Iran Promises to Increase Oil Production to 4.7 Million Barrels Per Day

Continuing its efforts to gain a larger share of the global oil market, Roknoddin Javadi, Iran's Deputy Oil Minister, promised on Saturday, February 19, that Iran's oil production would increase to 4.7 million barrels per day in the coming years. He stated that achieving a production capacity of 4.7 million barrels of crude oil per day is one of the goals set in the country's sixth development plan. According to the state news agency IRNA, Javadi said, "In 2012, following the elimination of the quota system in the Organization of the Petroleum Exporting Countries (OPEC), the similarity of Iran's crude oil types to Iraq and the high flexibility of Iraqis in the market made this country a serious competitor for Iran, leading Iran to lose part of its export markets." Javadi emphasized the necessity of rapidly increasing oil production and exports, assuring all old and new customers that their needs would be met. He added, "If Iran's oil exports increase next year to between 2 and 2.2 million barrels per day, it means that an additional one million barrels will be added to our export capacity." The CEO of the National Iranian Oil Company estimated Iran's oil revenue at $37 billion per year, based on an average price of $50 per barrel. Javadi considered the recovery of Iran's "lost share" in the global crude oil markets as one of the challenges facing Iran's oil industry in the post-sanctions era. OPEC announced on Wednesday, February 9, in its latest monthly report that Iran's oil production in January reached its highest level since August 2012. According to the report, Iran produced 2.925 million barrels of oil per day in January, an increase of 38,000 barrels compared to the previous month. The OPEC report stated that the expectation of Iran's return to global markets was a major factor in the significant drop in oil prices last month. Oil prices have fluctuated significantly over the past decade, but have been on a downward trend since the second half of 2014, falling from $108 per barrel to below $30 per barrel. Four major oil exporters agreed conditionally on Tuesday, February 14, in a meeting in Doha to maintain their oil production levels to prevent further price drops in global markets. The oil ministers of Saudi Arabia, Russia, Venezuela, and Qatar announced that they would seek to gain Iran and Iraq's agreement as well. Meanwhile, Bijan Zanganeh, Iran's oil minister, emphasized that Iran is determined to increase oil production and will not relinquish its share in the oil market. Currently, OPEC member countries produce more than 700,000 barrels of oil per day in excess of demand. Iran's oil exports during the sanctions period reached about one million barrels per day. Zanganeh has repeatedly stated that Iran intends to increase its oil production by 500,000 barrels per day after the lifting of sanctions and will achieve the same increase in the second half of 2016.