Advertisement

Iran anticipates nuclear deal, readies oil increase

Analysts suggest, though, a return to high production will be slow.

By Ed Adamczyk
The Nouri Petrochemical Complex (NIPC) is in Assalouyeh, 1,000 km (620 miles) south of Tehran, Iran. The complex, founded in 1964, is the second largest producer and exporter of petrochemicals in the Middle East. File Photo by UPI/Maryam Rahmanian
The Nouri Petrochemical Complex (NIPC) is in Assalouyeh, 1,000 km (620 miles) south of Tehran, Iran. The complex, founded in 1964, is the second largest producer and exporter of petrochemicals in the Middle East. File Photo by UPI/Maryam Rahmanian | License Photo

VIENNA, July 6 (UPI) -- Iran is ready to double its oil exports as soon as economic sanctions are lifted, Mansour Moazami, the country's deputy oil minister, said.

As Tuesday's deadline for a deal in Vienna between Iran and Western powers nears, one in which Iran would curtail its nuclear program in exchange for a lifting of sanctions, Iran is attempting to persuade the Organization of Petroleum Exporting Countries (OPEC) to return to an abandoned quota system, Moazami said in an interview. He said Iranian oil production could quickly reach 2.3 million barrels per day, up from present production of 1.2 million per day.

Advertisement

While the boost would bring much-needed revenue to Iran, which has the fourth-largest oil reserves on earth and a production capability of four million barrels per day, it would run counter to regional rival Saudi Arabia's attempt to raise its own oil exports. Saudi Arabia opposes a return to limits on OPEC members' production of oil.

If production was unrestricted, Iran could be OPEC's second-largest oil producer, behind Saudi Arabia, and Iran is eager to accelerate all phases of its economy a soon as sanctions are lifted. An agreement emerging from the negotiations, which are currently in their 21st month, still requires the consent of the U.S. Senate and the Iranian government.

Advertisement

"We are like a pilot on the runway, ready to take off. This is how the country is, right now," Moazami said. Quickly increasing oil exports is problematic, analysts suggest. An increase as envisioned by Iran could take six to 12 months.

"They've got to meet the requirements of any agreement, and that's going to take time," Jeff Currie, head of commodities research at Goldman Sachs Group, told the Middle East North Africa Financial Network Monday. "When you shut these fields in to that significant of a degree, your ability to bring back production to previous levels will be limited because you've done damage to the fields that will require significant investment."

Foreign oil producers will be unlikely to jump back into major production schedules until the legal implications of a deal are evident, Harry Tchilingurian of BNP Paribas SA said. He added Iran could eventually add one million barrels per day to the world's totals.

Latest Headlines