Iran and the Global Oil Landscape
Iran, OPEC’s number 3 crude oil producer, is expected to raise its oil exports to around 1.65 million barrels per day in March. Previously, Iran was exporting about 1.5 million barrels per day. With the rise in exports, the state-run National Iranian Oil Company plans to increase shipments to several countries throughout Europe. The National Iranian Oil Co. is expected to ship around 250,000-300,000 barrels per day to Europe beginning on March 1. France is contracted to receive about 200,000 barrels per day, while Spain is set to receive about 35,000 barrels per day. Russia and Greece are also expected to receive shipments from Iran.
France, Spain, Russia, and Greece are the first buyers from Europe of Iranian crude oil after sanctions and trial cargoes were lifted from Iran in February. Iran is trying to regain market share in Europe following the lifting of international sanctions. Iran’s oil exports rose from 500,000 barrels per day to 1.5 million barrels per day in February. The international sanctions had cut Iranian crude exports from a peak of 2.5 million barrels per day before 2011 to just over 1 million recently. Iran has said that it would boost output by over 1 million barrels per day within a year to reach the pre-sanction production levels.
These increases in exports come at a time of global oversupply with producers of oil around the world pumping thousands of barrels every day in excess of demand. Oil prices sit at around $37 per barrel, the lowest amount in nearly 11 years. Other major oil producers including Saudi Arabia, Qatar, Venezuela, and Russia agreed last month to pause output at January levels in what was the first oil pact in 15 years. Iran would consider a pact once their output reaches pre-sanction levels.