Iran ‘Won’t Give In’ After 60% Decline in Crude Oil Exports

NITC-owned tanker, image: NIOC

(Bloomberg) — Iran’s oil exports have fallen 60 percent to 1 million barrels a day, the Tehran-based Shargh newspaper reported, citing comments by Oil Minister Bijan Namdar Zanganeh.

Iran, constrained by international sanctions on its energy and financial industries, “won’t give in over 1 million barrels a day,” the paper reported Zanganeh as saying yesterday at a conference in Tehran. The minister didn’t elaborate, nor did he specify dates for the 60 percent cut in the nation’s exports, according to Shargh.

U.S. and European sanctions on Iran over its nuclear program have curbed foreign investment and hindered development of the Persian Gulf state’s oil and natural gas reserves. Iran produced 2.77 million barrels a day of oil in December, down from an average of 3.58 million in 2011, data compiled by Bloomberg show. Oil exports are its main source of income.

Brent crude, a pricing benchmark for more than half of the world’s oil, tumbled 48 percent last year, the most since the 2008 financial crisis. Saudi Arabia, the biggest member in the Organization of Petroleum Exporting Countries, has rebuffed calls from Iran and others in the group to cut output amid a struggle with U.S. shale producers for market share.

Brent fell 3.3 percent to $54.56 a barrel at 1:08 p.m. on the London-based ICE Futures Europe exchange.

Predicting oil prices is impossible because “political motives and interventions are behind” the recent market collapse, Zanganeh said, without explanation, according to Shargh. He previously described the drop in crude prices as “a political plot” and said Iran would “under no conditions let go of its share of the oil market,” the ministry’s news website Shana reported on Dec. 17.

The drop in crude prices compounds the pressure Iran faces from economic sanctions. Efforts to reach a deal with the U.S. and other world powers over its nuclear work have gained Iran some relief from the restrictions, though diplomatic negotiations have been extended until July amid differences.