Oil Supply to US Possible

Oil Supply to US PossibleOil Supply to US Possible

Iran will be ready to supply crude oil to global customers, including American refineries, a senior Iranian oil official said on Saturday, stressing that Tehran is determined to raise crude output after the removal of sanctions despite faltering prices.

An end to decades-long trade and financial restrictions on Tehran, likely to take place by January 2016, has sparked speculations that it will embark on oil export to American companies, with Chevron said to be in line to receive Iranian crude shortly after the sanctions removal.

Rokneddin Javadi, deputy oil minister and president of the National Iranian Oil Company, did not rule out the speculations, Mehr News Agency reported.

"NIOC is ready to conduct oil trade with everyone except Israel," he said. "Crude production will be boosted by 500,000 barrels per day in the first step after sanctions are lifted."

In September, Iran discussed oil trade with South Africa, including the export of crude to a refinery in the country owned by the US energy giant Chevron.

Earlier that month, Chevron announced it was studying possible advantages of Iran's nuclear agreement to the company despite strict compliance with US embargos.

Although the prospect of additional Iranian crude is weighing on the market, Tehran has no plans to put a cap on its post-sanctions oil ambitions, which call for propping up production by an additional 1 million barrels within six months of sanctions removal.

The average price of crude sold by OPEC members slumped to the lowest in 11 years this week, fueled by the Organization of Petroleum Exporting Countries' decision on Dec. 4 to abandon output ceiling.

The market is oversupplied by 1.5-2 million bpd, but Iran is keen to raise total exports to more than 4 million bpd by the end of next year.

Sanctions curbed Iran’s sales of crude and condensate to 1.4 million barrels a day in 2014 from 2.6 million in 2011, according to the US Energy Information Administration.

Oil officials have reiterated in the past few months that "traditional customers" of Iran's crude will maintain or ramp up imports.

India, China, Japan and South Korea are among the main buyers of oil from Iran, while South Africa has said it would resume imports "the day after" sanctions are lifted.