Iran’s crude oil production
Iran is the third-largest crude oil producer among OPEC members. The EIA estimates that Iran’s crude oil production was flat at 3.8 MMbpd (million barrels per day) in August 2017—compared to July 2017. Production rose by 180,000 bpd (barrels per day) or 4.9% year-over-year.
Iran’s crude oil production is at an eight-year high. The production rose after the US lifted sanctions on Iran in January 2016. High crude oil production from Iran is bearish for crude oil (DWT) (BNO) (UWT) prices. Lower crude oil prices have a negative impact on oil and gas producers’ earnings like Northern Oil & Gas (NOG), Noble Energy (NBL), Chesapeake Energy (CHK), and QEP Resources (QEP).
Iran’s crude oil exports
According to market intelligence company Kpler, Iran’s crude oil exports rose by 180,000 bpd to 2.135 MMbpd in August 2017—compared to July 2017. Iran’s crude oil exports rose 9.3% month-over-month. Iran’s crude oil exports rose despite the production cut deal. Any rise in Iran’s crude oil exports is bearish for crude oil (FENY) (FXN) (IYE) prices.
Iran’s crude oil production plans
Iran’s crude oil production averaged 3.5 MMbpd and 2.8 MMbpd in 2016 and 2015, respectively. Iran was allowed a small production increase in the production cut deal.
Iran plans to increase its crude oil production to 4 MMbpd by December 2017. The National Iranian Oil Company, a state-run monopoly company, plans to increase its production to 4.5 MMbpd by 2022.
Any rise in production from Iran would pressure crude oil (SCO) (BNO) (XLE) prices. Lower crude oil prices have a negative impact on oil and gas producers’ earnings like Northern Oil & Gas (NOG) and QEP Resources (QEP).
In the next part, we’ll discuss some crude oil price forecasts.
On September 18, 2017, US crude oil (USO) November futures closed at $50.35 per barrel, 0.2% below the previous closing price.
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