BAKU, Azerbaijan, June 26. Iran's oil production could gradually increase by approximately 900,000 b/d, reaching a capacity of 3.8 mb/d, if sanctions are lifted, Trend reports.
As the International Energy Agency (IEA) estimates, Iran's status in world oil markets remains uncertain, at the same time, talks to revive the 2015 Iran nuclear deal, which would ease sanctions, have been on hold since September 2022. However, recent reports suggest the possibility of some sanctions relief for Tehran.
Despite facing financial restrictions, Iran managed to raise its crude oil output by around 130,000 b/d in 2022, averaging 2.5 mb/d. They have maintained brisk oil sales to China at an estimated 1 mb/d since 3Q2022.
Prior to the United States' withdrawal from the Joint Comprehensive Plan of Action (JCPOA) nuclear deal in 2018, Iranian oil exports, including condensates, exceeded 2 mb/d, the IEA noted.
Through increased exports and domestic production, Iranian crude output reached approximately 2.9 mb/d in May 2023 and has remained at that level throughout the forecast period. The IEA believes that Iran still maintains its extensive oil network, enabling it to ramp up production relatively quickly if sanctions are eased.
The National Iranian Oil Co likely shut in wells at high-cost offshore fields and performed maintenance at mature oil fields, possibly due to lower wellhead production. Shutting in output can benefit aging oil fields by allowing pressure to rebuild and facilitating easier restart of operations, the agency noted.
Regarding capacity building, Iran's progress has largely stalled due to the collapse of exports since the end of 2018 and the lack of foreign investment caused by sanctions. The previous round of international sanctions had already left the oil sector in urgent need of foreign capital and technology, particularly for enhanced oil recovery methods to sustain and increase output in older fields.
However, Iran is looking to the core West Karun oil fields of North and South Azadegan, Yaran, and Yadavaran to drive future growth, aiming for a 1 mb/d boost. Undeterred by sanctions, Iran expects to double the capacity at its southern Azadegan field to 320,000 b/d in 2023, which spans the border with Iraq.