March Oil Exports to Rise

March Oil Exports to RiseMarch Oil Exports to Rise

Iran, OPEC's No. 3 producer, is expected to raise its oil exports in March to around 1.65 million barrels per day from 1.5 million bpd a month earlier on the back of higher crude shipments to Europe.

State-run National Iranian Oil Company is expected to ship around 250,000-300,000 bpd to Europe this month after it finalized term deals with France's Total and Spanish refiner Cepsa, effective from March 1, two industry sources familiar with Iran's exports told Reuters on Thursday.

The French oil major has a contract to buy about 200,000 bpd, while Cepsa's deal was for about 35,000 bpd, one source said. Total is expected to lift at least 5 million barrels in March, the source added.

Litasco, the trading arm of Russia's Lukoil, Cepsa and Total have become the first buyers in Europe after the lifting of sanctions and lifted trial cargoes in February, trading sources told Reuters.

Hellenic Petroleum, Greece's biggest oil refiner, has said it will receive its first shipment of Iranian crude oil at the end of March.

Tehran is working to regain market share, particularly in Europe, after the lifting of international sanctions in January. Oil exports rose by 500,000 bpd to 1.5 million bpd in February, a senior NIOC official said on Tuesday.

The sanctions had cut Iranian crude exports from a peak of 2.5 million bpd before 2011 to just over 1 million bpd in recent years.

Tehran has said it would boost output immediately by 500,000 bpd and by another 500,000 bpd within a year, ultimately reaching pre-sanctions production level of around 4 million bpd seen in 2010-2011.

But even a gradual increase in its exports would come at a time of global oversupply, with producers around the world pumping hundreds of thousands of barrels every day in excess of demand. Oil prices are near 11-year lows at around $37 a barrel.

Saudi Arabia, Qatar, Venezuela and non-OPEC Russia agreed last month to freeze output at January levels in the first global oil pact in 15 years.

Iran's Oil Minister Bijan Namdar Zanganeh said last week the freeze was "laughable", as Saudi Arabia and Russia are capping their output at 10 million barrels while asking Iran to freeze output at 1 million barrels.

Iranian sources say the country would be prepared to discuss a production pact once output reaches pre-sanctions levels.