Iran Oil Minister Completely Ignores Crude Export Limit Set in Nuclear Deal

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May 8, 2014

NITC-owned tanker, image: NIOC

By Golnar Motevalli and Anthony DiPaola

May 8 (Bloomberg) — Iran will export crude oil at the maximum level possible, regardless of restrictions imposed in an interim deal that offered the country some relief from sanctions over its nuclear program, Oil Minister Bijan Zanganeh said.

Iran shipped about 1.37 million barrels a day of crude on average during the first three months of the year, according to data from the International Energy Agency. Under an interim accord aimed at curbing the country’s nuclear program in return for easing some sanctions, Iran should limit exports to an average of 1 million barrels a day in the six months through July, the U.S. said in November.

“We don’t accept any figure or number that is told to us in terms of a measure for our own exports,” Zanganeh told reporters at an energy exhibition in Tehran today. “Iran will set Iran’s export level, and we will export at the maximum level possible.”

Crude output in Iran, the fourth-largest producer in the Organization of Petroleum Exporting Countries, plummeted in the last two years after U.S. and European Union sanctions targeted energy and financial industries. Iran pumped 2.84 million barrels a day of crude in April, down from 3.5 million in January 2012, according to data compiled by Bloomberg.

Iran’s deputy oil minister, Ali Majedi, said April 14 that he expects crude exports to average about 1 million barrels a day during the period covered by the interim deal.

LNG Exports

The country’s government is trying to attract foreign investment in crude, natural gas and chemical production as it seeks removal of the sanctions. The U.S. and its allies say Iran is working to develop nuclear weapons, a claim the country’s government denies. The interim accord between the two sides expires July 20.

Iran could sell liquefied natural gas to Europe within two years, Zanganeh said. Once a planned LNG export facility is completed, Iran could ship as much as 10 million metric tons a year of the fuel to Europe, Zanganeh said.

Transporting the fuel by ship in liquid form is the best method for Iran because it doesn’t have pipeline capacity to Europe, Zanganeh said. Building a pipeline that could transport gas to Europe through Turkey is a “long-term idea,” he said.

Copyright 2014 Bloomberg.

Further Reading: Iran’s Oil Sales Rise As Sanctions Pressure Eases

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