Oil Talks After Reaching Pre-Sanctions Level

Oil Talks After Reaching  Pre-Sanctions Level
Oil Talks After Reaching  Pre-Sanctions Level

Iran will push forward with plans to pump an additional 1 million barrels of oil per day to reach its pre-sanctions level, a senior Iranian oil official said.

"Iran is not the cause of this turmoil," Deputy Oil Minister Amir Hossein Zamaninia also told CNN on Sunday, referring to the slump in oil prices. "We do not intend to sanction ourselves again after coming out of the sanctions."

Iran prepares to bring its supplies back to the global market after economic sanctions on the country were lifted as part of a landmark nuclear deal with world powers.

"We want to increase our production to the level we used to produce prior to the sanctions," Zamaninia said. "And at that time, we can get together and discuss and strategize for the future."

The global oil market is witnessing excess supply. The price per barrel has nosedived around 70% since mid-2014, punishing the economies of many of the big producers.

Iran's return has further complicated the picture. The country has vowed to raise crude production capacity to its pre-sanctions level and retake market share claimed by other producers such as Saudi Arabia, Iraq and Russia.

Once the second-biggest producer in the Organization of Petroleum Exporting Countries, Iran is now fifth-biggest in the 13-member group. Oil exports fell to a little more than 1 million barrels a day in 2014 from 2.6 million bpd in 2011, the year before the US and European Union intensified sanctions.

Amid mounting concerns about the impact of the price plunge, five of OPEC's 13 members—Saudi Arabia, Kuwait, the UAE, Qatar and Venezuela—plus Russia, agreed earlier this month to keep output steady at January's levels.

But Iran has refused to join the production freeze. Iran's Oil Minister Bijan Namdar Zanganeh initially appeared to support the deal by saying the Persian Gulf country would "support any measure to help improve prices". However, in an incendiary remark this week, Zanganeh called the oil freeze deal "a joke".

Zamaninia was more diplomatic in his comments to CNN on Sunday, although he made it clear Iran considers the onus to be on other countries to tackle the supply glut.

"That was a small step in the right direction," he said of the output freeze. "We hope that they [OPEC] can get together to decrease their production."

Zamaninia said a "silver lining" of the sanctions is Iran is less dependent than many of its neighbors on oil revenues.

Incidentally, the country does not need foreign investment to ramp up its production by 1 million barrels per day, but it is interested in overseas funding to help finance longer-term increases.

"We have no doubt that we can attract at least $40 billion to $45 billion in investment per year," he said.