Iran's oil production slumps, EIA says

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WASHINGTON, July 11 (UPI) -- Iranian crude oil production should continue a steady decline by around 1 million barrels per day by year's end, the U.S. Energy Department predicts.

The U.S. Energy Department's Energy Information Administration notes Iranian crude oil production has declined steadily since the end of 2011. The EIA stated, in its monthly short-term energy outlook, that Iran's crude oil production capacity is likely curtailed by its inability to carry out investment projects.

"EIA expects Iran's crude oil production to fall by about 1 million bpd by the end of 2012 relative to an estimated output level of 3.6 million bpd at the end of 2011, and by an additional 200,000 bpd in 2013," the report read.

Some international oil companies have abandoned work in Iran because of previous economic sanctions enacted by the U.S. government. New U.S. and European sanctions put a further strain on Iranian oil production, the EIA states.

"U.S. financial sanctions and EU insurance provisions have also impeded other countries' transactions for Iranian oil, leading to reports that Iran's ability to produce oil has outstripped its ability to sell it," the EIA's report read.

Iran is ranked 3rd among members of the Organization of Petroleum Exporting Countries in terms of proven crude oil reserves as of 2010.

The EIA said it based its assessment on commercial data and officials Iranian statements. It cautioned, however, that its evaluation was a "tentative interpretation of a very fluid situation."