Iran Begins Plan to Increase Crude Oil Exports

With the implementation of the nuclear agreement, Iran's Ministry of Oil announced that the initial plan to increase the country's oil exports by 500,000 barrels per day has started as of Sunday, January 17. According to the official Iranian news agency, IRNA, with the implementation of the Joint Comprehensive Plan of Action (JCPOA), 'all restrictions related to increasing Iran's crude oil exports have been lifted.' Iranian oil ministry officials stated that exports will increase from the current one million barrels per day to two million barrels per day. Bijan Namdar Zangeneh, the Minister of Oil, said, 'We believe that immediately after the lifting of sanctions, we can increase our oil production by half a million barrels per day and after six to seven months, we can increase total oil production by one million barrels per day.' Sanctions against Tehran had significantly reduced Iran's oil exports and the revenue generated from it. A large portion of oil revenue has also been blocked in other countries, which will be released with the implementation of the nuclear agreement. Iran's major customers in recent years have been China, India, Japan, South Korea, and Turkey, all of whom had also reduced their imports from Iran. In recent months, the Iranian Ministry of Oil has unveiled a new model of oil contracts with foreign investors. According to this model, the contracts are long-term, and foreign companies, including themselves, will be able to sell part of Iran's oil and are also expected to transfer modern technology to Iranian parties. Currently, the price of oil is close to $30 per barrel. During Mahmoud Ahmadinejad's presidency, when extensive international sanctions against Iran began, the price of oil had previously exceeded $140 per barrel. Some analyses indicate that the practical end of sanctions against Tehran will impact the oil market and that oil prices may drop again in the near future. The cost of oil extraction in Iran is lower compared to many countries, but on the other hand, the industries and technologies related to oil extraction in this country are outdated. Meanwhile, Saudi Arabia, a country with tense relations with Iran, significantly influences the performance of the Organization of the Petroleum Exporting Countries (OPEC), of which Iran is also a member.