OPEC Report Shows Widening Gap Over Iran’s Oil Output Views

An oil producers’ report Tuesday revealed a widening gap in views over how much crude oil Iran is producing, with Tehran saying output is up when experts say it is sharply declining.

The rare disclosure of sensitive Iranian oil data–made in the monthly oil-market report of the Organization of Petroleum Exporting Countries–comes amid intense scrutiny over the effect of international sanctions against the Islamic Republic.

In the OPEC report, Iran pegs its August crude-oil production at 3.7 million barrels a day, up 5% from last year and broadly stable since the beginning of the year.

But secondary sources cited by OPEC–shipping and oil-industry experts with close knowledge of the country’s production–put Iran’s output at 2.8 million barrels a day, about 1 million barrels a day lower than Iran’s estimates and 24% down compared with last year.

By contrast, Iran’s own estimates for last year are similar to unofficial numbers. Other OPEC members generally disclose numbers that are much more consistent with secondary sources.

Iran oil officials, in public statements, continue to insist that exports-which are behind any variation in production numbers-are unaffected by sanctions.

Iran’s production numbers are closely watched by Western nations, as they consider how to balance considerations over new sanctions with the need to avoid a new oil-price spike.

To fill the gap left by sanctions-hit Iranian exports, other OPEC producers have also turned on the spigots and the overall group increased output by 254,000 barrels a day in August, according to OPEC’s secondary sources.

This mounting production is in response to global oil demand growth, the estimates of which OPEC kept broadly unchanged at about 900,000 barrels a day.

The European Union and the U.S. are considering more sanctions against Iran’s energy sector, after making stronger accusations that the Islamic Republic is developing nuclear weapons–allegations Tehran denies. The West has already ratcheted up the pressure with a full ban on Iranian oil from the EU since July 1; U.S. restrictions against Tehran’s central bank have forced Asian buyers to reduce their crude imports from the Middle-Eastern nation.

But in public statements, Iranian oil officials have recently insisted oil production and exports are stable. Crude exports are “almost normal,” Iran’s OPEC representative, Mohammad Ali Khatibi, told the ISNA news agency last week.

RigZone