Iran losing $133M a day on embargo

U.S.-led sanctions against Iran are costing OPEC’s third-largest producer $133 million a day in lost sales without raising global crude prices, according to data compiled by Bloomberg. Shipments from Iran have plunged by 1.2 million barrels a day—or 52%—since the sanctions banning the purchase, transport, financing and insuring of Iranian crude began July 1. Annualized, that would cost President Mahmoud Ahmadinejad’s country about $48 billion in revenue, equivalent to 10% of its economy. While Iran’s threats to disrupt the flow of oil through the Persian Gulf sent crude to a three-year high in March, increased production from Saudi Arabia, a U.S. output boom and the slowing global economy have left prices 0.7% lower in 2012. As a result, Iran has to contend with a weakening currency and rising unemployment. “It’s been an unqualified success,” says Mike Wittner, head of oil-market research for the Americas at Société Générale SA, of the embargo. “There were a lot of concerns sanctions could backfire by causing an oil-price spike, but in the end the U.S. and Europeans got their cake and they ate it too, because volumes are down and prices are down.” Read the full story here.