5 Jul

Iran’s Crude Oil Exports and Production: Crucial for Oil Prices

WRITTEN BY Gordon Kristopher

Iran’s crude oil production

Iran is the third-largest crude oil producer among OPEC members. A Reuters survey shows that Iran’s crude oil production rose by 10,000 bpd (barrels per day) to 3.8 MMbpd (million barrels per day) in June 2017—compared May 2017.

Production is at a seven-year high. Production rose after the US lifted sanctions on Iran in January 2016. Iran was allowed a small production increase during the production cut deal.

High production from Iran could pressure crude oil (IXC) (IYE) (ERY) prices. Moves in crude oil prices impact on oil and gas producers like ConocoPhillips (COP), Stone Energy (SGY), ExxonMobil (XOM), and Sanchez Energy (SN).

Iran’s Crude Oil Exports and Production: Crucial for Oil Prices

Iran’s crude oil exports 

Iran’s crude oil exports are expected to fall 7% in July 2017, according to Reuters. Exports are expected to fall to 1.86 MMbpd in July 2017. Exports are expected to fall due to a decline in exports to Europe. However, crude oil exports are 2% higher than the same period in 2016.

Iran plans to export 1.28 MMbpd and 0.58 MMbpd of crude oil in July 2017 to Asia and Europe. In Asia, China, India, Japan, and South Korea are major importers of Iranian crude oil.

Iran’s crude oil production plans

Iran’s oil minister estimates that the country’s production will hit 4 MMbpd by 1Q18. It also plans to ramp up production by 700,000 bpd to 4.7 MMbpd by 2021. Production averaged 3.5 MMbpd and 2.8 MMbpd in 2016 and 2015, respectively. The expectation of a rise in production from Iran could pressure crude oil (FXN) (FENY) prices.

In the next part, we’ll discuss some crude oil price forecasts.

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