Some critics suspect the Islamic Republic is merely selling down inventory.
A landmark that has caused considerable anxiety amongst the international oil producing community may have been reached this week with the announcement that Iran has boosted its oil exports to 2.1 million barrels per day (bpd), a level equal to its pre-sanction output.
The announcement was made by the Islamic Republic News Agency and pertains to crude oil exports for the Iranian month, which began April 20.
However, some observers question whether the exports are based on production growth "or whether the country is simply selling down inventory from its 25 million barrels of onshore storage capacity and 20 million barrels or so of floating storage," writes Christopher Helman, senior editor for Forbes.
We continue to believe these export levels are unsustainable
Other analysts doubt the Iranians can keep up this level of output. "We continue to believe these export levels are unsustainable and tie back to inventories being run down rather than all being due to underlying production levels surging," Energy Aspects wrote in a report this week.
Still, Helman thinks that no matter what is driving the output, the Iranians are serious about retrieving their pre-sanctions status, and he points out that its oil ministry has just announced it will have new contracts for international oil companies to bid on by July: "Unlike in Iraq and Saudi, Iran's new contracts would enable oil companies to book reserves and hold equity stakes in Iranian companies."
Iran may be coming back into the fold, but decidedly on its own terms: in March it was reported that some former buyers are staying away from the Islamic Republic due to its inflexibility regarding prices.