TEHRAN: Iran exported 2.25 million barrels of crude oil per day to international markets in September, a rise in its exports that came as Saudi Arabia cut its oil output based on a standing agreement among OPEC and non-OPEC member states, according to reports in Iran Daily. China and India were the prime recipients of Iran’s oil, purchasing a combined total of one million barrels per day. In November 2016, the Organization of Petroleum Exporting Countries and 11 non-members, including Russia, agreed to scale back production by 1.8 million barrels per day (bpd), in order to keep a lid on prices. The agreement has been extended until the first quarter of 2018. OPEC produces a third of the world’s oil, and its production reduction of 1.2 million bpd was made based on October 2016 output of around 31 million bpd, excluding Nigeria and Libya.
Iran is the third-largest OPEC producer, after Saudi Arabia and Iraq, and is allowed to pump an average of 3.8 million bpd over the next nine months under the current deal. According to reports by Press TV, Iran plans to keep its combined exports of crude oil and gas condensate at round 2.6 million bpd, until the end of 2017. In June, Iran’s oil minister Bijan Namdar Zanganeh said that Iran aims to increase crude oil production by around 200,000 bpd, or from 3.8 to four million barrels, by March. Iran is aiming to increase its crude production capacity to 4.7 million bpd by 2021, a target that does not complicate OPEC’s short-term decisions, according to Zanganeh. Sanctions placed on Iran between 2011 and 2014 had limited its ability to trade globally, tightening a noose around the country’s export capabilities and throwing it into a recession, which ultimately brought it to the negotiating table with world powers. The end result of those negotiations was the Joint Comprehensive Plan of Action (JCPOA), signed in July 2015, which lifted specific international sanctions in exchange for Iran limiting its nuclear program.
Iran has dramatically increased its oil exports after the nuclear-related sanctions started to be lifted in January 2016. However, a rise in Iranian oil production and exports also meant the global price of crude oil could be driven downward. The global price of crude oil had fallen from $115 per barrel in June 2014, to under $35 by the end of February 2016. The sharp decline in prices led to unrest in some oil producing countries, including Venezuela and Nigeria, and caused financial turbulence in major energy-exporting countries such as Saudi Arabia and Russia. Iran used to sell about 800,000 bpd to Europe before sanctions went into effect in 2011 and another round in 2012. Once they were in place, Iran’s production had decreased to around 2.5 million bpd with Europe purchasing its oil from other markets. In the first four months of 2017, Iran’s crude oil exports to European Union countries reached 9.31 million tons, a figure that is six times more than that during the same period last year. The French energy giant Total, Italy’s Eni and Saras, Russia’s Lukoil, Spanish refiner Cepsa, Royal Dutch Shell and Hungary’s MOL are amongst Iran’s oil customers.
