Iran plans to ramp up its crude oil exports even though negotiations with the United States on its nuclear deal are currently paused.
"Good things will happen regarding Iran's oil sales in the coming months," the country's new oil minister, Javad Owji said on Iranian television as quoted by Trade Winds, in the latest demonstration that Iran is pursuing its oil production growth plans despite continued U.S. sanctions.
"There is strong will in Iran to increase oil exports despite the unjust and illegal U.S. sanctions," Owji also said, as quoted by Reuters, adding that "Iran will return to its pre-sanctions crude production level as soon as U.S. sanctions on Iran are lifted."
The U.S. sanctions, reimposed on Iran by the Trump administration and maintained so far by his successor, have decimated Iran's crude oil production and exports. The latter fell from an estimated 2.8 million bpd in 2018 before the sanctions snapped back to as little as 200,000 bpd, according to Reuters.
Regarding production, the U.S. Energy Information Administration recently published an update on Iran, estimating that the country last year pumped less than 2 million bpd, which was the lowest production rate in four decades.
Outgoing Iranian oil minister Bijan Zanganeh said last month that the country had lost $120 billion from oil export revenues because of the U.S. sanctions, as they prevented it from exporting some 2 billion barrels of crude.
Earlier this year, an official from the National Iranian Oil Company said that Iran could ramp up production to levels close to pre-sanction output within a month after the sanctions are lifted and then to full pre-sanction levels within three months. This would mean total production of 3.3 million bpd and a production capacity boost to 4 million bpd, the official told Iranian media in June.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
Comments
Iran, however, has never managed to fulfil its OPEC-approved production quota of 4.0 mbd.
When it comes to exports, Iranian crude oil exports averaged 1.617 mbd during 2014-2018 according to OPEC Annual Statistical Bulletin. Iran has never ever managed to export 2.8 mbd before the sanctions as the author of the article claimed. The only time Iran exceeded that figure was in the 1970s during the Shah regime.
Iran is reported to be currently exporting an estimated 1.5 mbd or 71% of its highest pre-sanction exports of 2.125 mbd of which China accounts for 1.0 mbd with the balance going to India and Turkey.
I don’t think a lifting of US sanctions will see the light of day ever because the positions of the United States and Iran are irreconcilable. The only nuclear deal acceptable to Iran’s hardline government is one on its own terms.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London