The regime earned $69 billion from overseas oil sales last year, compared to $95 billion in 2011 following the latest round of sanctions.
The loss of income will severely hit the already floundering economy of the Iranian regime. Oil sales make up 80% of Iran’s total export earnings and up to 60% of the regime’s revenue, according to figures from the Economist Intelligence Unit.
The US and EU measures have also prohibited large-scale foreign investment in the regime’s oil and gas sector and cut off its access to European and US sources of financial transactions.
Further sanctions implemented against the Central Bank of Iran, and an EU ban on protection and indemnity clubs (P&I Clubs) from providing Iranian oil carriers with insurance and reinsurance has also helped curb Iranian exports.
The combined measures have meant Iran’s crude oil and lease condensate exports have fallen from 2.5 billion barrels a day in 2011 to 1.5 billion last year.
This 39% drop has also triggered a 17% decline in crude oil and condensate production and a 1% decline in consumption of liquid fuels like gasoline, diesel and jet fuel.
The figures come after a smaller drop in 2011 due to declining production in ageing fields. It means that by August 2012, Iran’s monthly crude oil production had fallen below Iraq’s for the first time since 1989.
A new set of sanctions by the European Union became effective on April 1, 2013, which is set to hit the regime’s exports even harder. They will bar EU insurance companies from providing coverage to any refiner and refinery operators that process crude oil of Iranian origin.
The new provision will mostly affect refiners in South Korea and India, which rely heavily on European insurance providers. The new sanctions are also expected to hit exports and production by the Iranian regime in the coming months as refiners try to find alternative suppliers of insurance.