Iran Ramps Up Oil Production to Pre-Sanctions Levels

A picture taken on March 12, 2017, shows an oil facility in the Khark Island, on the shore of the Gulf. / AFP PHOTO / ATTA KENARE (Photo credit should read ATTA KENARE/AFP/Getty Images)
ATTA KENARE/AFP/Getty Images

Iranian Deputy Oil Minister Amir Hossein Zamaninia said Friday that Iran is beginning to ramp up oil production, and within two months it will reach levels comparable to its production before U.S. sanctions the Trump administration imposed in 2018.

Speaking at an oil conference in Tehran, Zamaninia assured reporters that Iran’s current level of oil production is “much better than many assume.” 

Outside analysts say production fell below two million barrels per day last year, compared to an output of about four million barrels before sanctions were restored. Earlier statements from Iranian officials suggested they hoped to double current production to about 2.3 million barrels a day.

The Hindustan Times observed that Iran’s oil surge, or at least its boasts that a surge is coming, are clearly a result of President Joe Biden taking office in the United States and presumably lifting sanctions as he draws the U.S. back into the Iran nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA). Zamaninia said the Iranians have already begun discussing post-sanctions energy projects with potential European and Asian partners.

“But for now, the sanctions are still in place and any buyer of Iranian crude would face the same legal and financial penalties that have deterred most potential customers over the past few years,” the Hindustan Times added.

Zamaninia’s boss, Oil Minister Bijan Zanganeh, predicted on Friday that Iran will regain its full share of the world oil market from before the sanctions.

“I am not worried about our exports market. Absolutely not. I think if the sanctions are lifted, the market itself approaches us. And those who buy oil always seek to diversify their suppliers. They don’t want to restrict themselves to one or two particular sellers,” Zanganeh said.

In line with Zamaninia’s assurances that Iran’s oil industry is doing better than most observers might think, Zanganeh said Iran’s oil sales and access to funds have improved “dramatically” and asserted Iran has achieved record-high oil exports despite “the toughest of sanctions.”

“The market is very big. We are now more powerful and capable than the past in terms of marketing, transfer of money, receiving money and entering the market,” he said.

Iranian President Hassan Rouhani said Thursday that “the world needs Iran’s oil and gas” and it can become “a regional hub for producing and exporting gas and electricity,” as reported by the state Tasnim news agency.

“We ought to be among the world’s top five exporters of gas. (We should) export gas to the countries south and east of our country, rather than only to the west. It is among important works and we must plan ahead for the future administrations,” Rouhani said during a videoconference held to celebrate the opening of a $3.4 billion gas refinery.

International analysts told Bloomberg News on Friday that Iran’s boasts of restoring full exports within two months are “very optimistic” and “don’t really stand up to scrutiny.” They predicted most buyers would wait for the formal termination of U.S. sanctions before entering into purchase agreements.

“But it does show that Iran is keen to test the U.S. commitment to the sanctions. Tehran just put nuclear diplomacy back on the front burner,” said Bill Farren-Price of the Enverus energy consulting firm.

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