With Iran poised to resume usual business ties with the world under a historic nuclear deal, Tehran is set to target India, Asia's fastest-growing major oil market, and old partners in Europe with hundreds of thousands of barrels of its crude.
A senior Iranian source close to supply negotiations said the country, which has the world's fourth-biggest proven oil reserves, was targeting India as its main destination for crude.
"Indian crude demand is growing faster than other Asian countries. Like our competitors, we see this country as one of the main targets for Asian sales," the official told Reuters on condition of anonymity.
Tehran plans to lift exports by 500,000 barrels per day post-sanctions and gradually raise shipments by the same amount again, adding to a glut of global oil and likely putting more pressure on oil prices that have already dropped 70% since 2014 to around $30 per barrel.
Iran has 22 very large crude carriers floating off its coast, with 13 fully or almost fully loaded, mapping data on Thomson Reuters' Eikon showed, carrying enough crude to meet India's import needs for almost a week.
Iran hopes to raise its exports to India by 200,000 bpd, up from the 260,000 bpd currently shipped under sanctions' restrictions, the official said.
At the right price, Indian refiners said they are keen to import more from Iran, as the country's demand for fuel soars on the back of 10% annual growth in car sales, a rate that is now faster than China's.
"We have a long-lasting relationship with Iran and post lifting of sanctions we will evaluate the scenario," said L K Gupta, managing director of India's Essar Oil.
"It makes sense to buy oil from nearby options (like Iran)," said H. Kumar, managing director of another Indian oil firm, Mangalore Refinery and Petrochemicals, but added "intake will depend on prices".
Slow Demand in East Asia
The Iranian official said there was not much room for major export increases to China, South Korea or Japan due to slowing demand and also because of a shift there towards more non-Middle East crudes.
A South Korean refinery source confirmed he did not expect a big increase in Iranian supplies, largely because of plentiful alternatives. A Japanese refiner said his firm could only take Iranian deliveries once it had insurance in place, which could take time.
The news comes as Iran's crude oil exports are on target to hit a nine-month high in January, as buyers prepare for the lifting of sanctions. The country is on track to ship 1.10 million barrels a day of crude, excluding condensate this month, according to an industry source with knowledge of the OPEC member's tanker loading schedule.
The Iranian official said Tehran planned to revive supply deals with European partners in order to ramp up exports.
Shipping industry association BIMCO confirmed that European clients would be among the first post-sanction clients.
However, prospects for exports to the Americas, never a significant market for Iran, appear slim as the region is already inundated with supply from soaring US and Canadian production.
Within the Middle East, traders say Iran's main competitor would be Iraq, which has successfully returned to Asian markets in recent years, with exports rising above 3.5 million bpd.
