IEA: Iran Oil Output Could Soar

IEA: Iran Oil Output Could SoarIEA: Iran Oil Output Could Soar

Iran could raise its oil output by as much as 730,000 barrels per day from current levels fairly quickly after sanctions are removed, the International Energy Agency said on Wednesday.

The West's energy watchdog estimated that Iranian oilfields, which pumped around 2.87 million bpd in July, could increase production to between 3.4 million and 3.6 million bpd within months of sanctions being lifted.

"While significantly higher production is unlikely before next year, oil condensates held in floating storage—at the highest level since sanctions were tightened in mid-2012—could start to reach international markets before then," the IEA said in a monthly report, Reuters reported. Oil Minister Bijan Namdar Zanganeh said Iran expects to raise oil output by 500,000 bpd as soon as sanctions are lifted and by a million bpd within months.

The report by the Paris-based IEA suggested any increase in output would probably be more modest than Iranian estimates and said the country would require massive investment to raise output capacity.

Iran has said it hopes to secure nearly $200 billion worth of oil and gas projects with foreign partners by 2020.

Iran and six major world powers reached a landmark nuclear deal on July 14, clearing the way for an easing of international sanctions on Tehran and higher oil exports.

However, sanctions are not expected to be removed before the end of December and analysts say they may still be in place at the end of the first quarter of 2016.

Iran's crude oil production will not rise until international sanctions against it have been lifted, a senior Iranian oil official was cited as saying on Tuesday.

"Any increase in Iran's oil production depends on sanctions being lifted and oil production will not change until sanctions are lifted," Rokneddin Javadi, managing director of state-run National Iranian Oil Company, said.

Iran's oil exports have been cut by more than half to around 1.1 million barrels per day from a pre-sanctions level of 2.5 million bpd. It hopes to boost oil exports by 1 million bpd in just two months once sanctions against it are lifted.