Zanganeh Says Oil Output at 3.9 mbpd

Crude oil production has reached 3.9 million barrels per day and is rising, Oil Minister Bijan Namdar Zanganeh said.

Speaking on the sidelines of a Cabinet meeting, Zanganeh indicated that Iran was closing in on its target of restoring output to 4 million bpd produced before the 2012 imposition of tighter international economic sanctions specifically targeting Iran's petroleum and financial sectors, Platts reported on Friday, citing a report by Shana news agency.

The figure is above Iran's production ceiling of 3.8 million bpd under an OPEC agreement in November to cut supplies. However it does not mean that it is undermining the accord as the country's average output through the first six months of the year should not breach that ceiling.

Zanganeh's latest estimate of crude production closely follows news that two Iranian very large crude carriers (VLCCs) were heading toward Rotterdam for the first time in five years to offload 4 million barrels of crude next month at the Dutch port.

Trading sources said Iran's Huge and Snow supertankers would be arriving around February 7 and February 11 respectively to unload a mix of Iranian heavy and light crude grades at Rotterdam.

In 2012, the EU banned imports of Iranian crude by its member countries and also the provision of EU-linked insurance, including protection and indemnity cover for any shipments of Iranian crude, regardless of destination.

However, Iranian crude exports are now on the rise. In September, Iranian VLCC departures hit their highest level since sanctions were lifted a year ago, according to Platts data.

Iran is targeting oil production of 4 million bpd by the end of its current fiscal year in March. The Oil Ministry said in September that crude production had reached 3.85 million bpd.