There are indications that Iran is expecting the U.S. to ease some sanctions under Joe Biden presidency according to reports, and is therefore preparing to raise oil production.
According to President Hassan Rouhani’s, Tehran will “prepare resources and oil-industry equipment for the production and export of oil in line with current capacity within the next three months,”. “We’re ready to quickly raise oil production,” he said.
Rouhani said that after a 2015 nuclear deal with the U.S. and European powers, Iran was able to lift overseas sales to 2 million barrels a day.
Biden, who is scheduled to be sworn in as president on Jan. 20, has signalled he wants to bring Iran back into the accord that was brokered when he was vice president under Barack Obama, but which the U.S. abandoned in 2018.
JPMorgan Chase & Co. said Iran could raise crude exports by as much as 1.2 million barrels a day next year if it strikes a new deal with Washington. A production boost of that magnitude would cause problems for OPEC+, which is trying to keep output down and bolster prices in the face of the coronavirus pandemic. While Iran is an OPEC+ member, the cartel has exempted it from production cuts due to the sanctions and its economic strife.
Since U.S. President Donald Trump walked away from the nuclear deal and tightened sanctions, Iran’s overall oil production has almost halved to 1.9 million barrels a day. Exports, as high as 2.6 million barrels a day in 2017, have dropped to just 133,000, according to data compiled by Bloomberg. Almost all Iran’s shipments go to China.
Iran’s Oil Ministry has not officially commented on crude production and export figures since 2018.