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Iran's economy is expected to grow 4-5.5 percent due to higher oil production [Getty File Photo] |
Iran has said it plans to increase oil production by 500,000 barrels per day now that sanctions have been lifted under a nuclear deal with world powers, according to Al Jazeera.
Analysts say the decision is likely to bring down the price of oil further in the world market.
Roknoddin Javadi, deputy oil minister, said Iran is determined to retake its market share, which collapsed after the sanctions were imposed in 2012.
His comments were posted on the ministry's website on Monday.
Iran used to export 2.3 million barrels per day but its crude exports fell to one million in 2012.
Oil prices have recently fallen to about $28 a barrel, a 13-year low.
The UN nuclear agency, IAEA, certified on Saturday that Iran had met all of its commitments under last summer's agreement, prompting the lifting of sanctions.
And on Monday, Yukiya Amano, the IAEA's head, arrived in Tehran for talks with Iran's President Hassan Rouhani.
Amano will also meet the head of Iran's atomic organisation. The IAEA's monitoring and verfiying of Iran's atomic programme is expected to be on the agenda.
With the lifting of the sanctions taking centre-stage, the UAE's energy minister said in Abu Dhabi on Monday that any extra supply of crude oil would "harm the market."
In the first comments by an Arab Gulf member of OPEC about Iran since most sanctions were lifted, Suhail bin Mohammed al-Mazroui said any new production that comes into the market would delay the time for the market to balance itself.
"... Does Iran have the right to do so? Yes of course; they are a member of OPEC and are entitled to that ... but is this going to help [the] situation? No," he said.
"We are having an oversupply and anyone who will introduce more supply in current situation will make it worse."
On Monday, OPEC gave reassurance the price of oil will rebound later this year, saying non-OPEC countries will be forced to slow down production, thereby reducing supply and boosting the price globally.
Jochem Wermuth, a market analyst in Abu Dhabi, said it is "unlikely" that oil prices will ever go as high up as the levels of July 2008, when it hit $147 per barrel.
"I would think that what the market would see is a further fall in the oil price," he told Al Jazeera.
"We think that it is a structural fall in the oil price. We don't think it will swing up again soon, or ever indeed."
Moody's, the credit rating agency, said the sanctions relief will boost liquidity and economic growth in Iran.
Moody's said Iran's increased oil production "will contribute to higher growth" next year, with "positive spillover effects" on higher investment and consumption spending.
Iran's economy is expected to grow four percent to 5.5 percent in 2016 and 2017, largely due to higher oil production.
