Oil-importing countries purchased nearly one million barrels per day (bpd) less crude from Iran in April and May than in late 2011 as the tightening of sanctions against the country start to bite
In its latest monthly oil market report, the IEA said, "Preliminary April and May data on imports of Iranian crude are nearly one million bpd below late-2011 levels, and close to the market impact we have assumed since sanctions were first tightened."
The IEA added that Iran had kept output steady in May at 3.3 million bpd compared with April.
A European Union (EU) embargo on the import of Iranian oil is due to come into effect on July 1, 2012, while the US is also implementing its own sanctions against Iran, which will aim to encourage the country's crude buyers to reduce their purchases from Iran.
"Implementation of full sanctions is assumed to ultimately lead to a [production] cut of some 1 million bpd in Iranian supplies in H2 2012 as storage tanks both onshore and offshore reach maximum capacity unless the country finds alternative outlets," the report noted.
The IEA report showed that European buyers had halved imports from Iran to around 300,000 bpd in May and that the buyers had already started looking at alternative crudes available in the region.
European buyers have increased imports of Iraqi Basrah Light crude to around 450,000 bpd in May, up from an average 100,000 bpd in the first four months of this year, according to the report.
