Iran to Hold Steady at Current Oil Output Levels, May Even Participate in Revived Production Freeze

by Ship & Bunker News Team
Monday May 9, 2016

Less than a day after it was learned that Iran had boosted its oil exports to pre-sanction levels, the Islamic Republic indicated it has no plans to increase exports from the current 2.2 million barrels per day (bpd) – and may in fact even participate in a renewed effort to curb global production.

When questioned by reporters whether Iran intends to increase exports to as high as 2.5 million bpd, Mohsen Qamsari, the director for international affairs of the National Iranian Oil Company (NIOC), replied that any new increase depends on market conditions and domestic capabilities.

Although some observers wonder whether Iran's exports are based on production growth or if the country is simply selling down inventory, on Wednesday Rokneddin Javadi, deputy oil minister for Iran stated that the output now stands at 3.7 million bpd and stressed that his country has already been able to return its production to pre-sanctions levels.

The following day Javadi declared on state television that "We welcome investors from all countries," referring to new industry contracts for international oil firms that will be ready by July.

As for the global glut and the persistent call for Organization of the Petroleum Exporting Countries members and non-members to agree to an output freeze, Javadi remarked that "Iran can get involved in any oil policy-making discussions after regaining its pre-sanctions oil output (level)."

He added, "I believe the next OPEC meeting will be a better meeting with more coordination."

Although Iran seems to be working overtime to be an accommodating world player, it is unwavering in protecting its own interests, as evidenced by its vow to close the strategic Strait of Hormuz to the United States if its military drills in the Persian Gulf are threatened.

But despite the sabre-rattling and other problems associated with the Islamic Republic, Christopher Helman, senior editor for Forbes, is enthusiastic about Iran returning to the international fold: "Unlike in Iraq and Saudi, Iran's new contracts would enable oil companies to book reserves and hold equity stakes in Iranian companies."