Iran's oil exports plummet as sanctions bite, agency says

Wed Jun 13, 2012 9:50am EDT
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By Dmitry Zhdannikov

LONDON (Reuters) - Iran's oil exports have fallen by an estimated 40 percent since the start of the year as Western sanctions tear into the country's vital oil industry, the International Energy Agency said on Wednesday.

The agency, which represents the interests of major consuming nations, said preliminary indications suggested exports - the lifeblood of Iran's economy - fell to 1.5 million barrels per day in April-May from 2.5 million at end 2011.

"In months ahead, Iran may need to shut in production volumes if export markets remain similarly constrained and storage fills up," the IEA said in its monthly report.

It said it believed Iran was still producing 3.3 million bpd, down from 3.5 million last year and stockpiling unsold oil.

Tehran has denied it is experiencing problems with oil sales [ID:nL5E8HCK1I] despite mounting evidence its major customers, including China, are turning down offers of cheap crude under pressure from Washington to cut trade ties. [ID:nL3E8HC39L]

On Monday the U.S. government, which aims to choke off Tehran's oil revenue and force a halt to nuclear development it believes is aimed at making weapons, said India, South Korea, Japan and Turkey have made significant cuts to oil imports from Iran.

Iran says its nuclear program is for civilian purposes.

The European Union will impose a full embargo on Iran's oil from July 1. The measure will also effectively cut off tanker insurance, a major problem for Asian buyers who traditionally account for the bulk of Iran's oil sales.   Continued...

Malta-flagged Iranian crude oil supertanker "Delvar" is seen anchored off Singapore March 1, 2012. REUTERS/Tim Chong