Iran crude oil exports hit five-year highs, thanks to the lifting of sanctions in January imposed by the Obama Administration on the country's nuclear program, according to Reuters. It is all geared up to pump oil at record highs. According to data compiled by Thomson Reuters Supply Chain & Commodities Research, Iran exported 576,000 barrels per day (bpd) to India in August — up 10% since July.
Prior to imposition of sanctions, Iran used to be India’s second-largest oil supplier. Iran is confident its production may reach pre-sanction levels now that its exports have hit 2.11 million barrels of oil per day in August — a 15% increase since July. Prior to the informal talk in September during the International Energy Forum in Algiers over output freeze, Iran contends that pre-sanction levels need to be reached.
During an interview with Bloomberg in Singapore, director for international affairs at National Iranian Oil Company Mohsen Ghamsari said: “We are not very far away from our pre-sanctions peak and we will soon attain that share. Our exports peak is above 4 million barrels a day, and we have plans for that and are waiting for the right conditions.”
The Organization of Petroleum Exporting Countries (OPEC) member plans to double its crude exports, mainly to reclaim its spot as the second-largest producer in the OPEC.
However, OPEC meetings have largely failed to bear fruit; this time around the situation is no different since Iran continues to pump record levels. For Iran, it is too early to talk about freezing production. The world’s largest oil exporter, Saudi Arabia has agreed to collaborate with Russia, expressing hope that the meeting in Algiers may lead to an agreement. Both Russia and Saudi Arabia are looking to ease market rout. However, Saudi Arabia’s Energy Minister Khalid Al-Falih believes “there’s no need to freeze production now.”
Following the recent updates, the United States Oil Fund LP (ETF) (NYSEARCA:USO) closed at $10, down by 1.38% while the United States Brent Oil Fund, LP (NYSEARCA: BNO) closed at $13.5 down by 1.03%.