A major business news website has said Iran is ready to cope with the worst case scenario for lowest oil prices.
The Bloomberg commented on the plunging oil prices and said “oil extended declines from the lowest price since February 2009 as Iran pledged to boost crude exports, bolstering speculation OPEC members will exacerbate the global oversupply.”
The website quoted Iran’s deputy oil minister for international and commerce affairs Amir Hossein Zamaninia as saying that “there’s absolutely no chance Iran will delay its plan to increase shipments even as prices decline.”
Oil has slumped to levels last seen during the global financial crisis as the Organization of Petroleum Exporting Countries effectively abandoned production limits to defend market share, fueling a record surplus. The glut will persist at least until late 2016 as demand growth slows and OPEC shows “renewed determination” to maximize output, according to the International Energy Agency.
“Iran, which expects international sanctions over its nuclear program to be lifted by the first week of January, has already secured customers for its planned supply expansion,’ Bloomberg quoted Zamaninia
The government is also preparing to offer oil and natural gas contracts to investors. The country pumped 2.8 million barrels a day last month, data compiled by Bloomberg show.
“Our general assumption is on a market with low prices, so the price can drop as low as possible as we are prepared for the worst case scenario,” Zamaninia said.
PressTV said that Iran currently exports about 1 million barrels per day (bpd) of oil to Asian clients and Turkey under a preliminary nuclear deal. According to tanker loading schedules, Iran’s crude oil exports are set to rise to a six-month high in December.
Shipments will total 1.26 million bpd of oil this month as international buyers are raising purchases in anticipation of sanctions being lifted, the Reuters news agency reported.
On Sunday, Minister of Petroleum Bijan Zangeneh said oil sanctions “will be completely annulled in the next few days’.
Zangeneh has said Iran will be able to add 500,000 bdp to its oil exports a day after sanctions are lifted and raise output to another 500,000 b/d within six months, raising total output to one million bpd.
In an interview with Bloomberg, Zamaninia said Iran has already secured customers for its planned supply expansion.
European oil buyers have held talks with National Iranian Oil Company (NIOC) officials in Europe and Tehran over the past year to resume purchases. South Africa has also discussed reviving shipments, while Asian customers have indicated their intent to increase imports.
The country has also lined up more than 50 oil and gas projects for investment. Last month, Tehran hosted international companies to unveil a new framework for oil and gas contracts and presented $30 billion worth of projects to investors.
The government plans to boost oil production to 5.7 million barrels a day and gas output to 1.4 billion cubic meters a day by 2021.
To achieve that, Iran needs $250 billion of investment in its oil industry between 2016 and 2025, including $176 billion in its upstream sector and another $77 billion in downstream spending, officials have said.