Iran's oil output is moving away from a 20-month high reached earlier this year. Nevertheless, with OPEC expecting growing demand for its crude, Iran says it's ready to make its presence known on the international oil stage.
Iran is serious about achieving a position on the international stage that's reflective of its reserve potential, the country’s oil minister, Bijan Zanganeh, told an international energy summit in Moscow.
Zanganeh, a career official in the Iranian energy sector, said challenges of long-term energy security have come into question, though with what he says is 157 billion barrels of crude oil in place, the Islamic republic is up to the task.
Iran has touted its oil potential since agreeing last November to curb some of its nuclear activity in exchange for modest relief from Western sanctions. In January, a senior U.S. official said during a background briefing that doesn't mean Iran is open for business.
"Quite to the contrary," the official said. "The overwhelming majority of our sanctions and the basic structure of oil and banking and financial sanctions remain in place, and the administration is committed to aggressively enforcing those sanctions."
Iran, however, has exported more oil than it said it would in November, when it agreed to keep things at the 1 million barrel per day (bpd) mark. The International Energy Agency (IEA) said Iran exported about 1.65 million bpd in February, its highest level in more than two years. Exports from Iran, the Paris-based energy agency said, were "well above" last year's totals.
Abdalla el-Badri, secretary-general of the Organization of Petroleum Exporting Countries (OPEC), said at the Moscow energy summit that global demand for oil should increase by around 20 million bpd by 2035 and as much of 90 percent of that should come from developing Asian economies.
IEA said much of the increase in demand for Iranian crude oil came from China, India and South Korea. Japan, however, was taking on less Iranian oil.
In early May, Zanganeh said it was nobody’s business but Iran's how much oil it exported. Sounding defiant, last week he said the international energy market shouldn't be constricted by "politics and sanctions.”
In its latest report, IEA said Iranian oil export levels were closer to the November limit. OPEC, meanwhile, will need to step up its game to meeting growing demand for oil as stockpiles continue to slide, the Paris-based agency said.
For Iran, that means the door is now open. Zanganeh said Iran aims to expand its oil potential as much as possible and OPEC will have to make room, sanctions be damned.
"I am sure they will do it," he said. "They have told me directly face-to-face that they will go along with us and make room for Iranians."
By Daniel J. Graeber of Oilprice.com