Daily Energy Report
Iran’s oil production, UK energy windfall tax, Russian gasoline exports, renewable diesel, arbitration proceedings against Venture Global LNG, and more
CHART OF THE DAY: How Credible Are Iran’s Oil Figures?
Yesterday, we published a short note on a media report that Iran and the US were close to reaching a nuclear deal, and which was later denied by the White House. Today, we look at Iran’s oil production since this has now become the talk of the market, with a focus on Figure (1) above which shows Iran’s output as reported by secondary sources to OPEC.
EOA’s Main Takeaway:
The figures on Iran’s oil production are not credible at all. The output numbers in Figure (1) above, which shows only crude output and does not include about 0.4-0.5 mb/d of condensates, are questionable. No country in the world can have a flat production like that. We believe that production numbers are higher.
Oil exports (crude and condensate) are also higher than what is reported by various media outlets, especially since the published figures do not include oil transported by several ghost tankers, and oil smuggling activities between Iran and neighboring countries. In addition, petroleum products are also smuggled, mainly to Pakistan, and it is difficult to know the exact amount of refined products produced at Iranian plants.
Our view is that Iran is producing at maximum, and a nuclear deal with the US will not lead to an immediate increase in Iran’s oil production and exports. As we explained yesterday, it will take time for Iran to meaningfully increase production.