Iran can boost its crude oil production to as much as 6.5 million barrels per day (bpd) when the U.S. sanctions on its oil industry are lifted, Iranian Oil Minister Bijan Zanganeh was quoted as saying on Monday.
Iran currently pumps around 2.5 million bpd and last produced close to the 6-million-bpd mark in the early 1970s.
When the sanctions are lifted, the Islamic Republic could increase its production to over 6 million bpd, according to the oil ministry’s website quoted by Reuters.
“The next Iranian government should make it a top priority to raise oil production to 6.5 million barrels a day,” Zanganeh said in Tehran on Monday, Bloomberg reported. Higher oil production will also give Iran more political clout, according to the minister.
Iran currently exports some of its oil, mostly to China, in defiance of the U.S. sanctions, but it is preparing to boost those exports to 2.5 million bpd once the sanctions are lifted.
Talks in Vienna on the return of Iran and the United States to the so-called Iran nuclear deal continue, with analysts saying both parties could be willing to see an outcome from those talks before the presidential election in the Islamic Republic on June 18.
If the ongoing talks result in an agreement, it will be in August at the earliest that Iranian barrels will hit the market free of American sanctions, Amrita Sen, head of research at Energy Aspects, told Bloomberg Television in an interview last week.
Even if a deal is announced as early as this week, it will take at least another two months for Iranian oil to start flowing to the market with the blessing of the United States, she said. This is because the Biden Administration will likely send any deal reached to Congress, which has 60 days to review it. The Administration could, in theory, bypass Congressional review, but Energy Aspects analysts don’t think it will do so, Sen added.
By Charles Kennedy for Oilprice.com
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Since then the maximum production Iran has achieved was 3.7-3.8 mbd. It hasn’t even managed to produce the production quota of 4.0 mbd allocated to it by OPEC.
Iran can never ever boost its oil production to 6.5 mbd now or ever. The highest production it could achieve after the lifting of sanctions is 3.75-3.80 mbd.
However, we may never see a lifting of US sanctions on Iran even by 2023 or ever. The reason is that the positions of the United States and Iran are irreconcilable.
Even if an agreement was reached before the Iranian presidential elections in the 18th of June (which I don’t believe for one minute that it will happen), it will have no impact whatsoever on the outcome of the elections. Supporters of the Islamic Revolutionary Guard Corps (IRGC) are going to have a landslide victory in the presidential elections.
If in the very unthinkable possibility the sanctions were lifted, Iran could only bring 650,000 additional barrels a day (b/d) to the market. The reason is that Iran has been managing with help from China to export 1.5 mbd or 71% of its pre-sanction exports of 2.125 mbd.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London