Iran produced 2.478 million barrels per day (bpd) in July, up just 26,000 bpd from June, according to OPEC’s latest monthly report.
By contrast, Saudi Arabia increased output by about 590,000 bpd, Iraq by 665,000 bpd and Kuwait by 393,000 bpd. Combined crude production among OPEC members rose by about 1.66 million bpd in July to 23.63 million bpd.
Iran’s export revenues have recovered even more slowly.
Commodity intelligence firm Kpler told Iran International that daily deliveries of Iranian crude to Chinese refineries fell from more than 1.7 million bpd in March and April to less than 500,000 bpd in July.
Kpler said Iran offered its crude at a discount of more than $5 a barrel in July, while transportation costs exceeded $10 a barrel. Once payments to intermediaries were included, it estimated that at least 25% of the nominal value of Iran’s oil sales was lost before the proceeds reached the country.
At July’s export volumes, Kpler estimated that crude delivered to China had a nominal value of about $1.2 billion. That compares with average monthly oil revenues of about $3.8 billion last year, according to OPEC estimates.
China has long been overwhelmingly the largest destination for Iranian crude, leaving Tehran particularly exposed to changes in purchases by Chinese refineries.
Iran struggles to restore output
Iranian production fell by nearly 1 million bpd between the beginning of the Middle East war and May, according to OPEC figures.
Over the following two months, it recovered by only about 200,000 bpd, reaching 2.478 million bpd in July. The pace of that recovery slowed sharply last month, with the 26,000-bpd increase leaving production roughly a quarter below pre-war levels.
The figures contrast with the much faster restoration of production elsewhere in the Persian Gulf following the severe disruptions caused by the war.
Saudi Arabia, Iraq and Kuwait accounted for much of OPEC’s July increase as producers took advantage of the temporary ceasefire to restore output. Despite the rebound, regional production remains well below levels before the conflict, with large volumes of Persian Gulf supply still offline.
The contrast is even sharper with the United Arab Emirates, which left OPEC in May and has since sharply expanded production. OPEC continues to track UAE output in its monthly report despite its departure from the group.
OPEC estimates that UAE crude production reached around 3.78 million bpd in July, approximately 882,000 bpd above its level in the months preceding the war.
Venezuela also continued its recovery, with production reaching about 1.12 million bpd in July, up from around 940,000 bpd in January.
For Iran, however, the combination of depressed production, sharply lower deliveries to China and the costs associated with selling and transporting its crude means the financial recovery has lagged even further behind the rebound in output.