Iran shipped over 2.5 million barrels per day of crude oil in April 2018, the month before Trump withdrew the US from the nuclear deal but monthly oil exports were down five times to 330,000 to 500,000 barrels per day in May, 2019. Oil made up 80% of Iran’s exports.
Ongoing estimates are that Iran could export between 200,000 to 550,000 bpd of oil but not all of the oil will be sold. Iran would likely maintain some shipments for debt repayment to China and India, and into storage in China, and smuggle a limited extra amount as it did under previous sanctions.
The US economic sanctions are cutting $42 billion per year of oil exports from Iran’s economy.
Iran’s nominal GDP reached a peak of $600 billion in 2012. Currently, Iran’s nominal GDP is about $330 billion. The nominal GDP is adjusted based upon the exchange rate.
Iran’s Oil Exports Down About 2 Million Barrels Per Day and US Oil Exports Are Up About the Same
The US has increased crude oil production from 10.5 million barrels per day in April 2018 to about 12.2 million barrels per day in May 2019.
The total US crude oil and oil products exports went from 6.6 million barrels per day in April 2018 to 8.8 million barrels per day in May 2019.
Iran’s Economy Driven into an Economic Depression
An economic depression is a decline in real GDP exceeding 10%, or a recession lasting 2 or more years.
The Iranian economy shrank by 3.9% in 2018 and the IMF forecasts another -6% GDP in 2019. The US will have driving Iran into an economic depression by both definitions. The total Iranian economy will decline by over 10% and there will be a recession longer than two years.
Iran’s currency, the rial, has dropped by 60% over the past year. Inflation is up to 37% and the cost of food and medicine has soared by 40% to 60%.
Iran’s youth unemployment rate is close to 30% in a country where almost 40% of the 80 million people are under 25.
The unemployment rate in Iran stood at 13.9% in 2018. Projections for 2019 and 2020 have been put at 15.4% and 16.1% respectively. Iran reported unemployment of only 12% in the latest quarter.
An Iranian parliamentary report from September 2018 warned that rising unemployment could threaten the country’s stability. The report also said that if Iran’s economic growth remained below 5% in the coming years, unemployment could hit 26%.
SOURCES- DW, Financial Tribune, EIA, Wikipedia
Written By Brian Wang, Nextbigfuture