Managing director of the National Iranian Oil Company (NIOC) Ali Kardor said Tehran has no plans for any reduction in the country’s oil output despite the looming US sanctions.
"We are not planning on decreasing oil production, and we have even postponed the maintenance operations"in oilfields so as to keep the oil flowing as before, Kardor stressed.
He assured buyers of covering insurance to oil vessels, saying that they will provide a "full insurance coverage for oil tankers" shipping Iranian oil to foreign markets, Mehr News Agency reported.
Kardor touched upon Iran’s oil sale trends, saying, the country has always sold its oil based on long-term contracts and single batch shipments.
The statement was made against the backdrop of intensified trading activity of 'bulls.' Bulls are investors who invest in a security expecting that the price will rise. Brent oil futures for December delivery hit $83.18 per barrel today. November U.S. West Texas Intermediate (WTI) crude futures rose to $73.53 per barrel.
The head of the Iranian section of the Center for the Study of Countries at the Middle East of the Institute of Oriental Studies of the RAS, Nina Mamedova, speaking with Vestnik Kavkaza, noted that Kardor's statement sounds very optimistic. "Iran will have few real opportunities to continue under U.S. sanctions. Of course, Iran has accumulated experience of the previous period under sanctions - but if Tehran agreed to sign a nuclear deal, it did not have enough bypass channels to maintain exports at the level that is needed to obtain the necessary funds," she pointed out, adding that new U.S. sanctions make it difficult to even export to Asia.
At the same time, Iran will be able to somehow compensate for the loss of some exports due to the increase in prices due to the activation of bulls in the market. "As soon as Iran cuts oil production and exports, oil prices start to rise, which will offset Iran's losses from export cuts. I think Iran will have to increase the capacity of oil refineries. But it is hardly possible without foreign investments, mainly from China. In any case, it is unlikely that Iran will be able to keep production levels after sanctions will be imposed," Nina Mamedova said.
A leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, in turn, stressed that the expected U.S. sanctions do not prohibit Iran from extracting oil. "Iran is banned from selling its oil, and the reduction in output will be a consequence. Iranians say that their trade turnover with China is increasing, which is also entering the trade war with the U.S. There is also Tehran's hope for the creation of a mechanism by Europeans and Russia, which will allow them to trade Iranian oil, excluding dollars from mutual settlements," he said.
"So far, everything is not in Iran's favor, as India and Japan are reducing purchases of Iranian oil. But there also are some successes, as Iranian tankers started to disappear from satellite tracking screens. Its vessels were tracked during the last sanctions period, and now Iran is trying to block it, so that no one can see how Iran's oil goes to the world market. If new instruments are not introduced, Iran will not be able to maintain production without export for a long time. It will be able to pump oil into tankers for a month, but when they are filled, it will be necessary to reduce production volumes. In the end, everything depends on China and Europe, their desire to resist the U.S. sanctions," Igor Yushkov concluded.
