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Iran’s oil chief defiant, says country ‘not planning’ to cut production

October 1, 2018

As Tehran braces for the Trump administration to reimpose harsh sanctions on its energy sector, Iran’s leading oil official on Monday said the Islamic Republic has no plans to cut production and could soon start selling oil on its stock market.

“We are not planning on decreasing oil production,” Ali Kardor, head of the state-run National Iranian Oil Company (NIOC), said according to the Mehr news agency. Mr. Kardor added that Iran will also assure its foreign customers have “full insurance coverage for [their] oil tankers.”

Early Monday’s oil markets were already reacting to the approaching U.S. sanctions, with traders sending crude prices closer to their highest since November 2014.

Oil has been in the spotlight since President Trump withdrew the U.S. from the 2015 Obama-era nuclear agreement with Tehran in May and reimposed sanctions on the Islamic Republic.

Even harsher penalties are set to start on Nov. 4, punishing countries who buy Iranian oil by blocking their access to U.S. markets and financial institutions.

Leading U.S. officials, led by Mr. Trump and Secretary of State Mike Pompeo, have vowed to reduce Tehran’s oil exports and revenues to zero in an effort to squeeze Tehran into curbing its aggressive behavior across the Middle East.

The moves have sent Iranian oil exports plunging more than 35 percent since April, a painful cut in revenues when Tehran is facing popular protests over the economy and a currency now trading at or near historic lows.

Some Iranian oil buyers, such as South Korea and France, have halted their purchases completely while China and India, the biggest buyers of Iranian crude, are now buying far fewer barrels.

Iranian officials have voiced all sorts of ideas to sidestep the U.S. sanctions. On Monday, Mr. Kardor added to them, stating that Iran may soon start offering oil on its stock exchange, according to the Islamic Republic News Agency (IRNA).

IRNA quoted Mr. Kardor as explaining that one million barrels, for export only, could be offered as early as next week. He also said preliminary talks were underway with China to trade oil on its stocks market.

Separately on Monday, top Iranian officials again threatened to consider closing off the Strait of Hormuz, the major shipping route located between Oman and Iran where nearly one-third of the world’s sea-traded oil passes through daily.

“This isn’t a threat but a reality,” Deputy Foreign Minister Abbas Araqchi said according to IRNA. “It’s obvious that all of the countries in the Persian Gulf want to sell the oil they produce, and the world needs the oil and energy of the region.”

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