Iran Will Exert ‘Every Effort’ to Export Oil as Sanctions Loom

(Bloomberg) -- Iran will keep selling oil in spite of an expected resumption of U.S. sanctions on the country’s crude shipments, President Hassan Rouhani said.

The Islamic Republic is “facing an economic and psychological war, and oil, gas and petrochemicals are in the front line,” Rouhani said in a speech on Tuesday. “We will make every effort to continue to produce and export oil, though there may be some ups and downs.”

Iran’s crude output declined 6.4 percent to 3.5 million barrels a day last month, the biggest drop among its peers in the Organization of Petroleum Exporting Countries, data compiled by Bloomberg show. Even though sanctions on its oil exports don’t officially take effect until Nov. 4, some customers are already turning away as the U.S. imposes penalties on buyers after President Donald Trump quit a 2015 nuclear accord with the Persian Gulf country.

The rial weakened on Monday, with exchange houses in downtown Tehran pricing the dollar at between 118,000 rials and 121,000 rials, roughly a 9 percent drop from Sunday. The slide was the biggest since early August and could intensify the pressure on Rouhani’s government, which faces discontent over rising prices as sanctions loom.

Iran is pushing ahead with some projects, starting three petrochemical plants on Tuesday. It will open six more facilities by 2020, and the petrochemical industry has “a huge responsibility in meeting the country’s foreign exchange demand,” Rouhani said.

©2018 Bloomberg L.P.