OPEC published its latest monthly oil market report on July 11. Anyone reading it might expect to find some mention of the fact that one of its members, Iran, is now under two sets of sanctions which threaten not only its oil exports but also, ultimately, the volume of crude it produces.Nor was there mention of new US sanctions which came into force on June 28 and which threaten to bar from the US financial system banks of countries continuing to to do oil-related business with Iran's central bank -- unless they reduce their oil volumes from Iran significantly. Washington has already given 180-day waivers from the sanctions to Tehran's top Asian importers for having pledged or shown evidence of lower purchases of Iranian oil. These countries include Japan, India, South Korea and China.
But there was no mention of the European Union ban on the import of Iranian oil which came into full force on July 1 and which directly affects some 500,000 b/d, or of the EU ban on provision of insurance for shipments of Iranian oil, which reaches far beyond Europe.
So for any assessment of the impact of sanctions on Iranian oil production and exports we have to look elsewhere.
The US Energy Information Administration said in its latest Short-Term Energy Outlook on July 10 that it expected Iranian crude oil production to fall by 1 million b/d by the end of this year from about 3.6 million b/d at the end of 2011, and to drop by a further 200,000 b/d next year....MORE