Bloomberg/Tehran/Dubai
Iran will emphasise regaining oil sales it lost due to sanctions over helping to prop up prices once curbs that choked off the nation’s crude exports are lifted.
The oil producer plans to restore output to the level it achieved before the economic curbs crippled production and exports, Oil Minister Bijan Namdar Zanganeh said on Monday in Tehran. Iran wants to pump almost 4mn bpd within seven months once sanctions are removed and 4.7mn as soon as possible after that, he said.
Such an increase may cause oil prices to fall, Zanganeh told reporters after meeting with Germany’s vice chancellor Sigmar Gabriel. “But that doesn’t mean we won’t enter our oil into the market.”
Iran had the second-biggest output in Opec before the European Union banned purchases of its crude in July 2012. The country is now fourth-largest in the Organisation of Petroleum Exporting Countries, with output in June averaging 2.85mn bpd compared with 3.6mn at the end of 2011, according to estimates compiled by Bloomberg.
Under the nuclear agreement Iran and six world powers reached in Vienna last week, the US agreed to end efforts to limit Iran’s oil sales. The EU said it would end the bloc’s embargo on imports once Iran complies with obligations to scale back its nuclear programme.
Brent crude, the global benchmark, fell about 50% last year amid surplus supply as the US, Russia and Saudi Arabia all boosted production.
Countries that sold more oil and took market share from sanctions-bound Iran will have to adjust as the country restores its output and exports to historical levels, Zanganeh said, without identifying such nations. Production slid to 2.66mn a day by the end of 2012 after sanctions were tightened in July of that year, data compiled by Bloomberg show. “Those who are responsible for protecting prices are those who have filled our share before and used it,” Zanganeh said. “Our only responsibility here is attaining our lost share of the market, not protecting prices.”
Iranian oil exports declined to 1.4mn bpd on average last year due to sanctions, the US Energy Information Administration said June 24 on its website. Sales averaged about 2.6mn bpd in 2011, before the US and European Union imposed restrictions, the EIA said.
Iran looks forward to doing more business with German oil and petrochemical companies, Zanganeh said. Issues preventing banks and insurers from involvement with Iran must be resolved before deals between the two countries can go ahead, he said. Viewpoint: Page 18
