Iran's Hope for Oil Exports to Return to Pre-Sanction Levels

The CEO of the National Iranian Oil Company has told Reuters that Tehran hopes to restore its oil exports to pre-sanction levels if a comprehensive nuclear agreement is finalized, with negotiations ongoing with world powers. Roknoddin Javadi, the CEO, stated on May 17 that "we hope to reach an oil export level equivalent to what we had before the sanctions." He added that this means "2.5 million" barrels per day. According to this senior oil industry official, such a goal is achievable "within three months." Tehran and world powers are negotiating a final agreement on the nuclear program, which, if finalized by July 1, is expected to curb some of Iran's nuclear activities and provide a pathway to end sanctions against the country. International sanctions and unilateral sanctions from Western countries have significantly impacted Iran's oil exports, reducing them to less than half of previous levels, bringing them down to nearly one million barrels per day. Mr. Javadi stated that if the nuclear agreement is finalized, Iran could regain the market it lost in Asia, where its current major customers are located. He mentioned that this depends on prices and market conditions, but Tehran will return to its "traditional trade" that it previously had. Reuters notes that the oil market reached its best conditions in early May 2023 since 2015, yet this amount is still nearly half of the trading volume in June of the previous year. Oil prices have also been declining. The CEO of the National Iranian Oil Company also expressed doubt that OPEC, the oil-producing countries, would decide to reduce export levels during their representatives' meeting on June 5. He emphasized that discussions about Iran's better position in OPEC will depend on the suspension of sanctions. Tehran has repeatedly called for a reduction in oil exports from OPEC members to increase prices. At the same time, it claims that any potential increase in its exports will not lead to a drop in oil prices. Reuters states that Iran hopes other OPEC members will make room for increased exports, but currently, it seems that other countries in the organization are unwilling to reduce their exports.