Iran, OPEC’s No. 3 producer, is expected to raise its oil exports in March to around 1.65 million barrels per day from 1.5 million bpd a month earlier on the back of higher crude shipments to Europe, two industry sources told Reuters on Thursday.
State-run National Iranian Oil Co. (NIOC) is expected toship around 250,000-300,000 bpd to Europe this month after it finalised term deals with France’s Total and Spanish refiner Cepsa, effective from March 1, said the sources, who are familiar with Iran’s exports.
The French oil major has a contract to buy about 200,000 bpd, while Cepsa’s deal was for about 35,000 bpd, one source said. Total is expected to lift at least 5 million barrels in March, the source added.Litasco, the trading arm of Russia’s Lukoil, Cepsaand Total have become the first buyers in Europe after thelifting of sanctions and lifted trial cargoes in February,trading sources told Reuters.
Hellenic Petroleum, Greece’s biggest oil refiner,has said it will receive its first shipment of Iranian crudeoil at the end of March. Tehran is working to regain market share, particularlyin Europe, after the lifting of international sanctions in January. Oil exports rose by 500,000 bpd to 1.5 million bpd in February, a senior NIOC official said on Tuesday.
The sanctions had cut Iranian crude exports from a peak of2.5 million bpd before 2011 to just over 1 million bpd in recentyears.
Tehran has said it would boost output immediately by 500,000bpd and by another 500,000 bpd within a year, ultimatelyreaching pre-sanction production levels of around 4 million bpdseen in 2010-2011.
But even a gradual increase in its exports would come ata time of global oversupply, with producers around the worldpumping hundreds of thousands of barrels every day in excess ofdemand. Oil prices are near 11-year lows at around $37 a barrel.
Saudi Arabia, Qatar, Venezuela and non-OPEC Russia agreedlast month to freeze output at January levels in the firstglobal oil pact in 15 years.
Iranian Oil Minister Bijan Zanganeh said last week thefreeze was “laughable”. Iranian sources say the country would beprepared to discuss a production pact once output reaches pre-sanctions levels.