Iran is preparing to boost production and exports of crude oil as talks on the nuclear deal with the United States continue to progress, government officials said, as quoted by Bloomberg.
According to the report, Iran could return to a production level of 4 million bpd in as little as three months. What’s more, it could add to that figure millions of barrels of crude currently in storage, the report said.
At the moment, the National Iranian Oil Company is preparing fields for greater production, even though a deal is not certain at all. Even if signed, it will take a while for all hurdles the Trump administration placed on the way to Iranian oil to international markets to be removed.
“Our return may be a gradual process rather than swift and sudden -- it can’t happen overnight,” former NIOC official and Iran OPEC envoy Mohammad Ali Khatibi told Bloomberg in an interview. That’s not only because of U.S. sanctions but because of the damage to crude oil demand resulting from the coronavirus pandemic.
Even when the sanctions are lifted, some buyers may be reluctant to do business with Tehran, Khatibi also said, as quoted by Bloomberg. However, oil production will almost certainly grow, according to analysts.
No matter how the negotiations end, and no matter what happens to the Iranian oil industry after the end of the talks, Iran’s oil minister won’t be there to see it as he said he will be retiring later this year after the term of President Hassan Rouhani ends.
“If they offer me the presidency I won’t accept it, let alone the ministry,” Bijan Zanganeh told media, as quoted by Bloomberg. “I will retire, I won’t take another official post. But politics is life, you can’t separate yourself from it entirely.”
By Irina Slav for Oilprice.com
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Iran shouldn’t expect a lifting of US sanctions even by 2023 or ever. The reason is that its position and the United States’ are irreconcilable.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London