|Sanctions not affecting Iran’s oil output||
It is well documented that the U.S. sanctions against Iran have no enormous damage to the nation’s civilian economy, especially on the putative target of the sanctions, Iran’s oil production.
Turns out, the sanctions are doing exactly nothing so far, with Iran’s oil output in February exactly the same as its production in January, 3.5 million barrels per day.
Industry experts expressed surprise at the lack of effect, saying they were positive that the sanctions were “having an impact” even if they weren’t affecting the bottom line, and pointing to increases in Iran’s storage, pending new customers.
And while those same experts are predicting that the sanctions will start doing something in the next couple of months, Iran seems to be having good luck selling the excess oil to China and India. The use of barter instead of U.S. dollars and offers of discounts for long term contracts may not be ideal for Iran’s government, but there still seems to be plenty of appetite for their oil abroad.
Iran said on Thursday it has maintained oil production levels despite sanctions.
Iran's OPEC governor said oil output in February was steady at around 3.5 million barrels per day, the same as in January.
"The production for this month will be the same as the previous, around 3.5 (million)," said Mohammad Ali Khatibi, Iran's representative on the board of governors of the Organization of the Petroleum Exporting Countries.
Oil analysts said the assessment looked accurate.
"We don't see decreasing Iranian volumes this month," said one industry consultant who tracks Iran's oil output. "I think the view that production is falling is simply based on assumptions that the sanctions are already restricting export volumes. Although it is having an impact on their operations, we don't see a decrease in exports."
European buyers have cut back on purchases from Iran ahead of an EU embargo on Iran's oil imports effective July 1.
The United States has tightened financial sanctions on Tehran, making it increasingly tricky for buyers of Iranian crude to process payments back to Tehran.
Supply over the past six months is stable, contrary to expectations among some industry watchers that Iran would have to slash production as customers chose to find alternative supplies because of sanctions.
Khatibi said Iran had no problem selling its oil.
"We still have customers, everything is normal," he said.
China, India and Japan, the top three buyers of Iranian oil, together buy about 45 percent of Iran's crude exports and are slicing purchases by about 10 percent.
Turkey, which buys nearly 40 percent of its crude oil from Iran, has so far been a loyal customer and is likely to stick with Iranian oil.
Selling all its oil is likely to get more difficult for Iran.
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