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Iran Oil Output Falls To 40-year Low In 2020

Iran’s crude oil production fell to the lowest in 40 years, according to an updated analysis by the U.S. Energy Information Administration.

At less than 2 million bpd, the EIA said, the country’s oil output was affected by both the pandemic, which decimated demand for oil, and U.S. sanctions targeting specifically the Iranian oil industry.

Before the U.S. withdrawal from the Iran nuclear deal and the snap-back of sanctions, Iran was pumping around 2.6 million barrels daily and exporting some 2.5 million bpd, the EIA also said.

Still, at less than a million bpd, the decline in production is a far cry from the Trump administration’s target of bringing Iran’s oil output and exports to zero to force Tehran to return to the nuclear negotiating table.

Speaking of the nuclear negotiations, a report by the Financial Times from earlier today suggested that not all hope was lost for a deal. Citing Iranian sources, the daily reported that Tehran’s new top diplomat, despite being a hardliner and openly distrustful of the West, could end up clinching the deal his predecessor couldn’t.

“Under Amirabdollahian, we will not see more radicalism, rather more co-ordination between the diplomatic and military fields,” once source told the FT.

“You no longer have the kind of friction between the government and the deep states that proved to be a serious impediment for his predecessor’s initiatives,” explained another.

Tehran also named the new oil minister this week: Javad Owji, a former deputy to outgoing Bijan Zanganeh and a senior executive in state-owned energy firms. As Zanganeh said last month, his successor’s main job would be to boost oil exports.

The outgoing minister said recently that Iran had lost some $120 billion in oil revenues from U.S. sanctions, taking an export hit of 2 billion barrels since the United States withdrew from the nuclear deal.

By Irina Slav for Oilprice.com

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  • Mamdouh Salameh on August 13 2021 said:
    How could this be true when Iran has been exporting 1.5 million barrels a day (mbd) or 71% of pre-sanction exports 1.0 mbd of which going to China and consuming on average 1.82 mbd? Iran’s production even under the sanctions must be around 3.322 mbd. Moreover, Iran has been exporting increasing volumes of refined products.

    In giving such unsubstantiated production figure, the U.S. Energy Information Administration (EIA) is trying to give the impression that US sanctions have crippled Iran’s oil production and exports when in fact they have failed miserably. It is also trying to mask the fact that the United States was unable to stop China defying the sanctions and continuing to import Iranian crude in increasing volumes.

    A lifting of US sanctions against Iran won’t see the light of day soon or ever. The reason is that the positions of Iran and the United States are irreconcilable.

    Without the United States agreeing first to lift the sanctions, Iran won’t even negotiate with the Biden administration. On the other hand, the United States won’t lift the sanctions without Iran agreeing to renegotiate the nuclear deal and therein lies the problem.

    From the United States’ point of view and its allies’, renegotiating the deal means Iran’s relinquishing its nuclear and ballistic missile development programmes which Iran will never do.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • George Doolittle on August 13 2021 said:
    It's possible with the revolution in "horizontal drilling" that the KSA could start draining the bulk of Persian Oil absolutely.

    Still need to market and sell the product tho!

    If there are no buyers as the US Dollar become worthless then all the oil simply can't be used for anything.

    Maybe if there was a Railroad out that way commerce would make sense but for now with the entire US Airline Industry on the brink indeed Global Airline Industry on the brink...

    No good for the time being starting, well...about 6 Months ago.

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