Iran oil exports reach pre-sanctions peak on condensate sales boost: report

Iran’s total sales of crude oil and condensates likely hit around 2.8 million barrels per day (mbd) last month, close to a 2011 peak in shipments before the imposition of sanctions, Reuters reported, citing two sources familiar with the matter.

The increase in shipments from around 2.5 mbd in August comes mainly from condensate, a light oil often produced with natural gas that is excluded from OPEC supply quotas.

Condensate sales for September crossed 600,000 barrels per day (bpd) in response to strong demand in Asia, the sources said, adding that condensates rather than crude oil will drive export growth for the rest of the year, driven by developments at the giant South Pars gas field.

Iranian ports loaded 2.153 million barrels of crude and 486,000 bpd of condensate last month, putting the month’s total at 2.639 mbd– excluding condensate loaded out of storage, according to Reuters data.

Sales of condensate could hit 800,000 bpd this month, indicating further draws from floating tankers, one of the sources said.

Iran, alongside Nigeria and Libya, has been exempted from a surprise OPEC deal last week to freeze output, as the country looks to restore output to pre-sanctions levels. The three countries have been allowed by the cartel to produce at “maximum levels that make sense,” agencies reported.

Nevertheless, the country has surprised the market by boosting production sooner than expected to 3.63 mbd in August, up 25 percent from the end of 2015, according to OPEC.

The Middle Eastern producer has said it plans to raise output to 4 million bpd, although some analysts do not see this happening soon.

“Iran now has increased its production by 800,000 bpd since the lifting of sanctions and we don’t expect any further additions to Iranian production until later in 2017 at the earliest, due to the need for new investments,” Abhishek Deshpande, chief energy analyst at Natixis said in a recent note.