Iran boosts oil output, foreign firms keen to seal deals

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January 18, 2016 21:43
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DUBAI - Iran ordered a sharp increase in oil output on Monday to take immediate advantage of the lifting of international sanctions, and some foreign firms raced to snap up deals as Tehran emerges from years of international isolation.

Others were more wary, mindful of the risk of falling foul of residual US penalties despite the lifting of nuclear-related sanctions on Saturday by the United States, European Union and United Nations.

Those measures were scrapped as part of a landmark deal between Iran and world powers, rewarding the Islamic Republic for scaling back its atomic energy program in ways that US President Barack Obama said would prevent it from getting its hands on a nuclear bomb.

"We will be committed to the nuclear deal as far as the other side is," Iranian President Hassan Rouhani said on Monday, adding that his country was "morally and religiously committed not to seek weapons of mass destruction."

The agreement restores Iran's access to tens of billions of dollars in frozen assets, reopens the country to foreign investment and allows it to resume selling oil on world markets, albeit at a time when they are drowning in excess supply.

Deputy Oil Minister Rokneddin Javadi said Iran could increase output by 500,000 barrels a day "and the order to increase production was issued today."

The sanctions revoked at the weekend had cut Iran's oil exports by about 2 million barrels per day (bpd) since their pre-sanctions 2011 peak, to little more than 1 million bpd.

Oil prices touched their lowest since 2003 on Monday as the market braced for additional Iranian oil exports.

The lifting of sanctions opens up business opportunities across a host of sectors, from planes to telecoms.

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