Zangeneh Criticizes Domestic Opposition and Delays in Oil Contracts

Iran's Oil Minister Bijan Zangeneh stated that if domestic opposition to new oil contracts had not delayed their signing, and if Iran's oil exports had reached four million barrels per day, "the U.S. would not have been able to sanction Iran's oil." He also deemed it unlikely that Total would receive an exemption from U.S. sanctions and remain in Iran. In an interview with the House of Parliament's website on Friday, July 8, Zangeneh said, "If there had been no delays in the Oil Ministry's work and five more contracts like Total had been signed, the country's situation would not be as it is today." According to Zangeneh, if Iran's oil exports had reached four million barrels per day, "the U.S. could not have sanctioned Iran's oil, just as it could not sanction Russia's oil and gas because the volume of Russian oil and gas production was such that the market could not bear its exit." During the previous round of sanctions from 2012 to the end of 2015, Iran's oil exports decreased by 1.2 million barrels per day, reaching about one million barrels. According to ISNA, Iran's oil exports had recently reached two million and 700 thousand barrels after the JCPOA. Following comments from a U.S. official about pressuring Tehran's customers to "reduce their purchases of Iranian oil to zero" by next November, a U.S. State Department official explained that Washington is trying "to convince as many customers as possible to completely cut their purchases of Iranian oil." Helima Croft, a commodity market expert at the Royal Bank of Canada, stated in an interview with CNBC that Iranian oil exports are expected to decrease by 700 thousand barrels per day by the end of the year. In the fall of 2015, Iran introduced new oil and gas contracts to foreign companies, aiming to increase production to six million barrels per day. However, strong opposition from conservatives and the Supreme Leader delayed the implementation of the IPC until 2017. Total and Iran signed a 20-year contract for the development of Phase 11 of South Pars on Tuesday, July 12, 2017. The signing of this contract also provoked a strong reaction from members of the Stability Front in Parliament and some close associates of the Supreme Leader. After the U.S. withdrew from the JCPOA, however, this major oil and gas company announced that it would halt the implementation of Phase 11 of the South Pars project if it did not receive an exemption from the U.S. While 35 days remain in the 60-day period for this company to obtain an exemption from the U.S., Zangeneh predicted that it is unlikely Total will receive an exemption to operate in Iran. He also mentioned that Total has so far spent 60 million dollars on this project. According to Zangeneh, if the Chinese company, which is the second participant in this contract, is not willing to replace Total, the Iranian company Petropars will take its place. Reuters reported on Thursday that the U.S. wants to pressure Saudi Arabia and other Gulf countries to ensure that they will inject enough oil into the market when implementing sanctions against Iran. Meanwhile, Bloomberg and Reuters reported on Wednesday, citing informed sources, that Saudi Arabia plans to raise its daily production to 10 million and 800 thousand barrels next month, the highest level since November 2016. The country's production last month was only 10 million and 30 thousand barrels. In other words, Saudi Arabia aims to increase its daily production by 770 thousand barrels.