Iran plans to increase its crude oil output to 4 million barrels daily, the country’s Tasnim news agency reported. No specific sources for the plan were provided but the original report in Tasnim said that “An economic council headed by Iran’s interim president Mohammad Mokhber has approved a plan to raise the country’s oil output from 3.6 million barrels per day to 4 million barrels per day.”

Iran has shown a strong desire to boost its oil production despite facing U.S. sanctions that have significantly impacted the market for Iranian oil. Nevertheless, Iran has reported a recent increase in crude exports, reaching an average daily of 1.56 million barrels per day in the first quarter, the highest in six years. In comparison, the country exported an average of 1.29 million barrels per day last year, marking a 50% increase from the previous year.

“The Iranians have mastered the art of sanctions circumvention,” Fernando Ferreira, head of geopolitical risk service at Rapidan Energy Group, told the FT at the time. “If the Biden administration is really going to have an impact, it has to shift the focus to China.”

The announcement of plans to increase production comes after Tehran signed oil project development agreements totaling $13 billion, which are expected to contribute an additional 350,000 barrels per day to Iran’s daily output.

As of April, Iran’s oil production stood at approximately 3.2 million barrels per day, according to OPEC’s latest Monthly Oil Market Report. This is a decrease from over 4.3 million barrels per day prior to the U.S. sanctions being reinstated, but there is room for further expansion. Former oil minister Bijan Zanganeh has suggested that Iran could potentially increase its average daily production to 7 million barrels in less than a decade, at an estimated cost of $70 billion.

Author: Dr. Arsham Ghasemi