Exports of Iranian oil appear to be slowing down this month. Buyers are preparing for new sanctions and shipments for the country are likely to be less if President Barack Obama decides, which is likely he will, that markets will adjust to less oil from Iran.
At the end of this month, three months before the European Union oil embargo is scheduled to take effect, the amount of oil exported from Iran is expected to drop by over 300,000 barrels per day from February. At that point, Iranian oil exports will be at a level of 1.9 million barrels per day, representing a 14% decrease.
Even more measures are due that will be even more aggressive towards Iran. Leaders from the U.S. and the EU said new sanctions that could cut off 50% of the output of oil from Iran if Iran does not reel in its nuclear program.
Iran, on the other hand, may hold off compromising with the West betting on the sanctions causing the price of oil to jump so much that the income generated by fewer barrels will still hold steady, while the West fights with higher costs.
Unless Obama changes his plans, the sanctions by the U.S. to cut off the central bank of Iran and not allow it to act as a clearinghouse for their oil sales will take effect in June. The EU embargo will also take effect almost simultaneously, although many buyers in Europe have already cut back purchases.