Iran to continue increasing oil output capacity, crude futures slip

Iran stood ready to continue increasing its production, possibly taking it past its pre-sanction levels towards the beginning of 2017.

Depending on market conditions, the Islamic Republic was ready to raise its oil output to 4.0m barrels per day over the next two to three months, Seyed Mohsen Ghamsari, the director for international affairs at the National Iranian Oil Company, said at the Argus Crude Forum, according to Reuters.

"We can increase crude production based on market requirement," Ghamsari said.

“Iran doesn’t plan to stop or cut oil output,” he added, according to another report.

NIOC may raise its production capacity to 4.3m barrels per day in the first quarter of 2017 and to 5.0m bpd in two to three years, he added, noting that the majority of any new production would be of the so-called 'heavy' variety.

"We believe that the market is more in favour of heavier grades and that's why we are going to introduce a new one."

In a statement issued on the sidelines of the G-20 meeting in Hanzhou, on 5 September, Saudi Arabia and Russia flagged their openness to cooperating in the energy sphere, subject to Iran participating in any accord.

"The statement was not dissimilar to others before it, in that the Saudis and the Russians remain “open” to a freeze but remain non-committal and continue to stress the importance of Iran’s involvement," analysts at Citi mused.

As of 1227 BST front month Brent crude oil futures were trading 0.591% lower to $47.35 per barrel on the ICE.