OPEC Reports a 150,000 Barrel Reduction in Iran's Oil Production in September

According to the latest monthly report from the Organization of the Petroleum Exporting Countries (OPEC), published on Thursday, October 11, Iran's oil production in September decreased by 150,000 barrels compared to the previous month, reaching 3 million and 447 thousand barrels. Previously, the U.S. Energy Information Administration and Reuters had estimated Iran's oil production in September to be between 3 million and 400 to 3 million and 450 thousand barrels. The figure announced by OPEC indicates that Iran's oil production in September decreased by about 370,000 barrels compared to April, six months prior to the U.S. withdrawal from the JCPOA on May 8. However, the OPEC report mentions that Iranian officials have denied this level of production decline in the statistics officially provided to OPEC, only confirming a daily production decrease of 65,000 barrels. During the previous sanctions period (2012 to 2015), Iran also did not acknowledge production declines in its official statistics for several months and ultimately reported a one million barrel drop in its oil production in the statistics provided to OPEC. Besides Iran, Venezuela has also reported its oil production in official statistics to OPEC as being 20% higher than OPEC's and other international assessments. According to OPEC estimates, Venezuela's oil production has decreased by 957,000 barrels over the past two years, falling below 1.2 million barrels per day; however, Venezuela claims its oil production in September was 1.43 million barrels. Venezuela's production has been declining by about 40 to 50 thousand barrels per day for a long time. Despite the drop in production from Iran and Venezuela, OPEC's total production in September increased by 132,000 barrels per day, reaching 32 million and 761 thousand barrels. Saudi Arabia and Libya each added more than 100,000 barrels to their production last month. OPEC's statistics show that nearly all member producers of this organization have produced above their quotas in recent months, compensating for the production declines from Venezuela and Iran. Iraq, Saudi Arabia, Kuwait, Qatar, and the UAE have added a daily total of 1 million and 40 thousand barrels to their production since April, and thus, OPEC has not faced a production decline; in fact, the organization's production has increased by about 831,000 barrels compared to the month before the U.S. withdrawal from the JCPOA. Libya and some other members of this organization have also increased production during this time. On the other hand, the decrease in Iran's oil exports has occurred much more rapidly than the decrease in production. Reuters recently reported that in the first week of this month (October), Iran's oil exports reached 1.1 million barrels per day, while last year it exported an average of 2.5 million barrels of oil and gas condensates daily. The Islamic Republic of Iran has recently considered ways to prevent further declines in exports, including the National Iranian Oil Company announcing on its official website that it will offer one million barrels of oil on the energy exchange by the end of October. According to the National Iranian Oil Company's website, "Iranian private sector buyers can pay 20% of the price in rials and the rest in foreign currencies." According to this report, the rial payment will be settled in cash before the delivery of the shipment, while the foreign currency payment will be settled on credit, with a bank guarantee provided after the delivery of the shipment. Iran usually gives its foreign customers three months to pay for oil imported from Iran, but it is unclear how long the private Iranian customers, who are supposed to purchase oil shipments on the exchange and export them themselves, will have to pay. During the previous round of U.S. sanctions, the Iranian Ministry of Oil also put oil shipments up for sale on the Tehran energy exchange several times, but no buyers were found.