Iran has started ramping up its crude oil production eyeing a return to pre-sanction levels in a month or two, Deputy Oil Minister Amir Hossein Zamaninia told media, as quoted by Bloomberg.
Zamaninia added that the market would be able to swallow the additional volumes, which could bring Iran's total to somewhere between 3.9 million and 4 million bpd.
The news comes as Tehran hopes the new U.S. administration would lift sanctions imposed by the Trump administration on the country after it pulled the U.S. out of the so-called Iran nuclear deal. Hopes are President Biden would be willing to renegotiate the deal in a mutually beneficial way.
Higher Iranian oil production would not be welcome by the country's fellow OPEC members who have been cutting their own production to prop up prices. Indeed, the report immediately pressured international benchmarks, with Brent crude and West Texas Intermediate dropping by more than 2 percent at the time of writing.
Meanwhile, to add insult to injury, Oil Minister Bijan Zanganeh said Iran's oil exports were also on the rise, despite the sanctions.
"We set the highest record of exports of refined products in the history of the oil industry during the embargo period," Zanganeh said, as quoted by news agency Shana via Reuters.
Zanganeh added, in response to media questions, "I am not worried about regaining Iran's lost oil market share, and oil buyers do not limit themselves to one or two sellers." If the U.S. sanctions were lifted, he said, "We will return to the market stronger than before, sooner than you might think."
Zanganeh said last month that Iran aimed to boost oil exports to 2.3 million bpd once sanctions were lifted, from less than 1 million bpd right now, according to official data. The situation remains tricky, however, as both sides want the other one to make the first move.
President Biden's nominee for the Treasury Janet Yellen recently said the U.S. will only remove the sanctions if Iran returns to its commitments under the nuclear deal, while Tehran insists that Washington first lifts the sanctions before it re-commits to the deal.
By Irina Slav for Oilprice.com
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