Iran’s oil minister Javad Owji claimed on Wednesday that the country is producing 3.4 million barrels per day (mb/d) of crude oil, about 1.2 mb/d more than in mid-2021.

In recent months, Owji has consistently reported oil production growth figures that contradict estimates from international entities.

Both OPEC and the International Energy Agency, put the country’s crude oil production at 3.1 mb/d in September, when Owji had claimed 3.3 mb/d output level for that month.

A possible reason for Owji’s exaggerated claims is repeated promises by President Ebrahim Raisi’s administration to boost the energy industry, while e its overall economic performance has remained dismal. Annual inflation hovers around 50 percent, while the government is in a race to print more money. The national currency, rial, is near its historic lows at 520,000 per US dollar.

Iran used to produce about 3.8 mb/d of crude oil as well as 650,000 b/d of gas condensate (ultralight oil) before the US imposed sanctions in 2018, when it withdrew from the Obama-era JCPOA nuclear accord and opted to put ‘maximum pressure’ on Tehran.

From the higher pre-sanction volumes, roughly 2.5 mb/d was exported and about 1.95 mb/d was consumed domestically. Currently its domestic consumption stands at 2.2 mb/d due to operational of new phases of Persian Gulf Star refinery, which refines gas condensate.

How much oil Iran produces?

According to Kpler trade intelligence firm’s tanker tracking data, Iran’s crude oil and gas condensate exports reached 1.812 mb/d together in October, the highest since 2019 and about 370,000 b/d more than in September 2023. However, a part of this growth is due to selling its floating oil storage, not production growth.

Iran’s crude oil floating storage has declined 10 million barrels during October, or 322,000 b/d. Iran exported 1.5 mb/d of its surplus oil production as well as 322,000 b/d of flouting stockpile.

Iran had about 60 million barrels of unsold floating crude oil, stored on tankers as well 50 million barrels of gas condensate in mid-2022, but they had declined to 26 million barrels and 1 million barrels respectively as of late October 2023.

According to Oil Ministry’s official data, obtained by Iran International, the country’s 10 refineries currently consume about 1.75 mb/d of crude oil and 450,000 barrels of gas condensate (2.2 mb/d together).

As the country produces 650,000 barrels of gas condensate daily; It has 200,000 b/d of surplus to export.

If Owji’s claims are true and Iran is producing 3.4 mb/d of crude oil, then it should export its surplus 1.65 mb/d of crude oil as well as 0.2 mb/d of gas condensate.

However, as it was mentioned above, the country exported 1.812 mb/d of oil in October, including about 322,000 barrels of floating crude oil sale.

Therefore, Iran had only 1.5 mb/d of surplus crude oil and gas condensate for export in October.

It means crude oil production was about 3.1 mb/d, in line with OPEC and IEA’s estimates, not 3.4 mb/d, claimed by Owji.

Iran has still 26 million barrels of floating crude oil storage to be sold, according to Kpler.