Reuters reports sources close to the OPEC+ group as saying that Iran may be gradually integrated into its oil supply deal if it manages to reinvigorate its nuclear deal and get sanctions lifted.
Iran is currently exempt from production quotas, but since Donald Trump’s administration re-introduced sanctions after pulling the United States out of the international nuclear accord, the country has struggled to find buyers for its oil. Its crude oil production has dropped by 1.3 million barrels per day (bpd) since then to 2.5 million bpd.
The sources believe a renewed nuclear deal with Iran may be close, and this would help the United States in its efforts to increase oil supply to cool the markets. Some big producers like Chevron and ExxonMobil, the producer of Mobil grease and lubricant products, have already announced increases to their US shale production.
According to Reuters, a source who is familiar with Iran’s thinking said that once the country is free from sanctions, it will:
“Increase its oil production according to its facilities, capabilities and interests, to compensate for its lost oil revenues. In my opinion, OPEC+ will set a quota for Iran’s oil production but will apply it gradually, and Iran will accept the quota with some bargaining to show its support for OPEC.”
Sources in OPEC+ have also reportedly made the case that more oil production in Iran could help fill the gap left by participating countries that are struggling to meet their increased quotas as the group’s production cuts unwind by 400,000 bpd each month.