Iran’s oil income drops as sanctions begin to bite

The Islamic Republic or Iran has come under intense financial pressure as sanctions on oil exports imposed by EU and Washington have begun to cut into the Iranian economy. Oil exports are at their lowest levels for two decades and the impact is beginning to take its toll.

Iran’s daily export rate for 2011 was approximately 2.2 million bbls. Most recent estimates for 2012 show this figure has decline by 600 000 bpd, with a further drop expected from July 1^st when the EU sanctions begin to be enforced.

Although Iran has attempted to stop outsiders from monitoring the destinations of its exports by turning off the vessels’ tracking devices, counts taken of shipments arriving at China, India, Japan and South Korea show a 20% decrease.  The decline in shipments to these countries alone adds up to a decrease of approximately 375 000 bpd, worth US$ 35 million a day.

According to official Iranian figures, inflation is running at 20%, although many suspect the prices of essentials such as food are rising at a faster rate. According to Reuters, the value of the Iranian Rial began to fall in January and market rates show that it now stands at 17 800 Rials to the US Dollar.

Edited from various sources by David Bizley

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