Iran’s crude oil production  

A Reuters survey estimated that Iran’s crude oil production rose by 10,000 bpd (barrels per day) to 3,630,000 bpd in September 2016—compared to August 2016. 

Iran’s crude oil production averaged 2.84 MMbpd (million barrels per day) in 2015. It averaged 3.5 MMbpd in 2Q16. Iran was able to increase production after the US lifted the sanctions on the country.

Iran’s Crude Oil Production Could Impact the Crude Oil Market

Iran’s crude oil exports  

A Reuters survey estimated that Iran exported 2.8 MMbpd of crude oil and condensate in September 2016—the highest since 2011. Iran’s crude oil exports rose due to a rise in imports from India, South Korea, Japan, and Europe. Iran exported 2.2 MMbpd of crude oil in September 2016.

Iran’s crude oil production strategy  

National Iranian Oil Company reported that Iran’s targeting production of 4 MMbpd by the end of 2016 or early 2017. Many analysts think that Iran isn’t investing heavily to increase its crude oil production.

For more on crude oil prices and oil producers’ meeting, read Part 1 and Part 2 of this series. Read What Will Happen if the Oil Producer Meeting Succeeds? to learn more. 

Impact  

Any rise in crude oil production from Iran will delay the rebalancing of the crude oil market. For more, read Stumbling Blocks for Crude Oil: Is a Market Rebalance Delayed?

Lower crude oil prices will have a negative impact on oil producers such as Warren Resources (WRES) and Bonanza Creek Energy (BCEI).

Uncertainty in crude oil prices also impacts ETFs and ETNs such as the ProShares UltraShort Bloomberg Crude Oil (SCO), the Fidelity MSCI Energy (FENY), the PowerShares DWA Energy Momentum ETF (PXI), the Direxion Daily Energy Bear 3x (ERY), the VelocityShares 3x Long Crude Oil ETN (UWTI), and the United States Brent Oil ETF (BNO).

In the next part of this series, we’ll take a look at the monthly US crude oil production.

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