Thursday, December 3, 2015

'We don't need permission' Iran won't wait to increase its oil output.

'We don't need permission' Iran won't wait to increase its oil output. (Taz).

Iran does not need permission to increase its oil production after the sanctions against are lifted, the Islamic Republic’s Oil Minister Bijan Namdar Zanganeh said.

He made the remarks while commenting on its recent letter to the Organization of the Petroleum Exporting Countries (OPEC), in which he asked the cartel to reduce production by at least 1.3 million barrels per day (mbpd), the oil ministry’s SHANA news agency reported Dec. 2.

Ahead of the upcoming OPEC meeting which is scheduled for Dec. 4, Zanganeh wrote a letter to OPEC chief Abdallah Salem el-Badri, saying that the cartel members should be committed to the ceiling level, which had been set at 30 mb/d.

Zanganeh said that he did not write the letter to the OPEC for approval. He added that the letter was written to remind OPEC about the commitments regarding the ceiling level as well as explaining Iran’s position.

The Iranian minister further said it is not the first letter that was sent to the organization members. He underlined that Iran was forced to exit the oil market illegally under the sanctions, emphasizing that Tehran doesn’t need any permission to return.

Tehran hopes to increase its oil production by 500,000 barrels per day immediately after the international sanctions’ removal.

Iran’s current oil production is estimated to be around 2.8 million barrels per day of which about one million barrels are exported.

One of the biggest mysteries in the oil market surrounds just how much oil Iran is hoarding at sea.

Iran claims it's not stockpiling oil in tankers in the Persian Gulf, but no one believes it. Up until recently, energy experts thought Iran's vessels held 30 million to 40 million barrels of oil.

But maritime surveillance firm Windward has harnessed sophisticated technology to determine Iran is actually hoarding 50 million barrels of oil. That's up nearly 150% from April 2014 when Windward started tracking this closely-watched metric.

It's important to remember the oil hiding at sea is ready to be shipped to a buyer -- likely in Asia -- at a moment's notice. It's already been pumped out of the ground, cleaned up and processed.

"Iran has been trying to downplay what they have in floating storage because they don't want those figures to spook the market," said Tamar Essner, an energy analyst at Nasdaq Advisory Services.

Platts said Iran is storing as many as 53 million barrels of oil and condensate at sea, up from a previous estimate of 40 million to 42 million.

"There's no real clarity in international oil data. It's got the precision of cutting your hair with a chain saw," said Kloza. Hmmm......We are heading to very interesting times. Fasten your seat belts.

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