Iran oil production could fall by nearly 500,000 barrels per day by the end of 2012, the U.S. Energy Information Administration (EIA) said today. The reduced foreign investment in the country’s oil sector due to international sanctions is seen as the main cause of the falling production. EIA’s Short Term Energy Outlook had reported Iran’s oil production at 3.55 million bpd at the end of last year.
The forecast did not include the potential impact of recent EU and US sanctions that take full effect on 1 July.
"Iran's decline in output began to accelerate during the last quarter of 2011 and has continued. EIA believes that the acceleration reflects a lack of investment, which is needed to offset natural production declines," EIA said. "A number of foreign companies that were investing in Iran's upstream have halted their activities as a result of previous sanctions against Iran.”