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Geopolitics · Iran · Oil · Sanctions
Iran's crude production plummeted over 18% in May, falling by 546,000 barrels a day to 2.33 million barrels a day, as U.S. forces maintained a naval blockade, severely choking off exports and creating a risk of storage capacity exhaustion.
Iranian seaborne crude oil exports dropped to 260,000 barrels a day last month, a steep 1.2 million barrels a day decrease from April, reaching the lowest monthly level in six years, according to Kpler. A complete halt in loadings at Kharg Island between May 6 and May 22 reduced exports from that terminal to 176,000 barrels a day from 1.34 million barrels a day in April.
President Trump threatened further strikes and the taking of Kharg Island after renewed clashes, with negotiations stalled over Iran's nuclear program and financial relief. Despite prolonged supply disruptions, Brent crude traded around $93 a barrel and West Texas Intermediate near $90 a barrel, remaining below March's levels due to emergency oil reserve releases, softer global demand, lower Chinese crude imports, stronger U.S. exports, and pipeline rerouting by Saudi Arabia and the U.A.E. OPEC cut its global oil-demand growth forecast to 970,000 barrels a day from 1.17 million previously, contrasting with the U.S. Energy Information Administration's expectation of a 1.1 million barrels a day decline and the International Energy Agency's projection of a 420,000 barrels a day contraction.
Production from OPEC members fell by 177,000 barrels a day to 18.83 million barrels a day in May, while the broader OPEC+ alliance declined by 185,000 barrels a day to 33.13 million barrels a day, even as Saudi Arabia and the U.A.E. raised production.
