Iran’s oil production approaches maximum capacity despite US sanctions

Despite the sanctions imposed by USAIran’s oil production has reached almost its maximum capacity, reaching 3.4 million barrels per day, as reported by Bloomberg on October 4th.

That volume is just a few hundred thousand barrels below its previous peak. 3.9 million. The drop in Iranian production had been significant after President Donald Trump withdrew USA of the nuclear agreement JCPOA in 2018, when production fell to two million barrels per day.

Currently, Iran has found a main customer in China, selling most of its oil at reduced prices.

China has shown itself willing to disregard American sanctions that attempt to block sales of Iranian oil. According to Henning Gloystein e Greg Brewanalysts of Eurasia Group“Iran is experiencing export success thanks to a willing customer in China, the growing sophistication of illicit transportation channels, and relatively low U.S. interest in taking action.”

The geopolitical situation is even more complicated with Israel’s threats to attack Iranian oil infrastructure, amidst a scenario of heightened regional tensions.

These threats emerged after the Iran shoot close 400 ballistic missiles against Israel on October 1, in retaliation for the assassination of important leaders of Hamas and Hezbollah. This attack raised tensions in the region, with Israel threatening to bomb Iranian nuclear or oil facilities.

In a context of diplomatic negotiations, the Bloomberg also highlighted that progress had been made in the months leading up to the conflict, including prisoner exchanges and the unlocking of frozen assets, as well as a possible informal agreement on oil flows.

These developments would have occurred with the “tacit approvalyes White Houseunder the Joe Biden administration, which reportedly eased enforcement of sanctions to keep gas prices low.

The increase in sales of Iranian oil to China and Israeli threats introduce a new dynamic into global energy policy, influencing oil prices, which rose five percent following President Biden’s comments about Israel’s potential attack plans on the Iranian oil industry.