Bloomberg News

Iran Sees Oil Exports Falling 20%-30% As Sanctions Start

June 26, 2012

Iran’s oil exports may “gradually” decline by 20 percent to 30 percent after sanctions start next week amid field maintenance work, according to Deputy Oil Minister Ahmad Ghalebani.

Iran is planning to carry out field workovers and reservoir maintenance on oil fields just as the European Union sanctions begin, Ghalebani told reporters today at an energy conference in Moscow. Imports by China, India, Korea and South Africa may drop in the “short term,” although the countries will need Iranian energy to feed growing demand, said Ghalebani, who is also head of National Iranian Oil Co.

An EU embargo aimed at derailing Iran’s nuclear enrichment program will come into effect July 1 after talks with the Persian Gulf state failed to reach a breakthrough.

While Ghalebani said field maintenance was the reason for the drop in exports, he also said, that “maybe, yes,” the work is timed to coincide with sanctions. He didn’t say what the country’s rate of exports or production was.

Iran’s May crude production rate was 3.14 million barrels a day, according to the OPEC secretariat’s secondary sources, and 3.76 million barrels a day according to a direct communication from Iran’s government, the Organization of Petroleum Exporting Countries said in its latest monthly report on June 12.

Earlier today, the Tehran-based newspaper Shargh said Iran would welcome payments for its oil in Chinese yuan, citing an interview with Iranian Oil Minister Rostam Qasemi. The country typically is paid for oil shipments in U.S. dollars.

To contact the reporter on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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