Iran is now able to sell as much oil as it wants and to any country it “deems appropriate”, the oil ministry’s news service Shana quoted Iranian President Hassan Rouhani as saying on Tuesday, less than a week after Iran was not only exempt from OPEC’s cuts but was also allowed to ramp up production to 3.797 million barrels per day.
OPEC’s detailed planned production levels and reference output levels for cuts place Iran’s output effective January 2017 at 3.797 million bpd, and despite the discrepancy with the reference level figure, these 3.797 million bpd are higher than Iran’s October output of 3.69 million bpd as reported by OPEC secondary sources. No other OPEC producer has been allowed to increase output (with Libya and Nigeria exempt due to civil unrest and militant violence, respectively).
OPEC figures also put Iran’s output for the first quarter of this year at 3.096 million bpd, the quarter in which western sanctions on Iran were lifted in January.
Following the lifting of the sanctions, the U.S. Energy Information Administration (EIA) said back in January that it expected Iran’s crude oil production to reach 3.3 million bpd at the end of 2016 and 3.7 million bpd at the end of 2017, with a subjective uncertainty range of +/- 250,000 bpd for these year-end projections.
Iran has been pumping more and has been steadily increasing output, and has argued that it deserves to be allowed to reach pre-sanction levels, but the Islamic Republic was not officially cleared to reach the coveted 4-million-bpd mark. Still, the fact that it’s the only one allowed to increase output while the Saudis shoulder most of the cutting points to how much Iran’s bitter rival Saudi Arabia has been feeling the oil price crash.
Iran is also factoring in oil at US$50 in its budget for the new fiscal year starting in March, compared to the previous budget which used US$40, according to the budget draft Rouhani submitted in Parliament on Sunday.
By Tsvetana Paraskova for Oilprice.com
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