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Sources close to the Organization of Petroleum Exporting Countries (OPEC) have told Reuters that OPEC+ is expected to persuade Iran to join the group’s cut deal if the U.S. sanctions are lifted from the country’s oil industry.
A successful outcome to the Vienna nuclear talks could lift U.S. sanctions on Iran’s exports, according to the International Energy Agency, potentially bringing 1.3 million barrels per day (bpd) of Iranian oil back into the market. That could ease tight global supply and take some heat out of a rally that has taken benchmark prices to just a few dollars short of $100 a barrel.
Iran is currently exempt from the existing deal between OPEC and allies, known as OPEC+, to limit oil supply due to the impacts of the U.S. sanctions.
“It is very likely OPEC will adjust Iran into the deal, as there is no other option,” said an OPEC+ source, who added that an agreement on reviving the nuclear accord looked close.
According to Reuters, a source familiar with Iranian thinking said Iran would first seek to restore its lost output, but would likely, after talks with OPEC+, agree to a quota. Iran is one of the five founding members of OPEC.
OPEC, in its latest monthly report, put Iran’s crude oil production in January at 2.503 million bpd, 21 percent more than the figure for December 2021.
Iran produced 2.482 million bpd of crude oil in December 2021, the report said citing secondary sources.
The Islamic Republic’s average crude output for the fourth quarter of 2021 stood at 2.480 million bpd indicating a 40,000-bpd increase compared to the figure for the first quarter of the year, the report indicated.
OPEC put the average Iranian crude output for 2021 at 2.405 million bpd, while the average output in 2020 was 1.988 million bpd.
These statistics show that although with the re-imposition of the U.S. sanctions, Iran’s oil production decreased; gradually the country has been able to compensate for part of the output decline.
The country’s heavy crude oil price also increased $10.91 in January, to register a 14.6 percent rise compared to the previous month, according to the OPEC report.
Iran sold its heavy crude oil at $85.59 per barrel in the mentioned month, compared to December’s $74.68 per barrel.
Based on the OPEC data, the country’s average heavy crude price was $54.38 in 2021.
