Iran said it has plans to double oil production next year, after Joe Biden sits as new US president, and after the US eases sanctions.
The Oil Minister of Iran, Bijan Namdar Zangeneh, was reported to have announced the government's intention of pumping 4.5 million bpd of oil and gas condensate (a liquid form of natural gas) next year, starting March 21.
To add to that, Iran will increase oil exports to 2.3 million barrels a day, if the US relaxes sanctions in the energy sector.
The projected exports are expected to cover 25% of Iran's budget for the next fiscal year, a sign that the government is trying to reduce its dependence on oil revenues.
Since US President Donald Trump abandoned the nuclear deal with Iran in 2018 and tightened sanctions, the country's oil production has nearly halved to 1.9 million barrels a day.
And, according to data compiled by Bloomberg, exports have dropped to 133,000 barrels a day, in which almost all of the shipments go to China.
However, additional exports from Iran will cause problems for OPEC +, which is trying to contain production in order to keep prices afloat.
Although Iran is one of the members of the coalition, the cartel exempted it from production cuts due to sanctions and economic difficulties.
Biden, who is due to be inaugurated as president on January 20, has made it clear that he wants to return the United States to the agreement that was made when he was vice president under Barack Obama.
Still, some traders doubt that the US will tolerate an increase in Iranian exports, especially at a time when demand for oil is constrained by travel restrictions.
"I don't believe we will see too much Iranian oil on the market in 2021," said Mike Muller, head of Vitol Asia, the world's largest independent oil trading house.
