According to, Homayoun Falakshahi, a senior research analyst with Wood Mackenzie’s Middle East upstream team, after US made a nuclear deal with Iran in 2016, the latter's production and exports recovered to pre-sanctions levels inside six months.

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Nevertheless, with the reimposition of the sanction, Iranian crude and condensate exports reduced to about 1.8 million barrels per day in September. In fact, South Korea has cut all imports since August, while European buyers are also stepping back. Specifically, France stopped in July, with Italy, Spain and Greece following.

Woodmac expects now that crude exports will fall to 1 million barrels per day, though it could vary month to month; and condensate to 100,000 barrels per day.

Mr. Falakshahi explained:

It will be difficult for Iran to maximise exports when virtually all trade in oil is cleared in US dollars, putting international oil companies, many national oil companies, traders and banks off limits.

Another problem will be the access to shipping insurance, despite the fact that Iran has its own fleet of 60 tankers and has offered cargoes CIF (cost, insurance and freight) to buyers. In addition, specialised tanker trackers also suggest that Iranian tankers are operating ghost with disabled ID systems to avoid detection.

These developments will affect the oil market as well. The biggest risk is this winter, when the loss of another 1 million barrels per day or more from Iran adds to a similar loss in supply from Venezuela over the last couple of years. What is more, Saudi Arabia, UAE and Kuwait have increased production since July to limit the increase in price as the market tightens.

We think there’s just enough growth in supply from elsewhere to muddle through the next few months, meet winter demand and avert a price spike. That means the market is vulnerable to strong demand in a cold winter or any new supply outage.

Ann-Louise Hittle, vice president macro oils, stated.

She also added that the situation may look better when the northern winter is over, but only up to a point. Namely, Brent will average US$74 a barrel in 2019, with supply expected to grow 1.6 million barrels per day in 2019, with US tight oil leading this.