Tehran's oil exports have been limited since former US President Donald Trump in 2018 exited a 2015 nuclear accord and reimposed sanctions aimed at curbing oil exports and the associated revenue to Iran's government.
Exports have risen during the term of his successor President Joe Biden. Iranian and Western officials have said the US is holding talks with Iran to sketch out steps that could limit the nuclear program.
Iranian crude exports exceeded 1.5 million barrels per day (bpd) in May 2023, the highest monthly rate since 2018, according to Kpler, a provider of flows data. These were around 2.5 million bpd in 2018, before the US withdrawal from the nuclear deal.
Iran said in May it has boosted its crude output to above 3 million bpd. That's about 3% of global supply and would be the highest since 2018, according to figures from the Organization of the Petroleum Exporting Countries (OPEC).
A source familiar with the matter told Reuters earlier this month output was still at this level.
The International Energy Agency this week put Iran's May production at 2.87 million bpd, close to Iran's official figure.
The rise from Iran comes as OPEC Plus, which includes OPEC, Russia and other allies, is cutting output to support the oil market, where expectations that economic weakness will dent demand have pressured prices.
Other analysts say Iran's production and exports have risen. SVB International, a consultant, estimates crude production hit 3.04 million bpd in May, up from 2.66 million bpd in January. Exports of crude and condensate were 1.93 million bpd in May.
"Sanctions are in place but perhaps not fully implemented or monitored," said Sara Vakhshouri of SVB, who has previously said during Biden's term there hasn't been any serious crackdown or action against Iran's oil exports.
"Also all of these supply volumes are in the dark market, where there is no transparency and so these are not reflected in formal global supply and export data."
On the issue of whether the US is strictly enforcing the sanctions, the US State Department and Treasury did not immediately respond to requests for comment.
China is Iran's biggest customer while volumes also head to Syria and Venezuela, according to analysts and shipping data.
OPEC+ Plus agreed on June 4 a wide-ranging deal to limit oil supply into 2024. Iran is not required to make cuts as, together with Venezuela and Libya, it has an exemption. Nigeria is not exempt but has faced internal challenges in raising output.
Analysts at JP Morgan in a report this week said OPEC+ Plus needed to cut more. They lowered their Brent oil-price forecast for 2023 to US$81 a barrel from US$90, saying rising supply was offsetting demand growth.
"Within the broader OPEC Plus alliance, supply has been also rising outside the core members," the analysts at JP Morgan said, and revised up their production expectations for Venezuela, Nigeria and Iran by almost 600,000 bpd from November last year.
"Invariably, to make room for this supply growth, OPEC Plus needs to cut more, were the alliance to adhere to the market management strategy."
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