Iran is losing $133 million per day as a result of U.S.-led sanctions against it. Shipments from Iran have plunged by 1.2 million barrels a day, or 52 percent, since the sanctions banning the purchase, transport, financing and insuring of Iranian crude began July 1, according to data compiled by Bloomberg. It is being projected that in a year, the embargo would cost Iran about $48 billion in revenue, equivalent to 10 percent of its economy.
While Iran’s threats to disrupt the flow of oil through the Persian Gulf sent crude to a three-year high in March, increased production from Saudi Arabia, a U.S. output boom and the slowing global economy have left prices 1 percent lower in 2012.
Brent oil has dropped 3.8 percent to $106.34 a barrel since Jan. 23, when European Union ministers approved a ban on the purchase and insurance of Iranian oil. The U.S. is paying 6.2 percent less than a year ago for imported crude as domestic fields produce the most in 13 years, driving stockpiles to all- time highs, Energy Department data show.
Crude futures in London rose as high as $128.40 on March 1, an advance of 20 percent for the year, after Iranian officials threatened to order the closing of the Strait of Hormuz. The Gulf waterway, 21 miles wide (34 kilometers) at its narrowest, is a conduit for 20 percent of the world’s traded oil, according to the Washington-based Energy Information Administration.
Prices retreated as Saudi Arabia boosted output. The Organization of Petroleum Exporting Countries’ biggest producer is pumping more than 10 million barrels a day, the most in three decades and 22 percent more than at the end of 2010, according to the International Energy Agency. The Paris-based adviser to the world’s biggest industrialized economies cut its forecast for global oil use four times this year, to 89.9 million barrels a day.