Iran returns to allowed level of oil output

Business Materials 13 April 2017 11:11 (UTC +04:00)

Baku, Azerbaijan, Apr. 12

By Dalga Khatinoglu – Trend:

Iran’s oil output increased to 3.819 million barrels per day (mb/d) in February, but in March the country cut the amount to 3.790 mb/d – an output level allowed by the OPEC deal.

OPEC’s monthly report, released Apr. 12, says Iran decreased crude oil production by 28,700 b/d in March as compared to February.

According to OPEC’s oil cut deal, achieved Nov. 30, 2016, OPEC members should decrease oil output by 1.2 mb/d in 1H17. Nigeria and Libya are exempt from the deal and Iran was allowed to increase the output by only 90,000 b/d to 3.797 mb/d.

The report says OPEC’s total oil output decreased by 152,700 b/d in March to 31.928 mb/d, month-to-month. The volume in 2016 was 32.492 mb/d.

Iran’s heavy oil price decreased by 5.4 percent in March as compared to February, to $50.27 per barrel, while the country’s oil price in 1Q17 increased by $23.3 to $51.71 per barrel.

Iran’s oil output in 2016 and 2015 was 3.505 mb/d and 2.836 mb/d, respectively.

According to the OPEC report, the demand for OPEC crude in 2016 stood at 31.7 mb/d, which is 1.9 mb/d higher than the 2015 level.

In 2017, demand for OPEC crude is projected at 32.2 mb/d, around 0.6 mb/d higher than the 2016 level.

OPEC members are preparing to launch a new round of negotiations next month to extend the oil cut deal in 2H17 to push oil price high.

The 12 non-OPEC producers, including Russia, also have promised to decrease their output by 558,000 b/d in the first half of this year. Their compliance was estimated at around 60 percent compared to OPEC’s up to 90 percent compliance.

Iran’s Oil Minister Bijan Namdar Zanganeh announced Apr. 12 that the country plans to increase oil output to 4 mb/d by March 20, 2018.