Iranian officials have repeatedly rebuffed calls by other oil producers to halt or cut production. Tehran appears determined to reclaim market share lost as a result of EU and US sanctions imposed in recent years over its nuclear program.
Oil Minister Bijan Zangeneh has ridiculed the idea of a production freeze, calling it a “joke.” In his telling, Iran will only join talks to this end after it has reached its pre-sanctions output of 4 million barrels per day (bpd). In fact, since the Jan. 16 implementation day of the Joint Comprehensive Plan of Action (JCPOA), Tehran has followed through and increased production. Though slower than predicted, some 300,000 bpd have been added to Iran’s output, which now amounts to 3.2 million bpd. This has enhanced the oversupply in the international markets, thereby contributing to the prolonging of the low oil price cycle. Indeed, the dramatic oil price decline since mid-2014 has obviously hurt Iran, which is a major oil producer. Income from oil exports has crumbled accordingly, putting the Iranian government under severe pressure.
