Oil Production in January Hit 30-Year Low
Iran lost an estimated $40 billion in 2012 in oil export revenues, the International Energy Agency (IAE) reported today. Meanwhile, oil production in January hit a 30-year low. (Reuters, 13 February)
Iranian oil output fell to 2.65 million barrels per day in January, and the fall is likely to continue, the IEA said in its report. In 2011, before the oil sanctions, Iran produced 3.7 million bpd.
On 6 February, a new round of U.S. sanctions went into effect, barring Iran from repatriating earnings from its oil exports, depriving the country of much needed cash. The countries that buy Iranian oil will have to retain their payment for the oil and Iran will be able to use the proceeds only to buy goods in the countries where it exports its oil, effectively bartering oil for locally produced goods at those countries.
“For Iran, the latest expansion of sanctions is expected to further undermine government finances as its oil export earnings are now effectively locked into the buyers' countries,” the IEA said.
File photo: Iran’s oil export terminal at Kharq Island (Getty Images)