Tehran's Production Increase Will Not Harm Oil Market

Tehran's Production Increase Will Not Harm Oil MarketTehran's Production Increase Will Not Harm Oil Market

 Iran is trying to regain its share of global crude sales and has no intention of harming the oil market with its planned increase in production once sanctions are lifted from its economy, Oil Minister Bijan Namdar Zanganeh said on Sunday.

“The Oil Ministry intends to boost Iran’s crude oil exports by an aggregate of 1 million barrels a day in two phases,” Zanganeh was quoted as saying by the state-run IRNA, Bloomberg reported.

"In the first phase, Iran will raise exports by 500,000 barrels a day within a week of the removal of international sanctions. The country will add another 500,000 barrels a day in a second phase within six months after the curbs end."

Brent crude slid 35% over the past year as the Organization of Petroleum Exporting Countries raised output in the face of already rising global stockpiles.

Saudi Arabia, the world’s largest crude exporter, has led OPEC in fighting for market share against higher-cost producers such as shale drillers in the US. The group set aside its output target of 30 million barrels a day at a meeting in Vienna last month.

Iranian oil companies and banks may be able to return to international markets by mid-January, based on the pace at which the nation is disabling nuclear infrastructure.

Zanganeh said as part of its efforts to increase production, the country will probably award development rights to Chinese companies for the second phase of the North Azadegan Oilfield in southwestern Iran.

"Under an accord, the Chinese will have to submit a proposal to the Oil Ministry for examination and approval," he said, without identifying any companies.

Iran pumped 2.7 million barrels a day of oil in December, data compiled by Bloomberg show.

The amount of additional Iranian crude reaching foreign buyers will depend on conditions in an oil market oversupplied by 2.5 million to 3 million barrels a day, the Iranian Oil Ministry’s Shana reported on Saturday, citing Mohsen Qamsari, the head of international affairs at the state-run National Iranian Oil Company.