Iran insists on boosting up its oil export

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Iran insists on boosting up its oil export to at least 1.5 million barrels per day (bpd) of oil, triple May’s expected levels under US sanctions, as a condition for staying in an international nuclear deal, sources with knowledge of Iran-EU talks were quoted by Reuters news agency as saying.

The figure was communicated in recent meetings between Iranian and Western officials, including Iranian Foreign Affairs Minister Mohammad Javad Zarif, but has not been set down in writing, four European diplomatic sources said.

The United States reimposed sanctions in November on exports of Iranian oil after US President Donald Trump, last spring, unilaterally pulled out of the 2015 accord between Iran and six world powers to curb Tehran’s nuclear program.

In an attempt to reduce Iran’s crude exports to zero, Washington ended, at the beginning of May, waivers that had allowed the top buyers of Iranian oil to continue their imports for six months.

The sanctions have already more than halved Iranian oil exports to one million bpd or less, from a peak of 2.8 million bpd last year. Exports could drop to as low as 500,000 bpd from May, an Iranian official told Reuters this month.

Iran has threatened to block the Strait of Hormuz – a major oil-shipping route – and disrupt crude shipments from neighbouring countries if Washington succeeds in forcing all countries to stop buying Iranian oil and fails at boosting oil export.

Iran’s Supreme Leader Ayatollah Ali Khamenei set out last year a series of conditions for European powers if they wanted Tehran to stay in the nuclear deal, including continued purchases of Iranian oil.

Khamenei did not specify which minimum level of oil sales Iran would accept to stick with the deal, or keep the Strait open.

According to one EU official, the Iranians have not been specific, but they wanted to ensure production returned to pre-sanctions levels. Other sources said Iran’s demand seemed to be in a general range of 1.5 million to two million bpd.

“Zarif said specifically that they want to sell two million barrels of oil [per day], basically the level Iran was exporting before Trump withdrew from the deal,” said a source present at the New York meeting in which the minister made the statement. “But I don’t think it is a serious demand. It isn’t possible and the Iranians know it isn’t possible.”

Zarif also said during the same visit to New York in April that Iran could only sell 500,000 to 700,000 bpd of oil.

Iran’s Deputy Foreign Minister Abbas Araqchi said last week that for Tehran to stay in the nuclear deal, Iranian oil sales should reach their pre-sanctions level, or at least “start the process of returning” to such a level.

Araqchi also said another Iranian condition was to have full access to oil-export revenues and to spend them as it pleased, not only on food and medicine as proposed by EU countries.

According to Iran’s budget for this year, one-third of the government’s income – $33.9 billion – should come from oil and gas exports.