Iran' Oil Production is up in the hope of reviving the JCPOA

 

Iranian oil production in July 2021

According to the latest report on oil productions by the member states by the OPEC+, the Iranian crude oil output for July shows an increase by 28%, compared to the output for the same month last year.

The figure for July, 2021 stood at 2.485 million bpd and it was 1.936 million bpd for the same period in 2020.

The pandemic clearly accounts for the relatively low output in 2020. Despite being under the US-led sanctions, the increased production this year, however, coincides with numerous reports that say the crude oil production activities in Iran is gathering momentum.

During the first few months of the Biden administration, the crude oil production in Iran started accelerating in proportion to the prevailing hope of reviving the JCPOA, 2015 Iran nuclear deal, at that time.

There were a few false dawns during that period: at some point, Mr Hassan Rouhani, the then Iranian president, riding on a wave of optimism, even said that a deal was imminent with the signatories to the nuclear deal – only to find that was not the case in the full glare of publicity in a matter of few hours.

Neither Iran nor the rest of the signatories to the JCPOA has given up on reviving the deal, though. The fact that neither side turned the back on the talks shows that the likelihood of meeting up again in Vienna over the discussions is still possible, despite the progress being in limbo for some time.

At present, Iran is going through a difficult period in the face of rising infections and deaths due to clusters of Covid-19 across the country; falling oil revenues have made matters worse for Iran when it comes to buying vital medicines, equipment and even vaccines.

Certain high ranking officials in the new Iranian administration blamed the previous administration on failure to buy vaccines against Covid-19, citing the cost. The former administration, in turn, hit back at the claim by saying that was not the case.

In addition, the frequent power-cuts, prevailing droughts in arid regions and water shortages have created additional problem for the authorities, none of which has quick-fix solutions.

The alleged Iranian involvement in the attack against an Israel-registered ship dealt a severe blow to Iran’s ambition to returning to the crude oil markets as a normal trader, despite its strong denial.

Although the US said that there would be a ‘proportional response’ at the height of the tension involving the tanker in question, the possibility of retaliation has since somewhat gone down with a slight deviation of the accusation from Iran – towards a militant group in Yemen.

Iran has been ramping up the oil production in recent months in the hope that President Raisi, the newly elected president, will choose pragmatism over rigid ideology in order to address serious economic challenges, which could potentially make the public turn against the government.

That means there is still a ray of hope of reviving the JCPOA – against many odds at present.

 

 

 

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