But how fast can the powerful OPEC producer ramp up production and exports?

Joining me to discuss this is Richard Mallinson, at Consultancy, Energy Aspect.

Richard, Iranian officials have in recent day, in recent months talked about ramping up production,

immediately after lifting the sanctions by five hundred thousand barrels a day.

How realistic is this?

Well, clearly, the Iranian governments got some pretty ambitious plans.

But I think, they're gonna have a little more of a gradual recovery.

They're depending on two things, one is to take existing fields and ramp up the amount of those producing,

and the second is to bring several new fields on line.

But with the existing fields, they face years without western technology, western investment,

and I think that the maintenance state of those fields may limit how much they can bring back overnight.

With the new fields, we've seen several years of delays,

and I think they're not necessarily all gonna be ready yet.

What are your estimates, for the increase in production and also exports?

So I think over the next couple of months,

we'll see Iranian production going up by say 250 to 400 thousand barrels a day,

depending on how many of those new fields come on line.

And I think almost all of that is going to go into the export market

because of present, the domestic market is well-supplied,

um... but it's exports say they really want to target, they really want to increase.

It's about then, can they find the buyers, can they

as they get back into market, Europe, other parts of Asia,

how easy is it to market their crude and to displace other exporters.

We can see from this chart here that

production and exports have really taken a hit under sanctions.

But any increase from here on in ? You know what affect will that have on price?

Well, as we can see before the latest round of sanctions,

the ones that are being lifted or implemented was producing about 3.6 million barrels a day

and exports were close to 2 million barrels a day.

That fell off a long way, and Iran wants to bring all of that back as quickly as it can.

The oil market was already oversupply, it has been for quite long time

and that's what's really driven prices lower.

Um... the quicker and the more that Iran can bring back into the market,

the more pressure it would put on prices,

and certainly the moment of the focus or the concern in the oil market is that

there gonna be a large return, very rapidly.

But I think if, as we get later in the year, we'll get a better picture of the Iranian recovery,

it's only going to be one of several moving parts

we're also going to be looking at the decline in the US production

the extent to which the rest of non-OPEC's supplies going down

and of course what other OPEC members are able to do.

And just on that point, oil prices are around 30 dollars a barrel.

So what happens when, you know,

you throw Saudi Arabia and other big Gulf producers into the mix

because they have shown no signs of relenting.

Um... you know, how does that competition play out now?

Well, I think, from my point of view

this 30 dollar price is not sustainable for the global market in the long-run.

But, all of the OPEC producers are generally putting as much oil as they can into the market that,

in part, about just generating whatever revenues they can to meet their budget,

but it's also about market share.

We've seen Saudi Arabia and Iraq increase their production significantly last year,

and they gonna want to sustain those levels,

even if they can't necessarily increase production further.

But they've also been putting oil into markets, particularly in Europe,

where they anticipate Iran is going to want to return.

So, they're trying to get in there ahead of time

and prevent or make it more difficult for Iran to win those buyers back.

And I think what we're likely to see is Iran, particularly but also Iraq

willing to offer discounts, to offer favorable terms

to try lure by as a way from Saudi Arabia and the other Gulf states,

and none of that is gonna make life within the OPEC anymore comfortable or anymore diplomatic.

Um... you know, speaking of some of the Iranian officials, they've said that they are not very keen to lose out on price.

So what are the tactics could they deploy?

Is it sort of oil-for-goods or other sorts of tactics, that means it may try and get ahead that way?

Well, this is a dilemma for Iran. On the one hand, it knows that to lure by it's back,

it needs to offer something attractive of favorable terms.

From the second, on the other hand, especially at current prices, if it offers cash discounts, that's gonna,

eat into the revenue it desperately needs for it's budget.

So, I think we will see them looking at what creative ways can they build buying relationships,

so exchanges favorable terms for instance, longer payment terms said the price is there

but refiners have a little bit longer before they need to meet that bill

which can really help them with cash flow.

But all of it, I think it's also going to be complicated, by the US sanctions that remain in place,

in particular, the ones that will make it difficult for Iran to sell and transact in dollars

because no US bank can be any part of the transaction.

Thank you, Richard.