Iran Crude Output Within OPEC Bounds

Iran's crude oil production remained within the limits of an OPEC accord aimed at reducing output and easing a lingering global glut, OPEC said in its monthly report this week, citing independent sources.

The third-largest producer of the Organization of Petroleum Exporting Countries pumped an average 3.79 million barrels per day of oil last month, up 16,700 barrels a day from May and just within the bounds of the OPEC supply cut deal.

Thirteen OPEC members agreed in November to cut back collective supply by 1.2 million barrels a day to alleviate bloated inventories and lift stubbornly low prices.

Iran was allowed to produce 3.79 million bpd, close to levels it produced before international sanctions on its nuclear program dragged down the country's output to around 2.5 million daily.

The country produced 3.792 million bpd and 3.774 million bpd in April and May respectively, according to OPEC's secondary sources.

OPEC uses two sets of figures to monitor its output—figures provided by each country and secondary sources that include industry media. The country produced an average of 3.785 million bpd in the second quarter of 2017, about 11,000 barrels a day below its Q1 level, according to sources.

Total OPEC crude oil production averaged 32.61 million bpd in June, an increase of 393,000 bpd over the previous month. Output increased mostly in Libya, Nigeria, Angola, Iraq and Saudi Arabia, while production showed declines in Venezuela.

The report also said oil demand grew in Iran, Iraq, UAE and Qatar, with transportation fuels, notably jet fuel and gasoline, dominating the increase in all countries. OPEC and 11 other countries, which together had pledged to remove 1.8 million bpd from the market in the first half of this year, extended the cuts to March 2018. However, Tehran has signaled its intention to increase output before the current supply cut deal expires.

"By the end of 2017, we hope to reach about 4 million barrels per a day," Amirhossein Zamaninia, deputy oil minister for international affairs, said on the sidelines of an energy congress in Istanbul on Wednesday.

Iran's own submitted data to OPEC showed a 13,000-bpd cut in June to 3,880 million bpd from the previous month.

Zamaninia noted that the Iranian government is negotiating oil projects worth $200 billion with 27 foreign companies, including with BP, Russia's Gazprom and Lukoil, and Malaysia's Petronas, among others.