Iran signals oil output boost as regional relations improve

Iran plans to raise oil production to near full capacity by the end of the summer, the country's oil minister has said.

Speaking to the energy committee in Iran's parliament, Javad Owji stated that the country had boosted oil production by 50 percent over the last two years and production is expected to increase to 3.4 million barrels a day (bpd), just below the capacity of 3.8 million bpd.

According to monitoring service TankerTrackers.com, Iran was able to ship 2.2 million bpd up to 20 August, as reported by Bloomberg - a marked increase on the first seven months of 2023, in which Iran export over 1.5 million bpd in a single month.

As well as oil, Iran also plans to increase its production capacity of natural gas by 500 million cubic meters per day (Mcm/d), according to S&P global. Its current production standing is at 1 billion cubic meters per day.

Included in this increase is the beginning of production from Phase 11 of Iran's South Pars gas field after decades of delays. The current output of phase 11 stands at 11 million cubic Mcm/d, although Iran plans to increase output to 56 Mcm/d.

Iran's increase in the production and export of energy comes as its relations with its Gulf neighbours strengthen, with Iran and Saudi Arabia reopening embassies following a Chinese brokered deal between the two last March.

Chinese Foreign Minister Wang Yi said that recent warming of relations between the two would lead to a "wave of reconciliation" in the region.

Along with deals between its neighbours, Iran has also entered into diplomatic talks with Washington and has agreed to free US citizens in exchange for the release $6 billion of Iranian assets frozen in South Korea.