Iran boosts oil production in bid to bypass sanctions
January 6, 2013, 10:36 am

Iran’s oil minister Rostam Ghasemi. [AP]

In early 2012, the US and the European Union – backed by UN Security Council resolutions – imposed new sanctions on Iran’s energy and financial sectors in the hopes of strangling Tehran’s economy to persuade it to give up its nuclear program.

Iran says its nuclear program is strictly for peaceful purposes while the US and Israel say Tehran could be used to manufacture nuclear weapons.

Ghasemi admitted that Iran’s energy sector was affected by the sanctions at the beginning of the year but that it had realigned its focus and was now able to not only export oil to “the farthest spots” but also to boost production.

Iran denied an earlier US estimate that its oil exports had fallen to 1 million barrels a day. According to the Fars News Agency based in Tehran, National Iranian Oil Company has increased its oil production by about 150,000 barrels per day.

Iranian officials say they hope this means that by the end of 2013, the Islamic Republic will be able to raise production to more than 3 million barrels per day.

And there is a market for Iranian oil. Although Asian countries such as India, China, South Korea and Japan rely on Iranian oil, they have somewhat complied with the sanctions regimen and cut their imports.

Nevertheless, energy analysts say that Iran has increased volume and has exported more fuel between July and November of 2012 than the period January to July of the same year.

Iran is likely to continue selling oil to its Asian clients – principally China, India, South Korea and Japan. China is Iran’s largest trading partner and industry analysts believe that Beijing purchases nearly 50 per cent of the Islamic Republic’s oil exports.

India has signaled it will cut Iranian oil imports by 10 to 15 per cent. Turkey’s imports of Iranian oil have slowly stabilised: in July 2012 they were 48,000 barrels per day, shooting up to 200,000 the following month. From September to December 2012, Turkey’s imports of Iranian oil were steady at 100,000 barrels per day.

Turkey also imports about 20 per cent of its natural gas, according to the Turkish Weekly. The local newspaper also said that Turkish Energy Minister Taner Yildiz said his country would keep buying natural gas from Iran despite European pressures to halt the trade.

Source: Agencies