Iran Daily, Sept 8: Tehran’s Oil Exports Drop as Government Seeks Foreign Investment

PHOTO: President Rouhani with Spanish Foreign Minister Jose Manuel Garcia-Margallo on Monday

Despite the July 14 nuclear deal with the 5+1 Powers, Iran’s oil exports have fallen to a six-month low.

Tanker data projects Iranian sales of 1.02 million barrels per day in September, a 16% fall from the previous month. Decreasing imports by China are seen as a leading cause of the decline. Japan and South Korea are also reducing purchases.

Under the November 2013 interim nuclear agreement, Iran was permitted up to 1.1 million bpd in exports. However, Tehran was able to ship around 1.4 million bpd without punishment. Other oil was placed in storage on land and offshore on tankers in expectation of renewed sales when a final agreement was reached.

Oil Minister Bijan Namdar Zanganeh has pledged that Iran will regain its share in global oil markets, asserting that production will rise by 500,000 bpd once sanctions are removed and by 1 million bpd within the following five months.

Iran’s output is 2.8 million bpd, the highest level since 2012 but still far below the more than 4 million bpd produced that year.

The Government faces a challenge to further raise output and exports because of a lack of investment in oil fields amid the US-led sanctions, with almost all foreign companies withdrawing from projects.

Days after the July agreement, Industry Minister Mohammad Reza Nematzadeh said Iran was pursuing oil and gas projects worth $185 billion by 2020. As a start towards that goal, Tehran has been hosting a series of foreign leaders and business delegations, including the Foreign Ministers of Italy, France, and Britain and the Deputy Chancellor of Germany.

Both the Spanish Foreign Minister and Austrian President were in the Iranian capital yesterday.

President Rouhani told Spanish Foreign Minister Jose Manuel Garcia-Margallo: “Under the new circumstances and following the Vienna [nuclear] agreement, Tehran welcomes the presence of foreign investors and entrepreneurs, and Spanish companies can enter the Iranian market as well.”