Iran to Double Crude Oil Exports to Pre-sanctions Output
Iran plans to 2X Crude Oil exports so long as the increase in shipments is absorbed by global markets, which it sees as stable for the rest of the year, according to a senior official at state-run National Iranian Oil Co.
The country is exporting about 2-M bbls of its daily output of 3.8-M bbls, said Mohsen Ghamsari, NIOC’s director of international affairs. It has regained about 80% of the market share it held before the US and EU tightened sanctions on its Oil industry in Y 2012, he said. Iran plans to double Crude Oil exports.
“We are not very far away from our pre-sanctions peak and we will soon attain that share,” Mr. Ghamsari said Tuesday in an interview in Tehran. “Our exports peak is above 4-M barrels a day, and we have plans for that and are waiting for the right conditions,” he said, without elaborating on the timing for such an increase.
The Persian Gulf nation is seeking more than $100-B in investment from international partners to upgrade its Oil industry and reclaim its position as the 2nd-biggest producer in the Organization of Petroleum Exporting Countries (OPEC), after Saudi Arabia.
Iran targets 5.8-M BPD in combined production of Crude Oil and condensates by Y 2021. It defied skeptics with a 25% rise in production so far in Y 2016 and aims to reach an 8-year high for daily output of 4-M BPD by the end of this year.
Benchmark Brent Crude, which averaged more than 99 bbl in Y 2014, fell to a 12-year low of about 27 in January on the global supply glut. It fell as much at 1.8% to 45.90 bbl and traded at 46.13 at 11:30a in London Tuesday.
“The market will stay on its present balance, and a return to prices below 30 bbl is not very probable, at least in the current year,” Mr. Ghamsari said. “Our policy is not to stockpile Oil in floating offshore storage. In other words, we produce as much as we think the market would absorb.”
Iran is shipping about 25% of its exports to European buyers, he said. NIOC is selling bigger volumes in Asia, though it has not increased the number of supply contracts in that region, he said.
“Most of our Oil transactions and agreements are long-term-based, leaving a small portion for spot sale,” Mr. Ghamsari said. “We are right now in negotiations with many companies, both in Europe and Asia,” he said, without identifying any of them. Iran is taking payments for some sales in euros, he said.
The US still prohibits transactions related to Iran from being conducted in USDs, accusing the Islamic Republic of abusing human rights and sponsoring terrorism. Even so, Oil Minister Bijan Namdar Zanganeh predicted in June that Iran would sign its 1st dollar deals with foreign companies within 3 months.