لخّصلي

Iran's petroleum and other liquids production increased from under 3.0 million b/d in 2020 to 4.0 million b/d in 2023, comprising nearly 2.9 million b/d of crude oil. However, US sanctions imposed in 2018 significantly impacted crude oil exports and production. The 2023 increase followed global demand recovery and increased Chinese imports of discounted Iranian crude. Lifting sanctions could boost crude oil production to 3.8 million b/d within six months. Due to sanctions limiting foreign investment, Iran relies on local companies for oil field development, resulting in slow progress on projects aimed at increasing capacity by 550,000 b/d from existing fields (2019-2022) and further development in West Karun (including Azadegan). New production from Jufair and Sepehr fields in West Karun began in March 2024, reaching 50,000 b/d initially, with a projected 110,000 b/d capacity. A preliminary agreement with Russia aims to support Iran's oil and gas sectors. Iran's oil consumption reached a record high of 2.2 million b/d in 2023 due to subsidized gasoline and increased petrochemical production. Existing refining capacity (2.1 million b/d crude oil and 0.6 million b/d condensate) is being expanded, including a new 210,000 b/d unit at Abadan refinery, but sanctions hinder progress on proposed projects. While Iran possesses significant oil-loading capacity, the new Jask export facility, bypassing the Strait of Hormuz, is under construction and faces operational delays, currently transporting only 300,000 b/d instead of its 1 million b/d capacity.

Petroleum and Other Liquids
• Total petroleum and other liquids production in Iran rose from a recent annual low of
less than 3.0 million b/d in 2020 to an average of 4.0 million b/d in 2023. Of this 4.0
million b/d, almost 2.9 million b/d was crude oil, and the remainder was condensate and
hydrocarbon gas liquids. Iran's crude oil exports and production have declined since the
United States announced in May 2018 that it would withdraw from the Joint
Comprehensive Plan of Action (JCPOA) and reinstate sanctions targeting Iran’s oil
exports (Figure 4). In 2023, Iran increased crude oil production by about 915,000 b/d
from 2020 after global oil demand recovered from the effects of the COVID-19
pandemic and China began to import more discounted crude oil from Iran.
10 We assess
that Iran’s crude oil production could increase to 3.8 million b/d within six months after
the sanctions have been lifted.
• Iran plans to sustain production capacity at fields with high decline rates through
development of new wells and redevelopment of existing wells.
11 The lack of foreign
investment during the past few years due to sanctions prompted Iran to turn to local
companies to develop its oil projects. However, local firms are limited in the capital and
technology they need to maintain production at mature fields, and projects awarded
contracts in 2019 and beyond have progressed very slowly.
12 Between 2019 and 2022,
Iran awarded several contracts to domestic companies to add about 550,000 b/d of
crude oil production capacity from existing fields located in the country’s southwestern
region.
13 Iran intends to develop the West Karun oil fields located along the border with Iraq (including Azadegan, Yadavaran, and Yaran), but these projects have made limited
progress over the past several years. In March 2024, Iran’s national oil company (NIOC)
awarded more contracts to local energy companies to increase oil production capacity
at six oil fields along the border with Iraq, including one of Iran’s largest fields,
Azadegan.
14
• Iranian energy firm Pasargad Energy Development Company began production from two
new oil fields located in the West Karun oil region in March 2024—Jufair and Sepehr.
Iran estimates that current production from the fields is 50,000 b/d, and production
capacity will reach 110,000 b/d, with no specific deadline.
15
• In 2022, Iran signed a preliminary agreement with Russia, in part, to help finance and
develop its oil and natural gas sectors. This agreement must overcome several
challenges related to negotiating details and implementing projects.16
• Iran was the 10th
-largest oil consumer in the world and the second largest in the Middle
East after Saudi Arabia in 2023.
17 After Iran’s oil consumption returned to pre-COVID
pandemic levels in 2021, it reached a record high of 2.2 million b/d in 2023 (Figure 4)
because of significantly subsidized gasoline prices and higher vehicle sales that boosted
gasoline demand and because of growing petrochemical production that uses
petroleum products and natural gas as feedstocks. Use of petroleum and petroleum
products will likely face competition from natural gas, particularly in the electric power,
residential, and commercial sectors, during the next several years, especially if exports
of petroleum and petroleum products continue to increase.18
• As of the beginning of 2024, Iran’s total crude oil distillation capacity was an estimated
2.1 million b/d, and its condensate splitter capacity was 0.6 million b/d. The Persian Gulf
Star condensate refinery, which processes condensates from Iran’s South Pars natural
gas field and is Iran’s largest condensate refinery, came online in phases from 2017
through 2020 and has a crude oil processing capacity of 420,000 b/d.19 More processing
capacity to produce lighter petroleum products, such as gasoline and diesel, allowed
Iran to substantially increase its gasoline output to meet its rising demand in the
transportation sector. Despite this growing processing capacity, Iran still relies on
gasoline imports due to the country’s increasing oil demand and largely outdated and
inefficient refineries that produce mostly lower-valued fuel oil.
20
• Although Iran has proposed several refinery projects that are in various stages of
planning and development to replace some of its older units, international sanctions on
Iran have hindered some of the investment needed to complete these facilities within
the next few years.21 Despite sanctions, Iran has made some progress in increasing its
refining capacity to help boost production of middle distillates, such as gasoline and
diesel fuel. Iran added a 210,000-b/d crude oil distillation unit to its existing Abadan
refinery in March 2023 to be able to eventually replace one of the older units and
alleviate some of the demand for lighter oil products. Operations will continue at the old
unit at Abadan while sanctions remain in place. Upcoming projects under construction
are another 120,000-b/d unit of Persian Gulf Star and the 60,000-b/d South Adish
condensate refinery. Iran’s oil ministry expects these facilities to fully come online by
2027, although parts of the refineries could be operational by late 2025.
22 At its Isfahan
refinery, Iran intends to revive a 45,000-b/d retired secondary unit as a crude oil
distillation unit in 2024.23
• Although Iran’s total oil-loading capacity for exports (more than 8.0 million b/d)24 is
significantly higher than its oil production capacity, Iran is building the Jask oil export facility, located east of the Strait of Hormuz. This new facility allows Iran’s exports to
bypass any disruption that may occur within the Persian Gulf or the Strait. Contractors
completed the first phase of the Goureh-Jask pipeline, which began transporting crude
oil from fields in Goureh, Iran, to the Jask terminal in 2021. Although the pipeline’s
nameplate capacity is 1.0 million b/d, it can transport only 300,000 b/d as of mid-
2024.
25 Iran exported a single cargo in July 2021, but it has not used the pipeline for
crude oil exports since then, according to data from the tanker tracking company
Vortexa.26 The project’s pumping stations, storage tanks, loading points, and power
generation facility are all under construction and could enter service at the earliest in
2025.