OPEC Report: Iran's Oil Production Reaches Highest Level Since Sanctions

The Organization of the Petroleum Exporting Countries (OPEC) in its latest monthly report states that Iran's oil production in January of this year reached its highest level since August 2012. The United States and the European Union imposed a series of sanctions against Iran in July 2012, which severely reduced the country's oil production. Just one month after the sanctions were imposed, Iran's oil production in August 2012 faced a decrease of 137,000 barrels, dropping to 2.817 million barrels per day. This figure reached 2.837 million barrels last year. Iran produced up to 3.7 million barrels of oil daily in 2011. Now, OPEC in its latest monthly report published on Wednesday, February 10, states that Iran produced 2.925 million barrels of oil per day in January, which is 38,000 barrels more than the previous month. Iran and six world powers implemented a nuclear agreement last month, which led to the lifting of oil sanctions against Iran. The Iranian Oil Minister recently stated that agreements have been made with Total of France, Eni, and Saras of Italy to soon receive 300,000 barrels of Iranian oil daily. OPEC writes in its report that OPEC's oil production increased by 131,000 barrels per day last month, reaching 32.335 million barrels. Meanwhile, OPEC has predicted that global demand for OPEC oil this year will be 31.6 million barrels, indicating an increase of 1.8 million barrels compared to last year. Thus, OPEC member countries are currently producing over 700,000 barrels of oil per day in excess of demand. The increase in surplus oil in the market has caused the price of the OPEC oil basket to drop from $108 in the first half of 2014 to less than $27 in January. Meanwhile, the price of Iran's heavy oil, which is part of the OPEC oil basket, decreased by $7.66 compared to the previous month, reaching $24.07. OPEC states that the expectation for the return of Iranian oil to global markets was a major factor in the significant drop in oil prices last month. The report states that the resumption of Iranian oil exports to Europe will put pressure on Russia in the EU market. The report adds that last year, oil demand growth was about 1.54 million barrels, but this year it will be 1.25 million barrels. In other words, the pace of global oil demand growth has slowed down in 2016. For this year, global oil demand is expected to be 94.21 million barrels per day. Oil production from non-OPEC countries is also expected to decrease by about 700,000 barrels per day in 2016. In this context, Iran is seeking to receive euros for its oil sales and debts, with Iranian oil sales to Europe exceeding 300,000 barrels. The International Energy Agency reported that the increase in Iranian oil production coincides with the implementation of the nuclear deal. Saudi Arabia and Bahrain are preventing Iranian ships from entering their waters.