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DUBAI: Iran plans rapid increase in oil production, senior oil ministry official said on Wednesday as talks continue between Tehran and six major powers to lift US sanctions which have seen it pump well below capacity since 2018.
Iran and the Six Powers have been in talks since April to revive a 2015 nuclear deal that former US President Donald Trump left three years ago, reimposing sanctions that have hit the Iranian economy hard by sharply reducing its vital oil exports.
“If the sanctions are lifted, most of the country’s crude production will be restored within a month,” Farokh Alikhani, production manager of the National Iranian Oil Co. (NIOC), told the website. SHANA from the Ministry of Petroleum.
“Careful planning has been carried out to restore oil production to pre-sanction levels at week, month and three month intervals.”
However, Washington said on Tuesday that even if the nuclear deal were revived, hundreds of US sanctions against Tehran would remain in place. This could mean that the additional supply of Iranian oil would not soon be reintroduced into the crude market.
Iran emerged from years of economic isolation in 2016 when world powers lifted crippling international sanctions against Tehran in return for sticking to the 2015 deal to curb its nuclear ambitions.
Tehran’s oil exports jumped to 2 million barrels per day (bpd) in 2016 and peaked at 2.8 million bpd before sanctions were reimposed in 2018 by Trump.
Iran does not release figures for current exports, but some energy watchdogs put them at around 700,000 bpd in April and 600,000 in May.
Alikhani said Iran hopes to further increase production “to over 4 million barrels per day in the next step.”
“Iran’s average daily oil production after the implementation of the 2015 agreement was 3.38 million barrels per day and we expect to return to that level if the sanctions are lifted,” Alikhani said.
Oil markets are watching the talks closely as the removal of sanctions could trigger an influx of Iranian oil into the markets.
However, a Forbes report said that the gradual return of Iranian exports should not upset global oil balances given the rapid pace of demand recovery.
The International Energy Agency, the Paris-based energy watchdog for developed economies, is also not worried about Iran. In his latest monthly oil report, he said: “The growth in supply forecast for the remainder of this year falls short of our expectations of significantly stronger demand beyond the second quarter.”