oil exports to cover 60 percent of the budget.
This year will see much less money to spend, several Iranian lawmakers and government officials have hinted.
"It is expected that oil exports will be 1.5 mbpd" in the next Iranian calendar year starting in March, Qasemi said, according to remarks relayed to ISNA by budget commission spokesman Gholam Reza Kateb.
The export plunge, and US sanctions restricting Iran's ability to use international banking transactions to repatriate oil revenues, is costing the country around $5 billion per month, according to experts.
Despite the climbing evidence of hardship, Iran is sticking to what its supreme leader, Ayatollah Ali Khamenei, has called a "resistance economy", aiming for greater self-reliance and belt-tightening.
President Mahmoud Ahmadinejad said late December that "we should be able to administer the country without reliance on oil revenues."
His policies, though, have been blasted by hardline lawmakers for mismanaging the economy and worsening the situation.
The international sanctions targeting Iran aim to choke the country's revenues used for its disputed nuclear program, and to force it to the negotiating table.
Iran insists the program is for purely peaceful purposes, and denies Western and Israeli allegations that it wants to manufacture nuclear weapons. It is defiantly forging on with uranium enrichment and says it will survive the Western pressure.
Another report [3] said:
Iran’s oil exports to Asia were subsequently targeted by an EU insurance ban on Iranian oil shipping and US sanctions against Tehran's central bank.
Citing Iran’s Economist’s Intelligence Unit a report by the country’s state-owned Mehr News Agency said “nearly all of Iran’s oil exports now go to China, South Korea, Japan and India.”
The report cited a particular dependence on China, which is now estimated to purchase some 50 percent of Iran’s total oil exports.
Source:
[1] Bloomberg, “Iran Crude Oil Exports Drop 40 Percent Amid Sanctions, ISNA Says”, Jan 7, 2012, http://www.bloomberg.com/news/2013-01-07/iran-crude-oil-exports-drop-40-percent-amid-sanctions-isna-says.html
[2] “Iran Admits That Oil Sanctions Are Having A Brutal Effect”, http://www.businessinsider.com/irans-oil-exports-have-dropped-by-forty-percent-in-the-last-nine-months-2013-1
[3] RT, “Iran admits oil exports fall by 40 percent amid crippling Western sanctions”, Jan 7, 2013,
http://rt.com/news/iran-oil-exports-drop-536/
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