EIA estimates that Iran’s crude oil production averaged 2.8 million bbl/d in 2013, down from nearly 3.7 million bbl/d in 2011. Iran's crude oil production and exports declined significantly as a result of sanctions that have reduced Iran’s ability to carry out investment in oil projects necessary to offset the natural declines in production and sanctions that have adversely affected the country’s ability to sell oil. The Joint Plan of Action (JPA) announced on November 24, 2013 (implementation started on January 20, 2014) does not remove the core sanctions affecting Iran’s oil sector, although it does suspend sanctions on associated insurance and transportation services. However, those countries continuing to import oil from Iran had already found workarounds to the insurance ban.
EIA’s outlook for Iran’s crude oil production remains unchanged and assumes a steady decline into 2015, as existing sanctions inhibit the country’s ability to carry out investment projects that are necessary to offset natural decline in production from existing wells. EIA believes that Iran’s ability to sell more oil and thereby increase production will be closely tied to the outcome of the negotiations between Iran and the five permanent members of the United Nations Security Council (the United States, United Kingdom, France, Russia, and China) plus Germany (P5+1) and the level of oil-related sanctions that the United States and the European Union maintain. EIA will continue to monitor and evaluate the situation, particularly changes to Iran’s monthly volume of crude oil exports, and make adjustments to the forecast as necessary.