The Organization of Petroleum Exporting Countries (OPEC) pumped out more crude than it has in three years last month as it raised output by 100,700 barrels per day to 31.5 million, Bloomberg reports.
The gains were reportedly largely attributed to the deal made last month lifting sanctions against Iran, who were said to have raised production to the highest level since sanctions were strengthened in 2012, and come despite the fact that Saudi Arabia cut production levels in the latter months of the summer.
“Iran has been rising slowly but surely for a while now,” said Abhishek Deshpande, an analyst at Natixis SA, adding that the "bulk of the increase" is expected once the sanctions deal is final.
“It doesn’t need foreign investment to revamp existing infrastructure and prepare fields, resulting in the small increases you can see now."
According to OPEC data, Iran increased production levels in July by 32,300 barrels per day to 2.86 million.
The increase has boosted fears at a time when crude oil prices have slipped below $45 per barrel, though OPEC said it expects supply and demand fundamentals to improve.
“Crude oil demand in the coming months should continue to improve and, thus, gradually reduce the imbalance in oil supply-demand,” said OPEC's secretariat in a report.
Late last month, Iran also sought to dispel rumours that an estimated 40-50 million barrels being kept in storage were crude oil.