Russia stands ready to hike its oil output after the implementation of U.S. sanctions on Iran, the country’s energy minister told CNBC on Sunday.
Donald Trump’s administration is set to impose fresh sanctions on Iran targeting the country’s crude industry on November 4. The U.S. is reimposing sanctions on the Middle Eastern nation as part of its withdrawal from the 2015 Iran nuclear deal.
“I don’t think we can discuss the exact number at this point but what I can tell you for sure is that we have significant potential to increase our production,” Russian Energy Minister Alexander Novak told CNBC’s Steve Sedgwick at the Joint Ministerial Monitoring Committee (JMMC) in Algiers on Sunday.
“So we can restore production to October 2016 levels and we cannot go above that but we would be looking at the overall supply-demand balance before we take any decisions.”
Earlier in the month, Novak criticized U.S. sanctions on Iran as “unproductive” and “wrong,” and said there “will be consequences.”
Companies that rely on access to Iran’s oil market have been steadily cutting off their buying of Iranian crude as the State Department has warned firms to cease purchases by early November.
Europe has been calling for concessions to exempt certain industries from the wide-ranging levies. But U.S. Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin have rejected these pleas, saying the sanctions are aimed at maximizing economic pressure on Iran.
The Organization of Petroleum Exporting Countries, commonly abbreviated to OPEC, has come under increasing pressure amid comments by Trump and impending sanctions on Iran. A steep decline in production from Venezuela, whose economy has been crippled by hyperinflation, has also added to pressure on the cartel to boost production.
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