Azerbaijan, Baku, April 18 / Trend A.Badalova /
Sanctions against Iran's oil exports begin to have a noticeable effect, and the evidence of that is the drop in country's production last month, Global Energy Studies Centre (CGES) says.
"Estimates of Iranian oil production in March indicate that sanctions against Iran's oil exports are beginning to have a noticeable effect, causing Iranian production to drop to 3.3 mbpd, the country's lowest output since 1992," CGES report says.
The Centre believes that Iran's oil production might well deteriorate further, as oil importers like Turkey, Spain, South Korea and Japan come under growing pressure from the U.S. and the EU to reduce their imports from Iran.
According to the International Energy Agency (IEA), Iranian oil production decreased by 50,000 barrels per day to 3.3 million barrels in March compared to 3.55 million barrels in the end of 2011.
The agency predicts the country's oil production to fall by as much as 950,000 barrels per day by mid-2012 as a result of the U.S. and EU embargo.
On Jan. 23, EU foreign ministers approved sanctions against Tehran, including a ban on Iranian oil imports, a freeze on the assets of the Central Bank of Iran (CBI) within the bloc's states and a ban on selling diamonds, gold, and other precious metals to Tehran. Embargo on Iranian oil import by the EU members will take effect from July 1.
On the other hand, CGES believes, sanctions are at last paying dividends by dragging Iran back to the negotiating table for talks between Iran and the US, China, Russia, Germany, the UK and France over the coming weekend.
"If the talks go well and Iran provides clear evidence that it intends to halt its nuclear programme, then everyone might heave a sigh of relief, but the oil market is not holding its breath, particularly since Saudi output increases intended to compensate for the loss of Iranian crude have been underwhelming," CGES says.