Iran's crude oil output and exports have hit new highs in 2023 despite US sanctions, according to consultants, shipping data and a source familiar with the matter, which will add to global supply when other producers are limiting output.
Tehran's oil exports have been limited since the US in 2018 exited a 2015 nuclear accord and reimposed sanctions aimed at curbing oil exports and the associated revenue to Iran's government, Reuters reported.
However, exports have risen during the term of his successor President Joe Biden. Iranian and Western officials have said the US is holding talks with Iran to sketch out steps that could limit the nuclear program.
Iranian crude exports exceeded 1.5 million barrels per day in May, the highest monthly rate since 2018, according to Kpler, a provider of flows data. They were around 2.5 million bpd in 2018, before the US withdrawal from the nuclear deal.
Iran said in May it has boosted its crude output to above 3 million bpd. That's about 3% of global supply and would be the highest since 2018, according to figures from the Organization of he Petroleum Exporting Countries. A source familiar with the matter told Reuters earlier this month output was still at this level.
The International Energy Agency this week put Iran's May production at 2.87 million bpd, close to Iran's official figure.
The rise from Iran comes as OPEC+, which includes OPEC, Russia and other allies, is cutting output to support the oil market, where expectations that economic weakness will dent demand have pressured prices.
Other analysts say Iran's production and exports have risen.
SVB International, a consultant, estimates crude production hit 3.04 million bpd in May, up from 2.66 million bpd in January.
Exports of crude and condensate were 1.93 million bpd in May.
Biggest Customer
China is Iran's biggest customer while volumes also head to Syria and Venezuela, according to analysts and shipping data.
According to Mohsen Khojastehmehr, managing director of the National Iranian Oil Company, Iran’s oil production has increased by 600,000 barrels per day in the past 20 months compared with the earlier corresponding figures and currently stands at 3.84 million barrels per day.
“Iran’s oil exports have doubled during the period and reached 1.4 million bpd. “
Visiting oil export facilities on the Persian Gulf’s Kharg Island, Khojastehmehr said all the facilities and logistics at Kharg have been repaired and modernized to help increase oil exports.
On the expansion of Iran's oil terminals, he said measures have been taken, including the overhaul of storage tanks and installation of a new storage facility with a capacity of 4 million barrels on Kharg Island and another one in Jask with 10 million barrels of capacity.
According to the NIOC chief, if development projects proceed as planned, Iran’s oil output can reach 5.7 million bpd in the next eight years.
One of the projects is aimed at developing Arvandkenar Oilfield near the border of Iraq, the technical planning for which has been recently started.
“Arvandan Oil and Gas Company will develop the oilfield located at the southern end of the West Karoun region,” the company’s managing director said.
“A tender for drilling a new well and repairing an existing well in the oilfield is underway under an Environmental Product Declaration contract. Eleven domestic firms have declared their readiness to join the project,” Abdollah Azari Ahvazi added.
He noted that average daily production in the South Azadegan Oilfield, which is located in the same petroleum region and connected to an oilfield in Iraq, has increased by 10,000 barrels per day, adding that another 10,000 barrels will be added to the production capacity of the oilfield by the end of September.
“The current production capacity from oilfields in the West Karoun region is more than 400,000 bpd,” he said.
Arvandan Oil and Gas Company is considered the second-largest producer in the country after the National Iranian South Oil Company.
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