(NEW YORK) — There is further evidence that financial sanctions and an embargo on Iranian oil imposed by the U.S. and the European Union are having a crippling effect on Iran’s economy. The sanctions were imposed to compel Tehran to negotiate its nuclear program.
A report released by the International Energy Agency shows Iranian exported 1.3 million barrels per day in October, down from an average of 2.3 million barrels per day last year.
According to The Telegraph, the decline represents a daily revenue loss of $109 million at the current price of oil. That adds up to $33 billion in losses so far this year. That $33 billion represents approximately 30 percent of Tehran’s government’s budget for 2012/2013.
The drop in oil exports is a direct result of the embargo and financial sanctions that make it harder for Iran to insure its tankers and get paid for oil sales.
In addition to falling oil exports, the country’s oil production total has also dropped dramatically. This past June, Iran was the second-biggest oil producer in OPEC, behind Saudi Arabia. In October, it fell to fourth place, behind Iraq and Kuwait, and continues to fall.
The loss of oil revenue has forced Iranian President Mahmoud Ahmadinejad to slash government subsidies on a number of everyday essentials, including food and cheap gas prices for Iranian citizens.
Iran’s parliament was scheduled to discuss the subject of subsidy reform on Tuesday but delayed the discussion until March 2013.
Copyright 2012 ABC News Radio
Paul Cruickshank and Michael Pearson, CNN