Oil markets will remain stable this year even as Iran plans to keep boosting crude exports to regain the market share it lost due to sanctions, according to a senior official at state-run National Iranian Oil Company.
Iran exports about 2 million barrels of its daily output of 3.8 million, said Mohsen Ghamsari, NIOC’s director of international affairs, Bloomberg reported.
The country has regained about 80% of the market share it held before the US and European Union tightened sanctions on its oil industry in 2012, he said. Sanctions were eased in January, and Iran plans to double crude exports.
“Our exports peak is above 4 million barrels a day and we have plans for that and are waiting for the right conditions,” Ghamsari said in an interview in Tehran, without elaborating on the timing for such an increase.
“The market will stay on its present balance, and a return to prices below $30 a barrel is not very probable, at least in the current year.”
Tehran has said it is seeking more than $100 billion in investment from international partners to upgrade its oil industry and reclaim its position as the second-biggest producer in the Organization of Petroleum Exporting Countries, after Saudi Arabia.
Benchmark Brent crude, which averaged more than $99 a barrel in 2014, tumbled to a 12-year low of about $27 in January due to the continued global supply glut. It ended trading in London last week at $46.76 a barrel.
------- Production Plans
Iran targets 5.8 million barrels a day in combined production of crude and condensates by 2021. It defied skeptics with a 25% surge in production so far in 2016 and aims to reach an eight-year high for daily output of 4 million barrels by the end of the year.
“Our policy is not to stockpile oil in floating offshore storage,” Ghamsari said. “In other words, we produce as much as we think the market would absorb.”
Iran is shipping about 25% of its exports to European buyers, he said. NIOC is selling bigger volumes in Asia, though it has not increased the number of supply contracts in that region, he said.
“Most of our oil transactions and agreements are long-term-based, leaving a small portion for spot sale,” Ghamsari said. “We are right now in negotiations with many companies, both in Europe and Asia,” he said, without identifying any of them. Iran is taking payments for some sales in euro.
Oil Minister Bijan Namdar Zanganeh predicted in June that Iran would sign its first deals with foreign companies within three months.