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Iran's Oil Production Has Hit Historic Lows As Saudis Take Market Share

Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia. File photo

Iran’s oil output has plummeted to a record low since 1990 in May as a result of U.S. sanctions, Bloomberg reported on Monday June 3.

Saudi Arabi, however, boosted its oil production to keep OPEC’s commitments to the market by maintaining an overall steady output for the cartel, keeping supplies mostly unaffected.

OPEC produces some 40 percent of the international demand for crude oil.

According to Bloomberg, “Iran’s production plunged by 230,000 barrels a day to 2.32 million a day, according to the Bloomberg survey. Saudi Arabia increased by 170,000 barrels a day to 9.96mbd. Total supply from OPEC’s 14 members was unchanged at 30.26 million barrels a day.”

Libya and Iraq also increased production in recent weeks.

There are no reliable figures yet on Iran's oil exports for May, but earlier shipping data showed little activity.

President Donald Trump announced the U.S. withdrawal from the nuclear deal with Iran in May 2018. Subsequently Washington imposed backbreaking sanctions on Iran which dramatically affected its oil exports and international banking, while paralyzing other sectors of Iran’s economy.

As OPEC members meet in coming weeks to plan for next six months’ production, Iran has warned that the cartel is risking collapse for political reasons, mainly as a result of regional tensions fueled by the longstanding Iran-Saudi disputes.

Tensions between Tehran and Riyadh have been dangerously on the rise during the past weeks following mysterious attacks on shipping and drone attacks on Saudi oil establishments. The Saudis blame Iran for these attacks.