Iran could raise oil exports by 1 million barrels a day without international sanctions, its oil minister said as talks resumed with the U.S. over the nation’s nuclear program.
“If sanctions are lifted, we can raise our exports by one million barrels per day within a few months,” Oil Minister Bijan Namdar Zanganeh said Monday in Assaluyeh, Iran. The Persian Gulf nation shipped 1.2 million barrels a day last month, the International Energy Agency said in a March 13 report.
Iran and six world powers are negotiating an agreement to end a decade-long dispute over the Persian Gulf country’s nuclear program. Diplomats from the U.S. and Iran, working toward an end-March deadline, resumed talks Monday in Lausanne, Switzerland. Negotiations are in a critical phase, German Foreign Minister Frank-Walter Steinmeier said in an e-mailed statement.
“If we get an announcement of a framework deal within the next couple of weeks, obviously from a market psychology, we’re going to have a bearish knee-jerk reaction,” Mike Wittner, the head of oil market research in New York for Societe Generale SA, said by phone. It’s unclear when sanctions might end and it would take six months to a year for Iran to add a million barrels a day, he said.
Brent crude, the global benchmark, plunged by 61 percent in the seven months through mid-January because of concern about oversupply. Brent for May settlement fell 61 cents to $53.33 a barrel on the ICE Futures Europe exchange at 10:05 a.m. London time. West Texas Intermediate lost 58 cents at $43.30 a barrel in New York.
“It may be that Iran simply can’t say yes to the kind of deal that the international community is looking for,” U.S. Secretary of State John Kerry said over the weekend.
Iranian negotiators raised concerns with Kerry on Monday about a letter written by 47 Republican U.S. senators asserting that they or a future administration could repeal any deal made by President Barack Obama, according to a U.S. official, who declined to detail what was said.
“Given that the nuclear talks have reached a sensitive point, if U.S. oil companies take a position against this letter and oppose it, then we will reward them,” Mehdi Hosseini, head of Iran’s Oil Contracts Revision Committee, said in an interview published Tuesday in Shargh newspaper. He gave no details about the potential rewards, according to the report.
Iran is the fifth-largest producer in OPEC, pumping 2.78 million barrels a day in February, according to data compiled by Bloomberg. Production, which exceeded 4 million barrels a day in 2008, has declined under pressure from sanctions targeting foreign investment in the country’s oil and natural gas fields.
Iran exported 2.5 million barrels a day before the U.S. and European Union tightened restrictions in mid-2012, when the EU banned purchases of Iranian crude. Shipments have fallen by an average of 1.2 million barrels a day, the International Energy Agency said in a Feb. 10 report.
The country may boost crude and condensate shipments by 300,000 barrels a day by June, regardless of the outcome of the nuclear talks, Barclays Plc said in a report dated March 16. The increase would result from lower domestic demand and rising condensate exports from the South Pars field, the bank said. The potential to boost exports from last month’s level would be offset by lower stockpiling requirements in Asia as refineries there conduct maintenance work, according to Barclays.
Iran’s National Development Fund allocated $10 billion in loans for the oil and gas industry, a report posted on the presidential website said March 14.