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Iran’s Present Is Shaky, Its Future Is Precarious

Rig

It is genuinely difficult to predict what the Iran conundrum would lead to in the end, however, the current setup appears to be a very sophisticated collision course. Quite remarkably, Tehran has not made recourse to provocations in the Hormuz Strait, despite all the previous tough talk and, it seems, would not be discomfited if a final diplomatic solution would be hammered out. The US sanctions have hurt the Iranian economy and its energy sector, yet due to the introduction of waivers to eight carefully chosen nations the impact was partially mitigated. The next calibrated blow to Iran will be designed to do even more economic harm, however, would still not be enough to bring about the oft-professed goal of US foreign policy – bringing Iranian crude export to naught.

Three full months into the sanctions period, one can surely state that Iranian production plummeted by 1mpbd within six months. By December 2018 already, crude output dropped to 2.75mbpd and has stayed around that level since. In this respect, it has to be pointed out that since October 2018 Iran has stopped informing OPEC about its current monthly production estimates, however, the OPEC data based on secondary sources has been quite accurate, thus allowing us to assess the scope of the reduction. The 1mbpd production decline did not result in Iran lacking in crude – in fact, exports have shrunk even more steeply, by some 1.5mbpd since May 2018 when the November 04 sanctions deadline was first…




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