The late Iranian President Ibrahim Raisi assumed the presidency of the country on August 4, 2021, at a time when the country was suffering from American sanctions imposed on it in May 2018, when Washington announced the implementation of sanctions on oil-rich Iran in light of the difficult economic conditions that the country is going through, as The sanctions began to be implemented gradually starting in August of the same year.
The United States lifted sanctions on Iran after reaching an agreement on the Iranian nuclear program in 2015, before reimposing them when then-US President Donald Trump withdrew from the agreement.
In 2021, Iran’s average oil production ranged between two million and 2.2 million barrels per day, out of the full production capacity of 3.85 million barrels per day, even on the eve of US sanctions.
Difficulties
However, maintenance problems and the difficulty of supplying oil to global markets in light of the sanctions kept production quantities at levels below the country’s actual capacity, and thus caused a decline in financial revenues.
As of July 2021, that is, before Raisi took power, Iran’s oil production reached 2.02 million barrels per day, according to data from the Organization of the Petroleum Exporting Countries (OPEC).
By the end of 2021, Iran’s average oil production reached approximately 2.4 million barrels per day, which is still less than full capacity by about 1.45 million barrels per day.
Shadow fleet
In early 2022, the United States accused Iran of trying to circumvent the sanctions imposed on the oil industry and its exports, while Western media outlets, such as the Washington Post and the New York Times, began talking about a “shadow fleet” to transport oil.
The “Shadow Fleet,” according to sources for these newspapers, is responsible for marketing Iranian oil, and later began working on marketing Russian oil, after Western sanctions were imposed on Moscow due to the war in Ukraine in February 2022.
According to Bloomberg, the “shadow fleet” owned by countries such as Iran, Russia, and Venezuela is at least 40 ships in strength, whose mission is to drain sanctioned oil.
By the first half of 2022, secondary OPEC data indicate that Iran’s oil production reached 2.6 million barrels per day, at a time when US sanctions were aiming for production to reach zero.
Production rose to approximately 2.8 million barrels per day by the first half of 2023, with the expansion of Iran’s circle of customers for oil, which it was selling at discounts of about $15 per barrel less than international prices, according to a Bloomberg report.
According to the agency, “The Iranian regime was able to deliver one million barrels of oil per day to customers such as China, but this causes it to lose more than $370 million due to the discount, in addition to the costs of circumventing the sanctions.”
Sanctions are ineffective
In July 2023, officials from the administration of US President Joe Biden announced that the sanctions against Iran were ineffective and ineffective. Critics, including Republican Senator Ted Cruz, believed that the Biden government was not implementing the oil sanctions in practice.
Cruz said, in statements issued by his office last July, that President Ebrahim Raisi succeeded in canceling the impact of sanctions on oil, by following circumstantial methods that would make Iranian crude flow naturally to Asian markets.
Last year, Iranian Economy Minister Ehsan Khandouzi confirmed, in an interview with the British Financial Times, that his country had reached the highest level of its oil exports since 2018, at more than 1.3 million barrels per day.
According to OPEC data, Iran’s average oil production by the end of 2023 reached about 3.1 million barrels per day, before production reached 3.2 million barrels per day last April (the latest available data).
Thus, Iranian oil production during the Raisi era and under Western sanctions grew by 60%, between August 2021 and April 2024.
After the jump in Iranian production, average exports increased to 1.537 million barrels per day during the first four months of 2024, an increase of 39% from its average of 1.106 million barrels per day during the same period in 2023, according to data from Kpler, a company specializing in oil data and tracking.
