By Pooya Stone
Iran’s crude oil production dropped to just 2.18 million barrels a day (BPD) in March, according to the Organization of Petroleum Exporting Countries (OPEC) in its latest monthly report, released on Friday.
This is down 52,000 barrels from February and is the lowest production volume since the beginning of the Iran-Iraq war in the 1980s.
Before US sanctions on Iran snapped back into place in 2018, Iran’s daily oil production was over 3.8 million barrels and they exported 2 million barrels of crude and half a million barrels of gas condensate on a daily basis
Their crude oil exports in March, according to international data intelligence company Kpler, were 144,000 BPD.
Meanwhile, the International Monetary Fund (IMF) predicted Wednesday that Iran’s oil production would fall to 1.86 million BPD this year and 1.81 BPD next year.
Recently, OPEC and its allies agreed to cut production by 23% in May and July and by 18% in the last six months of the year in order to raise oil prices, which fell from $70 per barrel at the beginning of the year to $20 per barrel at the beginning of March. Prices did start to rise as talks of reducing production began.
This will lead to less than 19.5 million BPD on the market in May and July.
The Iranian government began to admit that the US sanctions were having the desired effect on the economy in October, with Oil Minister Bijan Zanganeh reporting that yet another company had pulled out of a 2017 deal with Iran, citing mullahs’ malign behavior in the region and their use of funds to create chaos in the region.
He said: “The Chinese Company (CNCP) has withdrawn from the 11th phase of the development of South Pars Gas field.”
The withdrawal was welcomed by the spokesperson of the US State Department Morgan Ortagus, who called it “a wise decision” and said it was “not worth exposing your assets to US sanctions”.
This followed a separate withdrawal from France’s Total after the US pulled out of the Joint Comprehensive Plan of Action (JCPOA) and will mean serious challenges for Iran’s South Pars project.
The US’s “maximum pressure” policy also saw a drop off in Turkey’s trade with Iran, with Iran’s oil and gas exports to Turkey down 43% from 2018 to 2019 and the Turkish Statistical Institute saying that almost no oil shipments were imported from Iran in June and July
Zanganeh said that US sanctions “were dealing the biggest blows” to Iran’s oil sector. Iranian officials have been using this money to fund their illicit activities.