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Iranian oil output and exports rebound - IEA
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Monday, 19 Nov 2012
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Reuters reported that Iranian oil output rose in October after 7 months of decline due to Western sanctions and its exports rebounded strongly as China and South Korea bought more oil.

The International Energy Agency adviser to industrialized nations on energy policy said that the rebound in Iranian output was adding to a bearish picture of growing oil supply while demand remained depressed due to a weak global economy.

The IEA said that a new round of sanctions against Iran was likely to further cripple its finances although not necessarily further reduce its oil deliveries to markets. With the bulk of Iranian crude now heading to Asia, however, the main impact of the new EU measures will likely be on the country's financial sector.

Iran's finances have been drastically stretched since US and EU sanctions more than halved its oil exports compared to last year undermining its budget and leading to a spike in inflation and a sharp weakening of its currency. The sanctions are part of a stand off between the West and Iran over Islamic Republic's nuclear program.

The European Union further broadened the sanctions against Iran's energy and banking industries in October in a bid to bring Iran back to the negotiating table.

The IEA said that Iranian oil output rose by around 70,000 barrels per day to 2.7 million barrels per day in October. Iranian exports jumped to 1.3 million barrels per day from 1.0 million seen in the two previous months. China and South Korea appear to account for the lion's share of the increase in Iranian imports.

The rebound in Iranian exports added to a comfortable global supply picture as demand remained depressed further reducing pressure on OPEC to maintain high production levels.

Global oil supply rose by 800,000 barrels per day in October MoM to 90.9 million barrels per day due to a rebound in supplies from the Americas and the North Sea. That offset a slight decline in OPEC crude supplies, mainly on the back of disruptions in Nigeria, which saw output tumble to two and a half year lows.

Source - Reuters

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