(BOE Report) – Israel carried out strikes on Iran on Friday, targeting its nuclear facilities, ballistic missile factories and military commanders at the start of what it warned would be a prolonged operation to prevent Tehran from building an atomic weapon.
The National Iranian Oil Refining and Distribution Company said refining facilities and oil storage did not sustain any damage in the attacks.
Iran, the third largest producer in the Organization of the Petroleum Exporting Countries, extracts about 3.3 million barrels of oil per day (bpd), or around 3% of global output.
Following are some facts on the country’s energy industry, exports and the impact of previous Western sanctions.
SANCTIONS AND OPEC
Iran’s oil production was at its peak in the 1970s with record output of 6 million bpd in 1974, according to OPEC data. That amounted to over 10% of world output at the time.
In 1979, the United States imposed the first wave of sanctions on Tehran and since then the country has been the target of several waves of U.S. and European Union sanctions.
The United States tightened sanctions in 2018 after Trump exited a nuclear accord during his first presidential term. Iran’s oil exports fell to nearly zero during some months.
Exports rose steadily under Trump’s successor President Joe Biden’s administration with analysts saying sanctions were less rigorously enforced and Iran had succeeded in evading them.
Iran is exempt from OPEC+ output restrictions.
WHO IS THE MAIN BUYER OF IRANIAN OIL?
Iran’s crude exports have risen to a multi-year high of 1.8 million bpd in recent months, the highest since 2018, driven by strong Chinese demand.
China says it does not recognise sanctions against its trade partners. The main buyers of Iranian oil are Chinese private refiners, some of whom have recently been placed on the U.S. Treasury sanctions list. There is little evidence, however, that this has impacted flows from Iran to China significantly.
Iran has for years evaded sanctions through ship-to-ship transfers and hiding ships’ satellite positions.
PRODUCTION AND INFRASTRUCTURE
FGE consultancy says Iran refines about 2.6 million bpd of crude and condensate and exports 2.6 million bpd of crude oil, condensate and refined products.
The country also produces 34 billion cubic feet of gas per day, according to FGE, accounting for 7% of global production. All gas is consumed domestically.
Iran’s hydrocarbon production facilities are primarily concentrated in the southwest, in the Khuzestan province for oil and in the Bushehr provinces for gas and condensate from the giant South Pars field.
It exports 90% of its crude via Kharg Island.
Analysts say Saudi Arabia and other OPEC members could compensate for the drop of Iranian supply by using their spare capacity to pump more. Though with a number of producers in the group currently in the process of raising output targets, their spare capacity is becoming more strained.
(Compiled by Dmitry Zhdannikov and Alex Lawler; Editing by Emelia Sithole-Matarise and Sonali Paul)
