Iran's oil output is set to decline by 1 million barrels per day (mbpd) to below 2.5 mbpd by the end of June, states JP Morgan. Countries have been reducing their oil purchases from Iran and shifting to other sources due to increased pressure from the US.
"In total, the reported shifts may account for a further reduction of nearly 300,000 barrels per day in Iranian crude sales during April which would imply lost sales are now approaching 700,000 bpd below January levels”, Trend News Agency quotes Lawrence Eagles of JP Morgan who added that "This is substantially faster than we expected and with likely further adjustments to come it would imply output could continue to push down below 2.5 million barrels per day by the time the embargoes are officially implemented, a net loss of 1 million barrels per day from January's level.
Meanwhile, the EU sanctions are expected to come into effect by July 01, 2012. Considering that the sanctions also encompasses P&L businesses from Europe, shipping tanks will increasingly become reluctant to carry Iran oil to its markets, further impacting Iranian oil production.
Source: Commodity Online