Iran plans to boost its crude oil production to 4 million barrels per day (bpd) in the new Persian year that started this week, Mohsen Khojasteh Mehr, chief executive of the National Iranian Oil Company (NIOC), said on Thursday, Iran's Fars News Agency reported.
Iranian oil production has slumped since former U.S. President Donald Trump withdrew from the so-called Iranian nuclear deal and imposed sanctions on the Islamic Republic's oil exports.
In February, Iran's crude oil production was at 2.546 million bpd, up by 44,000 bpd compared to January, according to secondary sources in OPEC's latest Monthly Oil Market Report.
As the ongoing talks in Vienna are reportedly in their critical final stage, Iran is now planning for a production boost.
The key area of development will be the West Karoun cluster of oilfields, according to the national oil company's top executive.
The development of the West Karoun cluster will need $12 billion in investment, including $8 billion for shared fields, Khojasteh Mehr said as carried by Fars News Agency.
"Our priority is development and maximum production of shared fields," he said. "Our vision for 1401 [the new Persian year] is to increase production capacity, which we hope to reach over 4 million barrels per day."
Meanwhile, Iran's Foreign Minister Hossein Amirabdollahian said earlier this week that the Islamic Republic and the world powers "are closer than ever" to reaching the agreement after nearly a year of talks.
"We believe that today we are closer to an agreement in Vienna than ever before," Reuters quoted Amirabdollahian as saying on Wednesday.
The U.S. State Department, for its part, said on Monday that a return to the nuclear deal was neither certain nor imminent.
The legitimate return of Iranian oil is one of the few bearish factors in today's oil market, which has been rattled by the Russian war in Ukraine and the loss of Russian supply through sanctions and buyers' "self-sanctioning."
Still, it will likely take months for Iran to significantly boost its oil exports, when and if allowed, analysts warn.
By Charles Kennedy for Oilprice.com
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Comments
It will take Iran at least 4-5 years to raise its post-sanctions production to 4.0 mbd.
And despite positive statements that a new Iranian nuclear deal is close, I don’t think we will see one soon. The only deal Iran is prepared to accept is one on its own terms meaning a lifting of all US sanctions against it first with no new limitations on its nuclear and ballistic missile development programmes. This the United States egged by Israel can’t accept.
Iranian negotiators sense that the United States is in a great hurry to reach a deal so as to focus all its energies on China and the evolving Ukraine conflict and also to increase global oil supplies to depress crude oil prices. That is why they are dragging their feet so as to extract more major concessions from the United States including the reported US-offered concession of removing the Iranian Islamic Revolutionary Guard from the terrorist list.
If a deal is reached, the maximum additional crude oil Iran can bring to the global oil market is 650,000 barrels a day (b/d) being the difference between its pre-sanctions and post sanctions crude exports.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London