Iranian oil output will likely fall further from its lowest in three decades as the West tightens sanctions on the country, depriving Tehran of hard currency revenues, the International Energy Agency (IEA) said on Wednesday.
The IEA said in its monthly report that preliminary data suggested Iran's exports could have fallen below 1 million barrels per day in January due to lower Chinese and South Korean purchases after a rebound in December to 1.56 million bpd.
January production was hovering below three-decade lows at 2.65 million bpd, a decline of 50,000 from December, the IEA said.
The United States this month introduced new sanctions on Iran as part of a dispute over Tehran's nuclear programme.
The new sanctions effectively bar Iran from repatriating earnings from its oil exports, requiring customers to pay funds into an escrow account at a bank in the purchasing country and limiting Iran's use of the proceeds to buying goods in the countries where it exports its oil.
"For Iran, the latest expansion of sanctions is expected to further undermine government finances as its oil export earnings are now effectively locked in the buyers' countries," the IEA said.
It estimates that Iran lost over US$40 billion in export revenues in 2012 or about $3.4bn per month.
Iranian exports surprisingly hit a six-month high in December but the IEA said preliminary data for January suggested they could have fallen back to below 1 million as Chinese imports amounted to just over 200,000 bpd.
South Korea also appears to have reduced imports from Iran in January to 130,000 bpd from 185,000 bpd in December, the IEA said. It said, however, the low January estimate remained subject to revisions.
Iran and Western nations are due to hold a new round of talks over Tehran's disputed nuclear programme on February 26.
"Expectations, however, are low for a breakthrough in the more than decadelong dispute. Indeed, it is unlikely that progress will be made before Iran's June presidential elections," the IEA said.