Iran sells first oil cargo to Europe

DUBAI/LONDON: Iran is on track to raise oil production by 500,000 barrels per day after the lifting of sanctions this month and has already sold 6 supertankers with additional crude to buyers in Europe and Asia, a Iranian oil source said.

The source, familiar with export operations, said three supertankers with additional volumes of crude have been sold to buyers in Europe and three to Asian customers for delivery in February.

Trading sources said Litasco, the trading arm of Russia's Lukoil, looked set to become the first buyer in Europe since the lifting of sanctions.

The Swiss trader will deliver one million barrels of Iranian Light grade to Lukoil's Petrotel refinery in Romania, loading at Iran's Kharg Island terminal on February 5.

"Iran raised its crude oil production by at least 500,000 bpd and the market will see it in the next few days," said the Iranian source, who is familiar with export operations. "(There are) three contracts finalised with European customers. Iran is also talking with its traditional customers in Asia, especially India."

Iran has promised to begin regaining market share lost during years of curtailed output after European sanctions on its oil industry were lifted this month.

Tehran has said it would boost output immediately by 500,000 bpd and by another 500,000 bpd within a year, ultimately reaching pre-sanction production levels of 4 million bpd seen in 2010-2011.

The source said that by the end of March or start of April Iran will also introduce a new heavy crude blend, West Karun, to win back more customers.

"We have been in the market for a long time. We think we are ready to be as good as before," the source said.

Iran is expected to add barrels in an already oversupplied market where its rivals Saudi Arabia and Iraq have consistently raised production, helping create one of the biggest gluts in history and contributing to a price plunge to 12-year lows.

But OPEC officials have said the markets have begun to rebalance as investment is being curtailed due to low oil prices.

The market can therefore absorb additional Iranian volumes without suffering much extra pain, OPEC officials have said.