International Energy Agency: Increase in Iran's Oil Production Concurrent with Implementation of JCPOA

The International Energy Agency, in its latest monthly report published on Tuesday, February 9, states that Iran has increased its oil production by 80,000 barrels per day since the implementation of the nuclear agreement in January, reaching a total of 2.99 million barrels per day. In this context, Bijan Namdar Zangeneh, Iran's Minister of Oil, mentioned on Saturday, February 6, that with the implementation of the Total contract by the end of February and the finalization of the oil sale contract with Eni of Italy in the near future, "Iran's crude oil sales to Europe have now exceeded 300,000 barrels." The report also indicates that the agency's forecast for excess oil in the market this year has increased compared to its previous report, attributing this to the increase in OPEC oil production during 2016. According to the official website of the International Energy Agency, global oil demand growth last year was 1.6 million barrels per day, but due to the slowdown in economic growth in Europe, China, and the US, this figure is expected to drop to 1.2 million barrels per day this year. The report continues that OPEC's oil production increased by 280,000 barrels per day in January, reaching 32.63 million barrels per day. However, non-OPEC oil production decreased by about half a million barrels compared to the previous month. Overall, global oil production in January fell by 200,000 barrels to 96.5 million barrels per day, yet this figure is still 1.75 million barrels above global demand for oil. In other words, global markets are still facing a surplus of oil. Bloomberg News, which has access to the detailed report from the International Energy Agency, has reported that besides Iran, Iraq and Saudi Arabia have also increased their production. This international body based in Paris, which advises 29 industrial countries on energy, states that in the short term, the risk of falling oil prices is high. Global oil prices have dropped from $108 in the second half of 2014 to about $30. Last month, oil prices fell below $30, and even OPEC oil prices reached $22 per barrel. The report adds that current OPEC oil production is 900,000 barrels per day more than the needs of global markets for this organization's oil. Iraq's oil production increased by another 50,000 barrels last month, reaching a record 4.35 million barrels per day. Saudi Arabia's production also rose by 70,000 barrels to 10.21 million barrels per day. The report further states that non-OPEC oil production is expected to decrease by up to 600,000 barrels per day this year, with the majority of this decline coming from US shale oil. Before sanctions, Iran exported up to 2.2 million barrels of crude oil daily, but sanctions reduced this figure to about one million barrels. After the lifting of sanctions, Iran announced that it would increase its production by 500,000 barrels per day in the first half of this year and by the same amount in the second half of 2016. In this context, Iran's oil reserves are reported to be "over 175 billion barrels."