OPEC Production Rises Again Despite Iran Sanctions

Crude oil production from members of the Organization of Petroleum Exporting Countries rose again in March as Iraq boosted exports, despite reports that threatened sanctions were already restricting Iranian output.

Crude production from the 12 members of the group was up by 145,000 barrels a day from February, at 31.705 million barrels a day, according to a Dow Jones Newswires survey of industry sources and analysts.

Saudi Arabian production continued to hover around record levels, but the biggest change on the previous month was an extra 252,000 barrels a day from Iraq , which commissioned a new offshore oil export terminal.

"Additional export capacity is now available after the first of four new crude export facilities was started off the coast of Basra ," said JBC Energy in a research note.

Iran 's oil production fell by just 30,000 barrels a day, to 3.44 million barrels a day. Despite reports that Iran 's exports were already being curtailed by Western sanctions intended to pressure the country over its nuclear program, analysts said there was little evidence of a major effect on production.

"We don't think Iran has curtailed production yet," said Samuel Ciszuk of KBC Energy Economics. Even if exports are constrained, Iran will continue to produce oil and put it into storage ships, he said.

"The big production hit is really coming in May," he said. "Pretty much everyone seems to be cutting [Iranian oil purchases] by 15%-20%," and the country's output will probably fall 700,000 barrels a day by July, he said.

Continued expansion of oil production from Libya , Nigeria and Iraq this year may mean that the world can absorb this loss of Iranian oil without having to lean too heavily on the spare production capacity of Saudi Arabia , Ciszuk said.