Iran will maintain its surge in the international oil market amid reports that OPEC's third-largest producer has slowed crude production and export, a senior official said Sunday.
"Decline in crude exports in one month period is not the proper indicator (to make an observation). Rise or fall in exports should be assessed over at least three months," Mohsen Qamsari, deputy for international affairs at the National Iranian Oil Company said, Mehr News Agency reported.
Last month, Bloomberg reported that Iran's observed oil exports, which exceeded 2 million barrels a day in both April and May, slipped by almost 20% in the first three weeks of June. Reuters also speculated that Iran's crude exports in July will fall to about 2.14 million bpd from about 2.31 million bpd in June.
"Sometimes crude loading is delayed and sometimes the customers cannot ship in their cargos in time and demand that supplies be made the following month," Qamsari added.
He said Iran is increasing crude production as it has run out of offshore inventories.
"Iran has no crude storage at sea. We have stored only small volumes of condensate because sometimes it is difficult to find buyers," he said. Condensate is a type of light, sweet crude extracted from Iran's gas reserves in the Persian Gulf.
The official made the remark in response to reports that the rise in Iran's crude exports over the past six months has largely come from the large inventories at sea and storage facilities, not from a real production hike per se.
After the lifting of international sanctions on Tehran' in January, Reuters estimated that Iran held between 30 million to 40 million barrels of crude and condensate in vessels.
Expanding Market
Iran says its crude output will reach 4 million barrels per day by September, a level last seen in 2011 before the US enforced tighter sanctions against Iran's nuclear program.
The state-run NIOC is interested in long-term crude export contracts, Qamsari said, stressing that some shipments are also made under spot deals due to market sensitivities.
Qamsari added that Iran is well on track to recover its crude market share in Europe.
"Nearly one-fourth of Iran's crude export goes to Europe. We have now reclaimed almost 80% of our pre-sanctions market in that continent," he noted.
Data shows Iran exports around 600,000-700,000 bpd to Europe. Italian refiner Saras has signed a 60,000-bpd contract, while Eni, another Italian major, is in negotiations to take in 100,000 bpd of crude from Iran.
The Royal Dutch Shell, Hungary’s MOL and Tupras of Switzerland are said to be joining the country’s growing list of European customers. Glencore PLC and Vitol Group, the world’s two largest independent oil traders, are also in negotiations to buy Iranian crude under long-term deals.
