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U.S. Sanctions Halve Iran’s Oil Revenues

Iran’s oil revenues have halved since the U.S. imposed sanctions on the Islamic Republic in 2018, Turkish news agency Anadolu reported, citing an Instagram post of the governor of the Iranian Central Bank, Abdolnaser Hemmati.

According to the head of the central bank of Iran, the country’s revenues from oil sales have dropped from more than US$40 billion in 2018 to less than US$20 billion in 2019 and 2020. The central bank also had very limited access to those revenues, Hemmati said.

The U.S. sanctions on Iran’s oil exports have been an “unprecedented maximum pressure campaign” that has impacted every sector of the Iranian economy, he added.

As early as in 2019, Iran’s Oil Minister Bijan Zanganeh admitted that Iran’s oil industry had been dealt a “deadly blow” by the U.S. sanctions.

Earlier this week, Iran said that the U.S. should pay Tehran as much as US$70 billion as compensation for lost oil revenues due to the U.S. sanctions, as a prerequisite for a return to the nuclear deal.

Kamal Kharrazi, the chairman of Iran’s Strategic Council on Foreign Relations—a body advising Iran’s Supreme Leader Ayatollah Ali Khamenei—said this payment would be a prerequisite if U.S. President-elect Joe Biden wants to return to the so-called Iranian nuclear deal, according to the state-run Islamic Republic of Iran Broadcasting, quoted by Bloomberg.

President-elect Biden has pledged to offer Iran a path back to diplomacy and a return to the nuclear deal. If the U.S. and Iran return to a path of diplomacy, there is a chance that the strict U.S. sanctions on Iran’s oil exports could be eased, potentially paving the way for around 2 million bpd of Iranian crude oil exports returning to the market.  

Last month, Iranian authorities seemed confident they could be able to sell as much as 2.3 million bpd of oil in the next Iranian year that begins in March 2021, according to Iran’s budget bill.  

By Tsvetana Paraskova for Oilprice.com

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