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Page added on January 7, 2013
Iran oil exports plunge 40% in 9 months
Oil minister reverses previous denials of any decline
Iran’s oil exports have been slashed 40 per cent in the past nine months because of tough Western sanctions, Oil Minister Rostam Qasemi was quoted as saying on Monday, in a reversal of his previous denials of any decline at all.
“There has been a 40 per cent decrease in oil sales and a 45 per cent decrease in repatriating oil money,” Qasemi told the Iranian parliament’s budget commission, according to the ISNA news agency citing MPs.
The minister said the final figures for the current Iranian calendar year, which ends in March 2013, would see “a significant decrease” in crude export revenues, but he did not provide any numbers.
The admission by Qasemi was significant, given that he was one of the officials who up to now had been most adamant in claiming that Iran’s crucial oil exports were entirely unaffected by draconian US and EU sanctions.
Those assertions have crumbled in recent months, with other Iranian officials acknowledging that the sanctions were hurting the economy.
Economy Minister Shamseddine Hosseini for instance last month admitted that oil revenues had plunged 50 per cent because of the Western embargo, which took effect in July 2012.
According to the Organisation of Petroleum Exporting Countries (Opec) and the International Energy Agency (IEA), Iranian crude exports have fallen from around 2.4 million barrels per day (mbpd) in late 2011 to around 1.0 mbpd by the end of 2012.
The overall amount Iran is pumping out of its oil fields is estimated to have fallen by some 25 per cent to 3.0 mbpd — its lowest level since the Iran-Iraq war in the 1980s.
Iran, once the second-biggest crude exporter in Opec after Saudi Arabia, has now slipped to fourth place, as sales drop behind those of Iraq and Kuwait, according to the cartel’s figures.
The sharp decline is undermining Iran’s finances. In 2011, the Islamic republic relied on the $100 billion brought in by oil exports to cover 60 per cent of the budget.
This year will see much less money to spend, several Iranian lawmakers and government officials have hinted.
“It is expected that oil exports will be 1.5 mbpd” in the next Iranian calendar year starting in March, Qasemi said, according to remarks relayed to Isna by budget commission spokesman Gholam Reza Kateb.
The export plunge, and US sanctions restricting Iran’s ability to use international banking transactions to repatriate oil revenues, is costing the country around $5 billion per month, according to experts.
Despite the climbing evidence of hardship, Iran is sticking to what its supreme leader, Ayatollah Ali Khamenei, has called a “resistance economy”, aiming for greater self-reliance and belt-tightening.
President Mahmoud Ahmadinejad said late December that “we should be able to administer the country without reliance on oil revenues.”
His policies, though, have been blasted by hardline lawmakers for mismanaging the economy and worsening the situation.
The international sanctions targeting Iran aim to choke the country’s revenues used for its disputed nuclear programme, and to force it to the negotiating table.
4 Comments on "Iran oil exports plunge 40% in 9 months"
MrEnergyCzar on Mon, 7th Jan 2013 9:39 pm
How could he deny a decline in the first place? Reminds me of when Iraq was being taken over, one of the Iraqi leaders was on the news saying they were still in control with U.S. tanks and troops in the background…
MrEnergyCzar
BillT on Tue, 8th Jan 2013 2:23 am
Funny, Iran has, on several occasions, offered to work out deals with their uranium process, but the US(Israel) has blocked every one. The Us(Israel) wants war with Iran, but the Us sees that it could take down all of the West in the process. Iran has every right to have nuclear power and, until there is real proof they are making bombs, they are not outside the law, as is Israel. Israel is the enemy of the West, not Iran.
James on Tue, 8th Jan 2013 3:02 am
I was under the impression that China, India, and several other countries were buying enough Iranian oil which would buoy up their economy. The U.S. and Europe couldn’t buy up the other 40% and still reduce imports. Remember, the U.S. is supposedly going to become an exporter of oil soon. So, how would we have an affect on their oil sales? The U.S. should not be telling other countries who they can buy their oil from.
DC on Tue, 8th Jan 2013 8:01 am
While US economic warfare, err ‘sanctions’ have no doubt caused some drops, 40% sounds like a stretch. Nor do I see Iran admitting such a thing, even if it were proven true to the outside world. The story of a 40% could well be US propaganda.