Iran eyes only 1.4 mbpd of oil exports

Iran's crude oil exports have decreased from 2.2 million barrels per day (mbpd) in 2011 to less than 1 mbpd currently. According to the statistics of the Iran's Customs Administration, the country's condensates exports have plunged significantly as well.

Iran's Oil Minister Bijan Namdar Zanganeh said on October 27 that the country's crude oil incomes would reach $54.5 billion annually if the US-led sanctions over Iran's oil export are eliminated. While the oil price stands at about $107 per barrel, the targeted oil export income figure equals to the value of selling 1.4 mbpd.

Later in September, member of Iranian Parliament Planning and Budget Commission Hossein Ali Haji Deligani said that Iran's oil and condensate revenues were around $23 billions during the first six months of the current solar year (started on March 21). He went on to note that, the country's crude oil and condensates exports currently stand at 1.209 mbpd, citing on a report submitted by Zanganeh to the Commission.

According to Iran's Customs Administration's statistics, the country has exported about $3.385 billion worth of condensates during the first six months of the current solar year (approximately some 200,000 bpd).

On the other hand, Iran's crude oil exports during the first half of solar year were below $20 billion. If it continues at the same rate, the country's total annual oil exports` value will roughly reach $40 billion at the end of the current Iranian calendar year (March 21, 2014), $14 billion less than Zanganeh's forecast.

According to Iran's Customs Administration's report, Iran exported about $10 billion worth of condensates during the calendar year of 1390 (ended on March 20, 2012), before the West's sanctions over Iran's banking system and oil exports.
Iranian Press TV quoted Zanganeh as saying On October 27, that when the sanctions are removed, Iran's oil export revenues will hit $54.5 billion per year, of which $14 billion will be allocated to filling the country's annual budgetary gaps.

Iran's current year's budget has been set based on revenues from 1.3 mbpd crude oil export ($95 per barrel).
While the average price of oil stood at about $107 per barrel during the current solar year, Iran's declined oil exports to about one mbpd, partly will be compensated, but Iran's economy extremely hungry for more oil exports.

Why Iran targets $54.4 billion of revenues?

Iranian Oil Minister's $54.4 billion worth crude oil export target may be due to several reasons including Iran's decreased oil production capacity, losing traditional oil markets as well as having no opportunity to export oil to EU in short term.

The EU shared about 18 percent of Iran's total 2.2 mbpd crude oil exports till late 2011.
According to the OPEC`s statistics, Iran's oil production volume in 2011 stood at 3.628 mbpd, but decreased to around some 2.7 mbpd in 2013.

While Iran's refinery capacity is 1.68 mbpd and its exports stood at some one million barrels per day, the country had to shut down some fields' wells and keep crude oil output around 2.7 mbpd during first three quarters of the current year.
After 104 years since the discovery of oil in Iran, some 80 percent of Iran's oil fields are in their second half life and according to the U.S. Energy Information Administration (EIA), Iranian old oil fields face 7 to 12 percent drop in productivity on an annual basis. On the other hand, Iran's domestic oil consumption increases 7 percent every year.

Iran's real oil production volume can hit 800,000 barrels per day during a three-month period by re-opening closed wells and increasing production, though it can never meet the production figure of 2011.
Dropped down pressure in old oil fields, and insufficient investment in oil projects, as well as very little gas injection into oil fields to increase the fields' productivity, lead to serious doubts about Iran's real oil production capacity.
About 180 million cubic meters of gas should be injected into Iranian old oil fields each day, while according to EIA, Iran has injected about 12.6 percent of its produced gross gas into oil wells, which was some 77.5 million cubic meters per day.

Iranian officials claim that during warm seasons some 90 million cubic meters of gas get injected into oil wells daily, but they have to decrease the gas injection in winter due to gas shortage.
It seems Iran hopes to regain its traditional Asian oil markets, which totally may absorb 1.4 mbpd of Iran's oil exports- equal to the pre-sanctions volume.

According to the International Energy Agency (IEA), energy markets` demand to OPEC oil will be limited over the next five years, and the global oil demand mainly will be supplied by non-OPEC countries.

For the being time, OPEC produces more than world's demand. OPEC has over-supplied averagely some 400,000 barrels of crude oil per day during current year, while according to the IEA, the global demand for OPEC members' oil would dropped by 200,000 barrels per day next year.


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