News / Energy

Iran to raise oil output based on market needs: Official

Saturday, 02 January 2016 12:50 PM [ Last Update: Saturday, 02 January 2016 2:45 PM ]

Mohsen Qamsari, director for international affairs of National Iranian Oil Company (NIOC)

A senior Iranian official says Iran will raise its oil production based on the market needs after the lifting of international sanctions expected later this month.

“We will produce [oil] as much as the market would take in,” the Iranian petroleum ministry’s official news agency Shana quoted Mohsen Qamsari, director for international affairs of National Iranian Oil Company (NIOC), as saying.

He said that Iran has the capacity to produce up to 1 mb/d in the short-term.

Iran is expected to add 500,000 b/d to its oil exports after the sanctions are lifted. It will continue to raise exports to 1 mb/d six months after.

Iran exported 2.3 mb/d-2.5 mb/d of oil before US and European sanctions targeting its energy sector cut the sales by half in 2012. Saudi Arabia, Russia and Iraq ramped up production to replace the Iranian oil.

Iranian officials have urged OPEC members to make room for Iranian oil when the country returns to the pre-sanction export levels.

Qamsari said the market wrongly imagines that Iran is not able to produce oil at this level.

“For presence in this market under the present circumstances, we have our own specific considerations,” he said. “We will try to enter the market so that the oil price decline would not be exacerbated.”

New oil customers

Qamsari also said that some new European companies are in talks with Iran for oil purchase after sanction relief.

An offshore oil platform in southern Iran

“We are in talks with them for removing some ambiguities…We hope to be able to finalize our talks with them before the sanctions are lifted,” he added.

Qamsari noted that Iran will accept to supply oil to new customers “in case they would help Iran boost its market share.”

China is expected to be Iran’s biggest oil client in the post-sanctions era.

Official figures released by China’s customs department show that the country increased its imports of crude oil from Iran by 45 percent in November 2015. The figures also show that Iran exported an average of about 500,000 barrels per day of oil to the country over the same period.

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