An overview of Iran's oil exports and tensions with the West

[New Sancai Compilation and First Release] Iran is the third largest producer in the Organization of the Petroleum Exporting Countries (OPEC), producing approximately 3 million barrels of oil per day, accounting for approximately 3% of global production.

Here are some facts about Iran's oil industry, as concerns grow that Iran's supplies could be disrupted due to extreme tensions in the Middle East and send international oil prices soaring.

Sanctions and OPEC

Iran's oil production has been the target of wave after wave of sanctions.

The United States has sought to limit Iran's oil exports since President Donald Trump withdrew from the 2015 nuclear deal between Western powers and Iran in 2018 and reimposed sanctions aimed at curbing Iran's revenues.

During Trump’s term, Iran’s oil exports slowed to a minimum.

Prices have risen during President Joe Biden's term as analysts say sanctions have been less stringently enforced, Iran has successfully circumvented sanctions and China has emerged as a major buyer, according to industry trackers.

Although Iran is a member of OPEC and OPEC+, which brings together OPEC and allies including Russia, it is exempt from the group's output restrictions aimed at supporting oil markets due to sanctions imposed on it.

Production rises

Driven by strong demand from China last year and continuing into 2024, Iran's crude oil exports averaged 1.61 million barrels per day in March, the highest level since May 2023, when exports were 1.68 million barrels per day. The highest level since 2018.

Nuclear deal and its impact

The 2018 peak reflected the easing of sanctions following the 2015 nuclear deal with Iran.

In May 2018, Iran exported 2.51 million barrels per day of crude oil. This is the highest level since 2011 when Iran's exports averaged 2.54 million barrels per day, according to OPEC data.

According to OPEC data, Iranian oil production reached an all-time high in the 1970s, peaking at 6.02 million barrels per day in 1974. This was equivalent to more than 10% of world production at the time.

Trump and Biden

Also in May 2018, the United States, under Trump's presidency, unilaterally withdrew from the 2015 agreement and reimposed sanctions aimed at cutting Iranian oil sales to zero.

Iran stopped providing oil export data, but assessments based on tanker tracking show that oil exports will fall sharply over the next two years, falling below 200,000 barrels per day in some months in 2020, the first time since at least 1980, according to OPEC data the lowest level.

At the end of 2020, Joe Biden won the US presidential election.

From January to March 2021, China increased Iranian oil imports to nearly 800,000 barrels per day in January and nearly 1 million barrels per day in March, although imports fell again in April of that year.

In 2021, Iran and the United States began indirect negotiations aimed at bringing the two countries back into full compliance with the 2015 nuclear agreement. Iran's exports will increase in 2022, with exports exceeding 1 million barrels per day by the end of the year.

Analysts said the increase in exports appeared to be driven in part by Iran's success in evading U.S. sanctions.

Analysts say Iran has been evading sanctions for years through ship-to-ship transfers and "spoofing" - manipulating GPS transponders to make ships appear in different locations - and that the country is getting more sophisticated in such tactics. The better come.

Analysts also said the export growth appeared to be the result of U.S. discretion in enforcing sanctions.

A spokesperson for the U.S. State Department said that the Biden administration has not yet lifted any sanctions on Iran and continues to increase pressure on Iran.

(Compiled by: Wang Jimin)

(Editor: Jiang Qiming)

(Source of the article: Compiled and published by New Sancai)