The Iranian oil sector continues to deteriorate, as the U.S. economic sanctions on Iran increase. The sanctions have entered their second year, where 70% of employees in the oil sector lost their jobs.
The U.S.-Iranian tensions are very obvious in Iraq, where U.S. soldiers are being targeted by Iraqi militias backed by Tehran, which forced the U.S. to send an air defense system to Iraq for protecting its troops.
Financial documents and testimonies of sources involved in the oil industry in Iran show that one quarter of Iran’s oil drilling platforms are inactive now due to the stifling sanctions on the oil industry, predicting a big blow to this sector in the long run.
The decline in drilling activities is likely to affect Iran’s ability to produce oil from older fields, which requires continued pumping to maintain the level of pressure and production as an OPEC member.
This will make it difficult for Iran to increase production to its level prior to the sanctions if tension with U.S. eased. The US sanctions aim at limiting Iran’s nuclear ambitions and regional influence which destabilize the region’s security.
These sanctions have forced Iran to reduce its oil production by half since 2018, to become less than two million barrels per day, as world refineries have stopped buying Iranian oil.
The significant decrease in production and exports increased the recession in the country and affected the main source of income. Moreover, many Iranian drilling companies dismissed large numbers of workers.
The number of workers in the National Iranian Drilling Company NIDC, has been reduced to 2800 workers in 2019, while they were 9300 workers in 2017, which means that 70% of the employees have lost their jobs, according to the company’s seasonal report.
This represents a major change in the industry boom witnessed following an agreement with former U.S. President Barack Obama’s administration, wits its agreement of lifting oil and financial sanctions in 2016, where the number of platforms increased from 130 to 157.
Reuters has obtained information from oil industry sources, drilling companies’ websites and quarterly financial reports, showing at least 40 of the approximately 160 drilling platforms in Iran are still inactive or under repair.
The NIDC, which belongs to the National Iranian Oil Company, operates slightly less than half of Iran’s platforms.
Military Pressures
The U.S. intends to lock Iran between economic war and military pressure, as the commander of U.S. Central Command declared Tuesday, that the U.S. is to send air defense systems to Iraq to protect the U.S. soldiers in case of any Iranian attack.
“We are willing to send air defense systems and anti-ballistic missile systems to Iraq in particular, protecting ourselves from any other possible Iranian attack,” G. Kenneth F. McKenzie said in a session for the armed forces in the US Congress.
It’s worthwhile that the Pentagon has announced seeking permission from Iraq to transfer Patriot missile defense systems, to bolster the defense of U.S. forces in Iraq following an Iranian missile attack on January 8.
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