Financial firm JP Morgan predicts that Iran’s crude oil production may fall by one million barrels a day by the end of June, compared to January levels, adding that refiners have managed to reduce their demand for Iranian crude faster than had been predicted.
JP Morgan’s energy research team say cuts by European, South African and Japanese refineries have already had an impact.
The report indicates that: “In total, the reported shifts … may account for a further reduction of nearly 300,000 bpd in Iranian crude sales during April, which would imply lost sales are now approaching 700,000 bpd below January levels."
The JP Morgan research report notes: 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 bpd by the time the embargoes are officially implemented, a net loss of 1 million bpd from January’s level.”
U.S. and EU sanctions on Iranian oil exports will take full effect on July 1. All countries that have not shown proof of their steps to reduce oil imports from Iran will have to face U.S. financial sanctions.