Iran's crude oil exports and production levels have hit new highs in 2023, despite U.S. sanctions, according to consulting firms and shipping data. This increase enhances global supplies at a time when other countries are cutting their production. Iran's oil exports have been constrained since former President Donald Trump withdrew the U.S. from a nuclear deal in 2018 and reinstated sanctions aimed at reducing Iranian oil exports and revenues.
Data from "Kpler," a firm providing oil shipment flow data, showed that Iranian crude oil exports surpassed 1.5 million barrels per day in May, marking the highest monthly level since 2018. Exports were at 2.5 million barrels per day in 2018 before the U.S. withdrew from the nuclear agreement. In May, Iran announced it had raised its crude oil production to three million barrels per day, equivalent to about three percent of global supplies and its highest production rate since 2018, according to figures from the Organization of the Petroleum Exporting Countries (OPEC).
The International Energy Agency estimated this week that Iran's oil production in May was 2.87 million barrels per day, a figure close to the official number announced by Iran. This increase in Iranian production comes as the OPEC+ alliance, which includes OPEC and Russia among others, cuts production to support a market facing price pressures due to expectations of weakened economic demand.
Sara Vakhshouri from SVB stated, "The sanctions are in place, but they may not be fully enforced or monitored." Vakhshouri had previously mentioned that during Biden's presidency, stricter measures regarding Iranian oil exports have not been implemented. She added, "All those additional supplies are also in the black market where there is no transparency and, therefore, do not reflect in official global supply and demand data."
The U.S. State and Treasury Departments did not respond to requests for comments regarding the rigor of U.S. sanctions enforcement. Analysts and shipping data indicate that China is the largest buyer of Iranian oil, with shipments also going to Syria and Venezuela.
