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OPEC Sees Sanctions Taking Toll on Iran Oil Production
(New York Times) Thomas Erdbrink - Oil production, the backbone of Iran's economy, fell by 12% in the first three months of 2012 and is likely to fall even more, industry experts say, as sanctions make it increasingly hard for the country to find markets for its crude. The decline, documented in a May report by OPEC, is sharply at odds with statistics provided by Iran's Oil Ministry that register no significant change in output. Once its storage capacity is exhausted, Iran will be forced to shut down some of its production, a potentially disastrous step that it is trying to avoid, analysts say. "Closing off valves sounds easy," but the consequences can be extremely damaging, said Reza Zandi, an oil specialist writing for Shargh, a newspaper that is critical of the government. "Technically it wrecks the oil wells, and we will never be able to bring their output back to previous levels."