Iran will hike actual oil output to just over four million barrels per day (bpd) from November 1 in line with a deal at the Organization of Petroleum Exporting Countries (OPEC), a senior official said yesterday. OPEC members agreed last month to raise output by 500,000 bpd from Nov-ember 1 and appeared to allocate the increase among members based on capacity and existing output.
Figures published on OPEC’s website after the September meeting put Iran’s supply allocation from November 1 at 3.817 million bpd.
If that figure was implemented, Iran would have had to cut production from what industry estimates say was the country’s actual production of 3.869 million in August.
OPEC has not clearly detailed how allocations were being made or which figures were being used as the basis, although it dropped quotas. Analysts say this could open the way for members to differ about what they consider their agreed output levels.
For example, OPEC relies on industry estimates to calculate output, a move that aims to avoid disputes between members. But Iran says such sources underestimate its output and capacity.
Asked how much oil Iran planned to produce after November 1, Javad Yarjani, the head of OPEC affairs at the Iranian oil ministry, said, “I said about four million, it can be a little bit more. We have to wait till the time but the important thing is there is no such thing as a quota. There have been agreed production levels. But they cannot be referred to as a quota.”
He said the basis for the calculation was Iran’s output in September 2006 before OPEC announced a 1.7 million bpd cut, followed last month by its agreement to increase output again.
Yarjani said Iran’s own “sovereign” estimate of production in September 2006 was 4.1 million, from which Iran then cut 249,000 bpd – its share of the 1.7 million bpd OPEC reduction.
Yarjani said that under last month’s deal, OPEC took into account 900,000 of extra supply already in the market and then agreed to add 500,000 bpd more from November 1. Yarjani said this put Iran’s share of the 1.4 million bpd addition at 196,000 bpd.
Estimates lead to Iran’s output target of 4.047 million bpd, Javad Yarjani, the head of OPEC affairs at the Iranian oil ministry, said, although he added output could not be guaranteed “exactly barrel by barrel” and held the target as being “almost 50,000 barrels” more than four million bpd.
However, Iran’s output target would be lower than Yarjani’s figure if the basis was the September 2006 actual output of 3.875 million bpd, as cited by OPEC in its monthly report.
Yarjani disagreed with such estimates. “There is a misrepresentation by secondary sources. They have continuously underreported Iran’s production capacity and actual production. That is the source of differences,” he said.