Friday, June 29, 2012
Iran's Oil Exports Down 20-30 %; Export Land Model, Maybe?
Iran has publicly acknowledged that its oil exports are down between 20 and 30 percent. The article notes that it is due to the upcoming sanctions being placed upon it by the European Union. But I immediately thought of the Export-Land Model, which is a model that shows a marked decrease in oil exports when a nation that exports oil experiences both a peak in its oil production and an increase in its domestic oil production. In other words, a country will use more and more of its oil for domestic consumption rather than exporting it. An official for the Iranian oil company even admits it in the article; "It was 20 to 30 percent we reduce regarding to our export; some of the reduction is shifting for the refinery internally."
This New York Times graph from 2007 is of several countries, including Iran, whose oil consumption had shot up due to a booming economy. Of course, this means a lesser supply of oil for importers, including Europeans and us.