OPEC: Iran's Oil Production Decreased for the Second Consecutive Month

The Organization of the Petroleum Exporting Countries (OPEC) reports that Iran's oil production has consecutively decreased in June and July. Following the announcement of the U.S. withdrawal from the nuclear agreement in May, Iran's oil production has begun a 'progressive downward trend.' According to a report published on Monday, August 13, on OPEC's official website, Iran's daily oil production decreased by about 29,000 barrels in June compared to May and by 56,300 barrels in July compared to June. The report estimates Iran's daily oil production last month at 3 million and 737 thousand barrels. The daily reduction of more than 85,000 barrels in Iran's oil production over the past two months coincides with the beginning of the first round of U.S. sanctions, primarily focused on financial issues, which started last week, with three months remaining until the oil sanctions on Iran take effect. Initially, the U.S. stated that it aimed to reduce Iran's oil exports to zero, which would mean a daily reduction of 2.1 million barrels in Iran's oil production and exports. However, it later announced that it would grant exemptions for some customers if they significantly reduced their purchases of Iranian oil. Bloomberg recently reported, citing several sources within the U.S. government, that the country intends to reduce Iran's daily oil exports by one million barrels at this stage. OPEC further states that the daily oil production of the 15 member countries of the organization increased by nearly 41,000 barrels last month, reaching 32 million and 323 thousand barrels, mainly due to increased production from neighboring Arab countries like Iraq, Kuwait, and the UAE, as well as Nigeria from Africa. Saudi Arabia's production showed a decrease of nearly 53,000 barrels per day last month. In this context, Reuters reported on Monday that Saudi Arabia does not currently want to flood the market with continued production increases. Nevertheless, Saudi Arabia's daily production last month still showed an increase of 370,000 barrels compared to May. The country produced 10 million and 387 thousand barrels of oil last month and claims to have a production capacity of 12 million barrels. Venezuela's daily production has also decreased by about 870,000 barrels compared to two years ago, with a monthly decline in production. OPEC also states that the need for daily oil production from member countries of the organization next year will be 130,000 barrels less than previous forecasts. The demand for OPEC oil next year will be 32 million and 50 thousand barrels, which is less than the current production of the organization. The price of Brent crude oil dropped by 47 cents on Monday to nearly $72, down from about $75 at the beginning of this month. OPEC has predicted that global oil demand will grow by 1 million and 430 thousand barrels next year, while oil production from non-OPEC countries will increase by 2 million and 130 thousand barrels. Nearly half of this increase will come from the growth in U.S. oil production, which is expected to reach 11 million barrels per day in 2019, making it the largest oil producer in the world. The U.S. Energy Information Administration also predicted last week that despite the onset of sanctions against Iran, Brent oil prices are expected to decrease by even one dollar compared to the average price this year, reaching $71.