Iran Says It Can Quickly Boost Oil Output If Sanctions End

(Bloomberg) --

Iran's Oil Minister Bijan Namdar Zanganeh said his country has taken “many measures” to ensure it can raise crude production in “a very short time” if U.S. sanctions are lifted, the state-run Shana news agency reported.

World powers have worked for months trying to broker an agreement between Iran and the U.S. that would restore Washington's membership of the 2015 nuclear accord abandoned by former President Donald Trump in 2018. A revived deal would ease sanctions, triggering the return of Iranian barrels to the market. No date has been set for what would be a seventh round of talks.

Despite the “extraordinary challenges” faced by the Iranian economy, the country can “easily” increase crude production to 6 million barrels a day, Zanganeh said, without detailing the preparations it has made or giving a precise time-frame. Iran's daily production hasn't been at 6 million since the 1970s and is currently about 2.5 million barrels.

Zanganeh's comments come after a breakdown in oil-supply talks between the Organization of Petroleum Exporting Countries and its allies last week, with demands from the United Arab Emirates blocking a deal. Negotiations are due to resume on Monday.

Iran is exempt from OPEC+ production quotas while it remains under sanctions, but the prospect of an influx of Iranian supply into markets once the penalties are removed could weigh on prices if the cartel continues to ease supply curbs.

“Returning to the market and regaining market share isn't a difficult task, though there will be a lot of pressure on the oil ministry and the next oil minister,” Zanganeh told Shana.

Zanganeh said “nothing will happen” to global markets if Iranian exports spike after sanctions are lifted, because “OPEC is wise enough, and the OPEC+ that's cooperating with OPEC are also wise people who will certainly understand and digest Iran's return very well.”

The OPEC veteran is set to retire from politics after he leaves office in early August, when hardline president-elect Ebrahim Raisi takes over government. Zanganeh told Shana that he would be happy to advise the new administration, but hadn't offered any suggestions for his successor.

“I wanted Iran's return to the oil market to happen under my watch because I know what path to take to become successful,” he said.

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