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Iran Oil Production Hits 10-Year Low

Oil is the lifeblood of the Iranian economy. Oil exports provide half of Iran’s government revenues and account for 80 percent of the country’s total exports, according to the Financial Times. As oil from mature fields becomes harder to extract, new technology and management techniques are needed to slow the decline in output. Fellow hydrocarbon behemoths Saudi Arabia and Venezuela have succeeded in squeezing more production from their wells, but years of U.S. sanctions have deterred the foreign investment and innovation Iran’s oil industry desperately needs.

So it’s no surprise that Iran oil production has now fallen to a ten-year low of 3.8 million barrels per day, according to estimates from the International Energy Agency (IEA). The IEA also noted that the looming European Union oil embargo (which commences this summer) could send Iranian oil production plummeting even lower, to levels not seen since the Iran-Iraq war in the 1980s.

If the EU embargo has the kind of impact it is designed to have—and the IEA report suggests it will—Tehran is going to come under enormous internal pressure to do something about it.

In his news conference with British Prime Minister David Cameron on Wednesday, President Obama reiterated his tough stance, claiming he was “determined to prevent Iran from getting a nuclear weapon” and that “the window for solving this issue diplomatically is shrinking.”

This much is clear: Iran cannot accept a status quo in which oil production continues to fall. If President Obama sticks to his belief that a nuclear Iran is unacceptable, the two countries will remain on a collision course.

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  • bill phelps

    Iran is in de facto control of the oil fields of southern Iraq and in the export of their yield. Iran will not be hurting for awhile.

  • Jacksonian Libertarian

    Better check your numbers, 33.8 million barrels a day is wrong.

    • Walter Russell Mead

      The House of Pain opens its gates to receive another intern.

  • Hoyticus

    33.8 millIon barrels a day? That would be more than a third of the Earth’s output a day, I believe you meant to put the decimal one character to the left.

  • matthew49

    33 million barrels a day can’t be right. Is the decimal point in the wrong place?

  • Mark Michael

    “So it’s no surprise that Iran oil production has now fallen to a ten-year low of 33.8 million barrels per day, according to estimates from the International Energy Agency (IEA).”

    I presume this is a typo. The EIA estimated Iran’s production at 3.65 million barrels per day for 2011. The OPEC allocation for Iran for 2011 was 3.34 million barrels/day. (A misplaced decimal point?) See:

    The world’s total oil production for 2010 was 87.5 million barrels per day. A per country breakout can be found here for 2010 (an EIA website):

    Copying the top 15 producer countries:

    1. Saudi Arabia – 10,521,000 barrels/day
    2. Russia – 10,146,000 barrels/day
    3. US – 9,688,000 ” / ”
    4. China – 4,273,000 “/ ”
    5. Iran – 4,252,000 barrels/day [can see the drop in 2011]
    6. Canada – 3,483,000 ” / ”
    7. Mexico – 2,983,000
    8. United Arab Emirates – 2,813,000
    9. Brazil – 2,719,000
    10. Nigeria – 2,458,000
    11. Kuwait – 2,450,000
    12. Iraq – 2,408,000
    13. Venezuela – 2,375,000
    14. Norway – 2,134,000
    15. Algeria – 2,078,000

    It’s an interesting website. You can sort the countries by production total, export total, internal consumption total, or import total.

    Here are the largest importers. The US is over twice as large as China, the 2nd-largest importer:

    1 United States – 9,631,000 barrels/day
    2. China – 4,542,000 barrels/day
    3. Japan – 4,261,000 ” ”
    4. Germany – 2,319,000
    5. India – 2,172,000
    6. Korea, South – 2,142,000
    7. France – 1,791,000
    8. United Kingdom – 1,566,000
    9. Spain – 1,440,000
    10. Italy – 1,397,000
    11 Netherlands – 962,000
    12 Singapore – 942,000
    13 Taiwan – 894,000
    14 Turkey – 650,000
    15 Belgium – 619,000

  • Alex Scipio

    It isn’t just oil the Iranians are running out of. The average female Iranian of childbearing age had seven siblings but will have one child herself. Iranian women have among the lowest total fertility rate on the planet. It’s arguable that no one will have to worry about Iranians at all within two generations. If Iranians don’t believe in their culture or future, no reason exists for anyone else to. More advanced cultures who are able to use Iran’s resources more productively will do so soon enough. If the pre-Enlightenment barbaric world of islam isn’t going to use their resources, whether via stupidity, irrationality, laziness, mythology or erasing themselves from the gene pool, that’s fine with the civilized world.

  • Mark Michael

    Re: Comment 7 The House of Pain

    Dear intern, so you accidentally hit the “3” key twice when you typed 3.8 million (33.8) – no big deal, altho you might proofread a little better! (If you did proofread and didn’t recognize that 33.8 million was awfully big, then, well..)

    This is unrelated to this Iran post, but energy issues are a really big deal this year, given the upcoming prez elections and increasing gas prices at the pump. There’s a lot of misleading demagoguery going on in the media w.r.t. energy here in the U.S. “Just the facts, ma’am” from Joe Friday is a good mantra IMO. Keith Hennessey had a very nice, comprehensive post about U.S. energy usage, sources, imports. See:

    He is an economist who served on Bush’s CEA, also in the Senate as an economics staffer in the 1990s. He has a graph created by Lawrence Livermore Lab that’s tells you just about everything you’d want to know about it in one picture.

  • Kris

    Bill@1: Are you actually claiming that Iran receives a noticeable portion of Iraq’s oil profits? That would be highly significant news indeed. If only I had a better source than a lone blog comment…

  • Jerald

    Iran is in de facto management of the oil areas of the southeast part of Irak and in the upload of their generate. Iran will not be injuring for some time.

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