Iran Hit Hard by Stringent Sanctions

Iran holds nearly 10% of the world's crude oil reserves and 13% of OPEC reserves. About 70% of Iran's crude oil reserves are located onshore, with the remainder mostly located offshore in the Persian Gulf. Iran also holds proved reserves in the Caspian Sea, although exploration has been at a standstill.

Iran's production capacity is estimated at 3.6m b/d, but strict sanctions cut the country's output significantly, hitting a low at 2.58m b/d in September 2013. The largest buyers of Iranian crude and condensate are China, India, Japan, South Korea and Turkey. Although Iran had been subject to four earlier rounds of United Nations sanctions, the much tougher measures imposed by the US and the EU have severely hampered Iran's ability to export its oil, which affected the country's oil production.

Later in 2013 Iran and the P5+1 managed to strike an interim agreement where Tehran suspended some of its nuclear activities in exchange for some easing of sanctions. This led to a small upswing in Iran's oil production in 2014 and production reached 2.8m b/d in June this year.

Source : FX-Primus

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