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When Saudi Arabia initiated the latest OPEC discussion about an oil production cut, Iran insisted that it would only consider joining market rebalancing efforts when it reached a daily output target of 4 million barrels. Now, it is close to hitting the mark, pumping 3.9 million barrels of crude daily, according to a senior official from the state-owned National Iranian Oil Company.
After it made sure it was granted an exemption from the OPEC cut agreement, Tehran has not wasted any time marching onwards to revive its energy industry.
At the start of the year, NIOC issued a list of 29 foreign companies that were picked to explore and exploit its oil and gas reserves. The list was notably dominated by Asian E&Ps, including four Chinese companies and five Japanese ones.
The domination of Chinese and Japanese companies on the list is understandable, as is the reluctance of U.S. energy companies to participate in Iranian oil and gas tenders. During his colorful election campaign, Donald Trump slammed the deal reached by Western powers and Iran on its nuclear program that led to the lifting of most sanctions against it. The President-elect has threatened to revoke that deal as soon as he takes office.
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Last week, Reuters reported, citing shipping data, that Iran had sold 13 million barrels of crude stored at sea, gaining market share as it takes advantage of other OPEC members’ reduction of exports as per their new production quotas.
Tehran has also been closing oil deals in a rush.
There was one recent $1.9 billion contract between The National Iranian Oil Refining and Distribution Company (NIORDC) and South Korea’s Daelim Corporation for the optimization of Esfahan Oil Refinery.
Another deal involved the world’s top commodity trader Vitol, which agreed to lend Tehran US $1 billion in exchange for a share in its future crude oil exports.
Currently, the country is also negotiating a 4-million-barrel monthly export to the Philippines.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.