Despite US sanctions, Iran harbors new plans for oil production; OPEC gives positive comments about the market

On August 10, Iran's semi-official Tasnim news agency quoted the CEO of the National Iranian Oil Company (NIOC) Mohsen Khojasteh-Mehr as saying that the country plans to increase oil production by 250,000 barrels per day by the end of this summer.

Iran is increasing oil pumping into the international market. (Source: NY Times)

Mr Khojasteh-Mehr said that under the plan, Iran's crude oil production will reach 3.5 million barrels per day by the end of the summer, the latest sign that Iran is increasing its oil output to international markets despite pressure from US sanctions.

Iran's crude oil exports have been restricted since 2018 when former US President Donald Trump withdrew from the 2015 Iran nuclear deal and reimposed sanctions aimed at curbing Tehran's oil exports.

Reports earlier this year showed that Iran's oil production capacity had been restored above 3.8 million barrels per day for the first time since 2018 when Washington imposed sanctions on Tehran.

Iran's crude oil exports are also close to 2.2 million barrels per day, the level recorded before the US imposed sanctions in 2018.

Iran's oil exports in July 2023 increased 41% year-on-year to a five-year high, Central Bank of Iran Governor Mohammad Reza Farzin said.

* On the same day, Arab News quoted the latest monthly report of the Organization of the Petroleum Exporting Countries (OPEC) as saying that the outlook for the world oil market will improve in the second half of this year and global oil demand will be strong in 2024 as the world economic growth outlook improves.

OPEC's optimistic assessment comes as global oil prices hit their highest levels since January 2023. Tight supplies have fueled the upward momentum in oil prices. OPEC's monthly report also showed that Saudi Arabia has fulfilled its commitment to voluntarily cut production in July 2023.

In its latest report, OPEC forecast world oil demand to grow by 2.25 million barrels per day in 2024, compared with an increase of 2.44 million barrels per day in 2023. Both forecasts were unchanged from last month's report.

OPEC's report pointed out that in 2024, the steady growth of the global economy will boost oil demand, as China's economy continues to show signs of improvement.

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