Iran oil revenues down 45 percent after sanctions: Minister

Published Tuesday, January 8, 2013

Iran's earnings from oil have slumped by 45 percent since last March and are not likely to rise over the next three months, Iranian Oil Minister Rostam Qasemi told a parliamentary budget committee on Monday, according to Iran's ISNA news agency.

Qasemi has until now played down any impact of Western restrictions on oil sales but he told Iranian MPs that sales volumes had fallen by 40 percent over the last nine months while earnings had dropped 45 percent, ISNA quoted a budget and planning committee spokesman as saying.

Iranian officials do not expect any improvement in oil earnings before the end of the current Iranian year in late March and foresee only a modest rise in exports after that.

"It is estimated that oil exports next (Iranian) year will reach 1.5 million bpd," committee spokesman Gholam Reza Kateb was quoted by ISNA as saying after a presentation by Qasemi.

The International Energy Agency (IEA) estimates that Iranian oil exports fell from 2.2 million barrels per day (bpd) at the end of 2011 to just 860,000 bpd in September 2012, as the United States and European Union stepped up efforts to starve Tehran of funds for its disputed nuclear program by pressuring Iran's mainly Asian customers to buy less.

The IEA estimates that Iranian exports recovered to 1.3 million bpd in October as China and South Korea bought more oil ahead of winter. But Iranian production fell back to its lowest level since 1988 in December and exports dipped again because of sanctions.

Qasemi has previously publicly denied any significant reduction in production or exports.

But the semi-official Fars news agency reported in November that Iran's state budget for the next fiscal year may assume exports of just 1 million bpd, which implies Iran expects to make around $110 million less every day from oil sales than before sanctions tightened in early 2012.

In another sign of the effectiveness of the sanctions, most flights operated by Iranian airlines to domestic and international destinations have been cancelled because of unpaid debts.

Abdolreza Mousavi, an aviation official, said Monday the Oil Ministry would supply fuel to airlines only if they pay their debts and buy fuel with cash. He was quoted by the semi-official ISNA news agency.

Iranian airlines nearly doubled prices of plane tickets in November because of higher fuel prices and the plunging value of the Iranian rial against foreign currencies.

The United States and many of its allies accuse Iran of enriching uranium to levels used in nuclear weapons. Iran says its atomic program is solely for peaceful purposes.

(Reuters, AP)

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