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ENB Pub Note: The story from Irina Slav at Oilprice.com below the line is an outstanding article. She is an excellent international energy expert. I am wondering about Israel’s attacking Iran’s nuclear sites without hitting Iran’s oil sites, and is this a coordinated response with the United States? Israel cannot hit Iran without the use of the United States’ military capabilities, so we should at least ask. In October of 2024, it was reported that Israel was going to strike the oil sites, and the U.S. would not help with the air refueling needed for the trip. So if Israel is going to strike the nuclear sites, we would at least connect the dots and look at the support request. I do not support going to war with Iran, and that being said, they should not be allowed to have a nuclear war program. This is a bit of a problem. It is the leaders of Iran, and not the people, so destroying the oil fields does cut off the money supply, but it also hurts the people of Iran. Stopping the nuclear program only is a tough call to make.
- Crude oil prices have significantly risen due to reports of a potential Israeli attack on Iranian nuclear facilities, as indicated by US intelligence.
- The possibility of an Israeli strike threatens to disrupt current US-Iran negotiations aimed at a new nuclear deal, potentially leading to a broader Middle Eastern conflict.
- There are varying perspectives within the US government regarding the likelihood of Israel following through with an attack, with the final decision potentially dependent on the outcome of Trump’s negotiations with Iran.
Crude oil prices rose sharply earlier today following reports on Tuesday that Israel had plans to attack Iranian nuclear facilities.
At the time of writing, Brent crude was trading at $66.37 per barrel, with West Texas Intermediate at $62.56 per barrel, after CNN reported late on Tuesday that new intelligence obtained by the U.S. suggested the Israeli government was considering strikes on Iranian nuclear sites.
“Such a strike would be a brazen break with President Donald Trump,” CNN reported, citing U.S. officials. The news comes amid negotiations on a new nuclear deal between Washington and Tehran that President Trump appears eager to seal and Iran is not opposed to the idea, either.
Yet a direct strike on Iran from Israel will wreak havoc on these negotiations and increase the risk of a broader Middle Eastern conflict yet again. This would in turn threaten to affect oil supply, triggering higher benchmark prices.
The threat of an escalation between Israel and Iran offset bearish news for oil such as the weekly inventory report of the American Petroleum Institute, which showed a build of 2.5 million barrels, and the news that Kazakhstan once again overproduced despite its OPEC+ quota. In May, the Central Asian country booked a 2% increase in oil output despite pressure from Saudi Arabia to fall in line.
Meanwhile, there appears to be disagreement in U.S. government about ow likely it was for Israel to follow through with its plans for a direct strike on Iran. Per the CNN report, officials believe the final decision would depend on the deal that Trump strikes with the Iranians, if he does succeed in striking that deal.
Even so, “the chance of an Israeli strike on an Iranian nuclear facility has gone up significantly in recent months,” CNN reported, quoting an unnamed official, who also added that “And the prospect of a Trump-negotiated US-Iran deal that doesn’t remove all of Iran’s uranium makes the chance of a strike more likely.”
By Irina Slav for Oilprice.com
Iran oil and gas production update and known reserves
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Current Production: As of January 2025, Iran produces approximately 3.28 million barrels per day (bpd) of crude oil, down slightly from 3.293 million bpd in December 2024.
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Historical Context: Production peaked at 6.02 million bpd in 1974, but post-1979 revolution, war, and sanctions reduced output. In 2023, Iran was OPEC’s fourth-largest crude oil producer, averaging around 3 million bpd, or ~3% of global output.
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Potential Capacity: With significant investment and modern technology, Iran could increase production to 4.2–4.7 million bpd if sanctions were lifted, potentially boosting exports by 500,000 to 1 million bpd.
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Challenges: Aging fields face decline rates of 8–12% annually, requiring gas injection and enhanced oil recovery (EOR) techniques. Only 20–25% of oil in place is currently extractable, compared to a global average of 35%.
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Current Production: In 2023, Iran produced 9.4 trillion cubic feet (Tcf) of dry natural gas, making it the world’s third-largest producer after the U.S. and Russia. This reflects a 64% increase from 2013 to 2023, driven by the South Pars field.
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Daily Output: Iran’s natural gas production is approximately 700 million cubic meters per day (mcm/d), with plans to reach 900 mcm/d by 2025, though earlier targets (e.g., 300 billion cubic meters annually by 2015) were not met.
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Constraints: Gas production is limited by insufficient reinjection (only ~30 mcm/d versus a needed 300 mcm/d) and lack of Western technology for complex fields like South Pars.
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Proven Reserves: As of 2016, Iran holds 157.53 billion barrels of proven oil reserves, ranking fourth globally and accounting for ~9.54% of the world’s total.
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Other Estimates:
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At the end of 2023, Iran accounted for 24% of Middle East oil reserves and 12% globally, with estimates ranging from 143–209 billion barrels depending on methodology.
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In 2006, the National Iranian Oil Company (NIOC) reported 138.4 billion barrels of recoverable liquid hydrocarbon reserves.
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Recent Discoveries: In 2024, Iran reported discovering 2.5 billion barrels of new crude oil and shale oil reserves.
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Longevity: At 2020 production rates, reserves could last 145 years without new discoveries. With current consumption (~1.8 million bpd), reserves equate to 239 years of supply if exports ceased.
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Proven Reserves: As of December 2023, Iran holds 1,200 Tcf (34 trillion cubic meters) of proven natural gas reserves, second only to Russia, representing 17% of global reserves and 45% of OPEC’s.
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Key Fields: The South Pars field, shared with Qatar, accounts for ~40% of Iran’s gas reserves and 19% of global reserves.
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Potential: Undiscovered gas resources are likely in regions like the Caspian Sea and Central Persian Gulf. Exploration success rates are high (~80% vs. a global 30–35%).
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Sanctions Impact: U.S. sanctions since 2018 have limited foreign investment and technology, capping production and exports. Despite this, Iran exported 1.61 million bpd of crude in March 2024, primarily to China.
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Technological Gaps: Low recovery rates (e.g., 6% at Azadegan) and inadequate gas reinjection leave vast reserves untapped. Advanced Western technology could add $550 billion per 1% increase in recovery rates.
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Domestic Consumption: Iran consumes ~1.8 million bpd of oil and relies heavily on gas for ~86% of electricity generation, straining resources.
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Strategic Goals: Iran aims to supply 7% of global oil by 2025 (5.6 million bpd), requiring massive investment ($200–500 billion).
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Oil Production: ~3.28 million bpd, with potential for 4.2–4.7 million bpd.
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Gas Production: ~9.4 Tcf/year (700 mcm/d), aiming for 900 mcm/d.
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Oil Reserves: ~157.53 billion barrels (proven), possibly up to 209 billion with new finds.
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Gas Reserves: ~1,200 Tcf, second-largest globally. Iran’s hydrocarbon wealth is vast, but realizing its full potential hinges on overcoming sanctions, modernizing infrastructure, and accessing advanced technology.
The post Oil Jumps on Possibility of Israeli Attack on Iran appeared first on Energy News Beat.
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