Iran may find it difficult to increase oil output by more than 500 thousand barrels per day, Mr Nader Habibi, Professor of the Economics of the Middle East at Brandeis University (US) told Armenian News - NEWS.am. Many international banks are still worried about US sanctions and will be hesitant to deal with Iran, he explained.

Still, lifting of sanctions on January 16 has been comprehensive, leaving no restrictions on sale of Iran's crude oil. So the challenge is rather market sentiment than ability to deliver.

Neither will Iran face any difficulties in servicing its shipments (arranging insurance etc.): the country is using its own ships and insurance arrangements, the expert said.

Today’s price is very low, but as long as Iran is willing to sell at a competitive price it will find buyers, although not beyond some extent.

“Iran currently has the capacity to increase output by 500 000 barrels per day in the short run, but going beyond that will be difficult. If Iran sells this oil to existing clients, financial transactions will be no problem. But selling to new clients might be a little more difficult because many international banks are still worried about US sanctions and will be hesitant to deal with Iran”, Habibi concluded.

After the sanctions imposed by the European Union on the Iranian crude in 2012, Iran’s oil output shrank from 4 million barrels per day (2011) to 2.7 million (October 2015), while exports contracted from 2.2 to 1.1 million barrels per day.