Sanctions cause Iranian oil extraction to drop

Iran has reduced oil extraction to a 10-year minimum due to US sanctions. A further reduction of extraction may be expected, Gazeta.ru reports.

Oil extraction dropped by 50,000 barrels daily to 3.38 million barrels daily. Such low rate was registered in late 2002.

80% of Iran’s income comes from oil exports. The EU embargo on Iranian oil comes into force on July 1. Iran may need to cut oil extraction threefold and close some oil wells. Extraction may drop to the same level as during the Iranian-Iraqi War.

World oil prices increased by 20% in December 2011, despite Saudi Arabia’s increase of production to the 30-year peak.

US President Barack Obama and British Prime Minister David Cameron said that they are ready to open strategic reserves to prevent rise of oil prices.