Iran set to increase oil output to pre-sanctions levels of 4 mn bpd

Iran is now ready to raise its oil output to 4 million barrels per day (bpd) in the coming two to three months depending on market demand, according to a senior official from the National Iranian Oil Company (NIOC).

NIOC director for international affairs Seyed Mohsen Ghamsari said at the Argus Crude Forum that the country can now increase production of crude oil based on market requirement.

The country’s plans to return output to pre-sanctions levels of more than 4 million bpd comes just ahead of an informal meeting later this month among members of the Organization of the Petroleum Exporting Countries (OPEC) in Algeria, where they are expected to seek to revive a deal on freezing global output.

As OPEC’s third-largest producer, Iran is currently producing a little over 3.8 million bpd, Ghamsari said.

Iran, anxious to increase exports after the international sanctions were lifted, declined to participate in attempts earlier this year by OPEC and non-OPEC oil exporters to reach an agreement to stabilize output levels by freezing production.

Tehran’s aggressive moves to recoup market share that was lost under international sanctions targeting its nuclear program has paid off in Asia, where its four biggest buyers raised their imports by 61% in July versus a year ago.

Iran is also eyeing shipping supplies to new Chinese crude buyers via trading company Trafigura.

NIOC is also looking to raise its production capacity to 4.3 million bpd in the first quarter next year and eventually reach 5 million bpd in two to three years, Ghamsari said, noting that the bulk of any new production would be heavy crude.

“We believe that the market is more in favor of heavier grades and that’s why we are going to introduce a new one.”