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Iran Parliament Forecasts Up To 5.5 Percent Economic Contraction As Oil Exports Halve

People walk through the old grand bazaar where shops are closed during a protest by merchants who closed their businesses to show dismay at the economic crisis. Tehran, June 25, 2018.

The Parliament Research Center in Iran has forecast two scenarios for Iran’s economic growth, based on two different levels of oil exports for the country.

The study forecasts 2.6 and 5.5 negative growth for Iran in the current Iranian year, ending March 20, based on the two scenarios.

In the first scenario, if Iran’s crude and other oil product exports fall 800,000 barrels per day from September to March 2018-2019, the country would experience a negative growth rate of 2.6 percent.

In the second scenario, if exports are reduced by 1.6 million barrels per day, the economic contraction will reach 5.5%.

For the next Iranian calendar year starting March 21, the parliament’s research center forecasts a contraction of 4.5 to 5.5 percent.

The research center has also determined that current U.S. sanctions are similar to the previous international sanctions imposed during the Obama administration, which forced Iran to negotiate with world powers over its nuclear program.

U.S. sanctions on Iran's oil exports kicked in last November, but buyers had already started cutting imports from Iran in the preceding months. Various reports have put Iran's current rate of daily exports from 1.3 to 1.5 million barrels.

In the first six months of 2018, before the U.S. withdrawal from the nuclear agreement and the decision to reimpose sanctions, Iran was exporting up to 2.7 million barrels of oil per day. This means Iran has already lost more than a million barrels of sales daily.