Iran’s First Vice President Eshagh Jahangiri has described countries attempting to eliminate Iran’s presence on the scene of the global oil trade as being guilty of “treachery,” as the United States looks to pile on new sanctions following President Donald Trump’s announcement in May that the U.S. will exit the nuclear deal.
“They think Saudi Arabia will easily add a few million barrels of oil to the global market. In this struggle, any country wishing to replace Iran in the oil market, will commit great treachery against the Iranian nation and the international community, and they must know that they will pay heavily for this treason” Jahangiri said in a meeting dedicated to National Industry and Mine Day held in Tehran on July 1, according to the Iranian Students News Agency.
“Iran's crude oil will be offered on the domestic stock market, and the private sector can buy and export oil in a transparent manner,” he added, saying that Iran is prepared to do what it can to cause the U.S. to fail in its efforts to reduce Iranian oil exports.
On June 30, Petroleum Minister Bijan Zanganeh said Iran had no major concern about Trump’s threat of new sanctions, after Phase Two of the Persian Gulf Star Refinery became operational recently. Zanganeh said the refinery would make it immune to U.S. sanctions against its purchases of gasoline.
Iranian President Hassan Rouhani inaugurated phase two of the refinery on June 28 in the southern port city of Bandar Abbas. The facility has the production capacity of 12 million liters per day of Euro 4 and Euro 5 premium gasoline.
Iranian officials believe the project could make Iran self-sufficient regarding its gasoline needs, as total production is expected to increase to as high as 36 million liters per day when the third phase is complete, before April 2019, and would enable Iran to export the fuel.
Iran has, for years, struggled to meet its domestic energy needs due to the lack of refining capacity and the international sanctions that cripples it, as well as restricting Iran’s access to supplies of spare parts for plant maintenance.
Oil prices rose on Friday of last week, as worries that new American sanctions against Iran would soon set in and reduce Iran’s contributions to supplies of global crude. In an interview with Fox News two days later, Trump lashed out at OPEC with a warning to stop manipulating oil markets and piled pressure on close U.S. allies with a threat to sanction European companies that do business with Iran.
King Salman of Saudi Arabia promised Trump that he would raise oil production there if needed to make up for Iran’s deficit in the global market, as Saudi Arabia has two million barrels per day of spare capacity. Earlier, on June 22, Saudi Arabia and other members of OPEC, as well as some non-OPEC oil-producing countries like Russia, agreed to boost production by a combined 700,000 to 1 million barrels a day.
Iran exports about 35 percent of its oil to Europe, while the rest is exported to Asian markets. The average price of Iranian oil has risen to more than $66 a barrel since March 2018.
Despite pressure from Washington, Iran exported over 2.28 million barrels of crude oil per day in June. The country exported 2.11 million barrels per day in June 2017, indicating more than 150,000 bpd this year, according to Iran’s Mehr news agency.