Iran Continues Increasing Oil Export Amid Lack of Decision on Output Cap in OPEC’s Vienna Meeting

Iran has increased up oil exports off beating analysts’ prediction followed by lifting of UN sanctions in January. Around 20 European and Asian-owned supertankers have been shipping Iranian crude oil that helps the country to increase its export volume.

The Mid Eastern country has been reported to struggle in finding partners to ship its crude oil during April. But now more than one-third of Iran’s crude exports have been conducted by foreign vessels after arranging a temporary insurance for the shipments.

Some US restrictions on Tehran are still in force which discourages the ship owners to handle Iranian crude. The existing sanctions prohibits trade in dollars or restricts US firms including banks and reinsurers to get involved in trade with Iranian counterparts, reports Reuters. Iran has been in a desperate effort to regain its stake in the global oil markets following withdrawal of sanctions, imposed due to its controversial nuclear program.

In order to boost crude oil exports, Iran is also increasing its output. Considering Iran’s intention, OPEC has decided not to impose output cap during its last week’s meeting in Vienna on the argument that oil market is improving itself. OPEC members haven’t signaled Iran to suspend its plan for increased production during the Vienna summit on June 1, reports Bloomberg quoting Bijan Namdar Zanganeh, oil minister for the gulf state.  

Iran’s oil production has reached to the highest since 2011 off beating International Energy Agency’s prediction. But at the same time, prices of crude oil have returned back to around $50 per barrel since Nigeria and Canada too have increased their production to retain the market stakes following return of Iran. However, Iran’s efforts to recover lost output puts renewed pressure on global oil prices, analyzes Commerzbank AG and Barclays PLC.

Unlike past, tensions have been mounted prior to the OPEC’s Vienna summit centering a tug of war between Sunni-led kingdom and the Shiite led Islamic Republic. OPEC has failed to impose an aggregated production ceiling for the first time in years since December last.

Though June 1 meeting has also failed to make any headway in this regard, but it has been able to unanimously elect Nigeria’s oil minister The Australian Financial Review.        

Mohammed Barkindo as its new secretary general. The appointment appears following years of disagreement over the issue, according to a report published in

Following no decision on output cap, Iran’s oil production as well export has been increasing aggressively. The resumption of shipping Iranian crude by International carriers has been possible due to an increase in interim, limited, insurance cover by ‘P&I Clubs’.

‘P&I Clubs’ is a maritime mutual association that serves protection and indemnity insurance to shippers. The maritime association, which includes world’s top 13 ship insurers, has increased the amount of ‘fall back’ shipping insurance from €70 million to €100 million ($111.53 million) during April.

Iran has exported crude in a range of 2.1 mbpd (million barrels per day) and 2.3 mbpd during the months of April and May. The export volume has been increased from 1.3 mbpd recorded a year earlier. Foreign vessels are carrying Iranian crude mainly to India, China and Japan. However, at least four international tankers are shipping Iranian oil to Europe too.