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04-08-2015

Iran to Boost Oil Output "Within a Day After the Lifting of Sanctions"

"We are not asking anybody's permission to get our rights back," says Iranian Oil Minister Bijan Namdar Zanganeh.

Iranian Oil Minister Bijan Namdar Zanganeh Sunday said the country's oil output will increase by 500,000 barrels per day (bpd) as soon as sanctions against the country are lifted, rising to a 1 million bpd increase within a few months, Reuters reports.

"We are already doing marketing, and within a day after the lifting of sanctions we will raise (production) by 500,000 barrels per day," said Zanganeh.

"Within the next few months, we will return to the level of 3.8-3.9 million barrels."

In July Iran reached a deal with the so-called P5+1 global powers over the sanctions, having already told the Organization of Petroleum Exporting Countries (OPEC) to make room for an additional 1 million bpd if prices were to remain unaffected.

The sanctions are understood to have caused the country's crude production to fall by about one million bpd.

"I have written a letter to OPEC saying that the sanctions are being lifted and that we are returning (to previous production levels)," said Zanganeh.

"We are not asking anybody's permission to get our rights back."

Exactly how Iran's increased output impacts the oil markets could be of particular significance to bunker buyers, with analyst Carley Garner last month warning it could push prices as low as $30 per barrel., echoing a January price point prediction by\u00a0Goldman Sachs Group Inc.\u00a0President Gary Cohn.

$30 oil suggests IFO380 prices in the primary ports could dip under $160 per metric tonne (pmt) based on current trends.

Also weighting on prices is the fact that Iran has some 50 million barrels stored at sea, sparking fears of a price crash if all the product suddenly came onto the market.

However last week Ship & Bunker reported Iranian officials said it is mostly condensate and fuel oil in the floating storage, rather than crude.


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