Once the second largest oil producing member of the Organisation of Petroleum Exporting Countries (OPEC) behind Saudi Arabia, Iran has fallen to sixth position in recent times, producing just 2.56 million barrels a day, as US and EU sanctions have squeezed its exports.
The sanctions were put in place as an attempt to put pressure on Iran's economy, and improve the Wests bargaining power when discussing the country's uranium enrichment program, that many fear will allow the production of nuclear weapons.
By discouraging most foreign countries from buying Iranian oil, and most shipping companies from carrying Iranian crude, so far the sanctions have managed to reduce Iran's oil exports by around a million barrels a day.
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The newly elected president of Iran, Hassan Rouhani, has declared that he will work to find a serious end to the dispute with the West and bring an end to the sanctions. This is definitely the first step to reviving Iran's struggling economy, but the problem is that it won't be quite as simple as removing the sanctions and then sitting back as all customers quickly return, and things continue as they were before.
Those customers have new suppliers now, and they will have lost confidence in Iran. Their orders will have to be fought for and won back, and this could take some time.
Bijan Namdar-Zanganeh. (Trend)
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Iran's new oil minister, Bijan Namdar-Zanganeh, has written up some plans to raise the country's oil production by 70% to around 4.2 million barrels a day. He expects the increased production to force prices down, and offer more of an enticing prospect to attract old customers. He stated that he is even willing of starting a price war in an effort to win back the lost orders.
Zanganeh told the Fars News agency that "revival of Iran's lost oil markets is among my top priorities. We only ask those who have replaced us in the world's oil markets to know that when we are re-entering these markets they will have to accept that the oil prices decline or they should reduce their production to create enough space for Iran's oil."
By. James Burgess
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also… More