Can Liz Truss be another 'Iron Lady" of Britain?

According to Reuters, New British Prime Minister, Liz Truss faces a financial markets test. If she was planning big energy subsidies only, investors might not worry too much. But she plans tax cuts – and may pick a fight with the Bank of England (BoE) and trigger a trade war with the European Union (EU).

In many ways, Britain faces similar challenges to other European countries i.e. high inflation, rising interest rates, soaring energy prices and an imminent recession. Insofar as it stays in the pack, markets won’t single it out for special attention.

Britain faces extra risks. Inflation is particularly high, Brexit has damaged the economy and the country has a chronic current account deficit meaning it relies on foreign investors to pay its bills. Truss does not want to be part of any pack. She believes that bold supply-side reforms will launch the country onto a new higher-growth trajectory.

While that is not a bad ambition, she hasn’t presented a convincing strategy to deliver it. Rather, she looks like a populist prime minister who relishes confrontation.

According to media reports she is set to declare China a threat and has questioned Britain’s special relationship with the United States. She is also taking a hard line with the EU. She also wants to change the BoE’s mandate, which is to deliver price stability.

Up to now, Britain has been in the middle of the European herd on fiscal policy. Government debt was 100% of GDP at the end of the first quarter, not vastly above the EU’s 88%. Since last September Britain had allocated 1.6% of annual economic output to cushion consumers and businesses from the energy crisis, about the same as Germany and France, according to Bruegel, the Brussels-based think tank.

It’s still unclear what extra help Truss will give to support people with spiralling energy bills this winter. But it will be expensive. Just supporting households could top 50 billion pounds over the next year, or about 2% of GDP.

Helping businesses would require another mega-package. If gas prices stay high now that Russia has suspended some gas deliveries to Europe indefinitely, the government could face similar costs the following winter and beyond.

This bailout may end up being roughly in line with the rest of Europe. Germany announced a 65 billion euro energy package over the weekend.

The difference is that Truss will at the same time cut taxes on employment and reverse a planned rise in corporation tax, costing at least 30 billion pounds a year. And she does not seem to want to cut spending to compensate.

Truss is also dead set against funding her support package via windfall taxes on energy companies. This is a missed opportunity since the sector is set for excess profits of up to 170 billion pounds over the next two years, according to the Finance Ministry calculation.

High inflation might help the government by lowering the debt-to-GDP ratio. But this is not as much of a get-out-of-jail-free card as it is for some other countries, because a quarter of British government debt is linked to rising prices and just over a third has been bought by the BoE.

One area where Britain is already an outlier is that prices are rising faster than in other Group of Seven countries. Inflation jumped to 10.1% in July, and Citigroup analysts recently predicted it could reach 18.6% early next year.

As a result, the BoE will need to jack up interest rates sharply to re-establish price stability. It’s also minded to start selling government bonds later this month. These moves are unlikely to please Truss. Not only will they deepen the recession and hit her core voters; these will make it harder to fund a fiscal bonanza.

This could lead to further confrontation between Truss and the BoE. Although many investors agree that the central bank has been slow to nip inflation in the bud, the priority now is to bring prices under control. Financial markets will not appreciate anything that looks like tampering with the BoE’s independence.

Until recently investors viewed Britain part of the European pack. Both pound and the euro have fallen sharply against the US dollar this year – and government bond yields have been rising across the world. But there are now the first signs of jitters focused specifically on Britain. The yield spread between UK and German 10-year government bonds has widened by 0.3 percentage points in the past month. In the past 10 days, pond has fallen about 2% against the euro.

Turkey-Israel love affair

A Turkish warship has docked in Israel for the first such visit in more than a decade as relations between the allies of United States improve following fierce feuding over the Palestinian cause.

The frigate Kemalreis docked in Haifa on Saturday as part of NATO manoeuvres in the Mediterranean Sea, a Turkish official said. An Israeli official said Ankara had submitted a preliminary request for the crew to disembark on shore leave.

A Haifa port official said it was the first time a Turkish naval vessel had visited since at least 2010, when bilateral ties were shattered by Israel's storming of a pro-Palestinian aid convoy that tried to breach its blockade of the Gaza Strip, ten Turks were killed by Israeli marines in that incident.

For its part, Israel has voiced objections at NATO-member Turkey's hosting of members of Hamas, a Palestinian Islamist movement that is proscribed as a terrorist group in the West.

But the countries have moved to mend their relationship in recent months, with energy emerging as a key area for potential cooperation. They are expected to appoint new ambassadors soon.

It may be recalled that the Israeli charge d'affaires in Turkey had talked the re-appointment of an ambassador to Ankara, while repeating Israel's expectation that the Hamas office in Istanbul should be closed down.

In a roundtable meeting with journalists, Israel's current top representative in Ankara Irit Lillian said the process of re-appointing an ambassador to Turkey was only a matter of "when and not if."

"It's only because of elections in Israel that things might be delayed on the Israeli side but I hope it will be on time and it will be just a few more weeks and the process will be over," Lillian said, Israel will hold a general election on November 01, 2022.

Earlier, Turkey and Israel had agreed to re-appoint respective ambassadors more than four years after they were called back, marking another milestone after months of improved relations.

The two regional powers had expelled ambassadors in 2018 over the killing of 60 Palestinians by Israeli forces during protests on the Gaza border against the opening of the US Embassy in Jerusalem.

But they have been working to mend long-strained ties with energy emerging as a key area for potential cooperation.

Lillian reiterated the challenges to the ties, saying that the biggest obstacle to the "positive tendency seen throughout the year" was the existence of a Hamas office in Istanbul.

"There are plenty of challenges, but from our point of view, one of the main obstacles is the Hamas office in Istanbul," she said.

"Hamas is a terrorist organization, and it is no secret that Israel expects Turkey to close this office and send the activists there away from here," Lillian added.

A visit to Turkey by Israeli President Isaac Herzog in March, followed by visits by both foreign ministers, helped warm relations after more than a decade of tensions.

Turkish President Tayyip Erdogan and Israeli Prime Minister Yair Lapid held a phone call recently, expressing their satisfaction with the progress in ties and congratulated each other on the decision to appoint ambassadors.

Erdogan said necessary steps to appoint the ambassador would be taken as soon as possible, while Lapid said the strengthening ties would lead to achievements in commerce and tourism.

 

Pakistan Air Force Chief meets top Iranian military officials

Pakistan’s Air Chief Marshal Zaheer Ahmad Babar, who serves as the Chief of Air Staff, visited Iran lately and met with several high-ranking Iranian officials, including Iranian Defense Minister Brigadier General Mohammad Reza Ashtiani.

In this meeting, the Iranian Defense Minister expressed his deepest sympathies with the nation of Pakistan and offered condolences to the families of the recent flood victims. 

Unprecedented monsoon rains that began in mid-June have affected more than 30 million people in Pakistan, killing more than 1,130 people.

Ashtiani said, “The Islamic Republic of Iran and Pakistan have historical, cultural and social commonalities regardless of the common border.”

The Defense Chief stated that the two countries have an important and influential position in regional developments and the Islamic world, adding that Pakistan has always enjoyed a particular position in the foreign policy of Iran.

Ashtiani also stated that Tehran considers the security of Pakistan as its own security, adding, “The government of Iran emphasizes developing relations with the friendly and brotherly country of Pakistan at all bilateral, regional and international levels.

He pointed out that the cooperation between Iran and Pakistan, in the changing and tense conditions of the region, can be of help in improving the security situation in the West Asian region.

The Defense Minister also made it clear that both countries should not allow third countries to be influential in the development and deepening of bilateral cooperation.

Stating that the international situation and developments are currently in a complicated state, the Defense Minister noted, “The US and the West are trying to implement their unilateralist and totalitarian approaches in all strategic areas of the world. The recent developments in Ukraine are also the product of a unilateralist and interventionist approach,” he added. 

Ashtiani further noted that the Americans in Afghanistan left the country in a chaotic situation after 20 years of occupation, adding, “Certainly, Afghanistan's solution to get out of the current situation is to form an inclusive government with the participation of all ethnic groups.”

Stating that good measures have been taken in recent years to transform the borders of the two countries safer and compatible with economic exchanges, Ashtiani said. “We support and emphasize the development of defense, military and security cooperation and the implementation of agreements in these areas” He added.

For his part, Marshal Ahmad Babar confirmed the Iranian Defense Minister's remarks in the meeting, calling the situation in the region complicated and praised the resistance of the Iranian nation against the sanctions.

Referring to the progress of Iran's aviation industry, the Pakistani Chief of Air Staff called for the expansion of the level of cooperation in operational issues, appreciating Iran's cooperation in establishing the security of the borders of the two countries.

He expressed his desire for the exchange of delegations, the creation of design offices and joint laboratories regarding aviation, industrial and university cooperation and the creation of joint technology parks.

At the end of this meeting, the Iranian defense minister invited his Pakistani counterpart to visit Tehran.

Marshal Ahmad Babar also met the Chief of the General Staff of the Armed Forces, Major General Mohammad Bagheri, while visiting the headquarters of the General Staff of the Armed Forces.

At the beginning of this meeting, Bagheri welcomed the Pakistani chief of air staff, stating, “Pakistan is a very good neighbor for Iran and enjoys a special position in the eyes of Iran's military and government officials.”

Bagheri also expressed his sadness about the flood in Pakistan and expressed hope that Islamabad can overcome this natural disaster as soon as possible and the problems of the people of Pakistan will be solved. 

Underlining that the relations between the two countries have always been developing, Bagheri clarified, “The military commanders of both sides have played a special role in the development of relations and I would like to send my greetings to General Qamar Javed Bajwa.”

Elsewhere in the meeting, the Chief of General Staff of the Armed Forces stated, “We consider the security of Pakistan as our security and we will not hesitate to do anything we can for the security of Pakistan.”

Regarding military cooperation between the two countries, there are already established relations, Bagheri stated, adding that it can definitely expand in terms of diversity and depth, and Iran is fully prepared for this issue.

“Considering the mutual trips of the two air force commanders of Iran and Pakistan, we will see the deepening of relations in the near future, and I believe that the air forces of the two countries can have the necessary cooperation in order to transfer experiences and new technologies,” Bagheri stated.

He added that it is expected that Iran and Pakistan will have a joint program for manned and unmanned drones in the next one to two years.

Regarding the issue of sanctions against Iran, the Iranian top military chief stated, “UN arms embargoes have been lifted for about a year and a half and we are not facing any restrictions in this regard.

Now we only face unilateral and oppressive US sanctions, so there are no restrictions on our military cooperation with Pakistan.”

Bagheri stated that in the field of manned and unmanned drones, many measures have been taken by Iran. 

“You may not have had the opportunity to visit and observe all of them, so with the presence of your engineering team, you can get more reviews about Iran's capabilities,” Bagheri told Marshal Ahmad Babar.

The Chief of Staff of the Armed Forces said that the turning point is that Pakistan has the necessary will to expand cooperation, and it is definitely evident that Tehran also mutually have the will to cooperate with Pakistan. 

“In general, I believe that foreigners should not be allowed to enter by expanding the cooperation and concluding various understandings,” he stated.

For his part, Marshal Ahmad Babar said, “We have always wanted to meet the Iranian military men. I will also send you the greetings of General Bajwa. This is the first time I come to Iran and I also had a good conversation with the commander of the Iranian Air Force.

The Chief of the Pakistani Air Staff stated that he will send a team of experts to Iran for better implementation of joint programs, adding, “Geopolitically, our region is very sensitive and important and we are struggling with many problems from the east and the west.

Marshal Ahmad Babar continued by saying that in his belief, the military relations of the two countries can definitely have a positive effect on the relations between the governments and diplomats, and the nations of Iran and Pakistan are very close to each other due to their religious and cultural commonalities.

The Pakistani Air Staff Chief also stated that the battle scene has changed a lot, noting, “We have to use the term hybrid war for many of today's battles and as you said, we have to move towards the cutting edge technologies and for this purpose, we in Pakistan have established a science and technology park.”

Marshal Ahmad Babar noted that according to Islamabad's experiences in the exercise field, Tehran and Islamabad can hold a joint exercise.

 

Who will be the next Prime Minister of Britain?

Members of Britain’s Conservative party will choose their next leader to succeed the ousted Boris Johnson as the next Prime Minister. Let us have a look at the two frontrunners.

The frontrunner in the leadership contest is current Foreign Secretary Liz Truss, 47, the daughter of a Labour-supporting maths professor and teacher who went to a state school but made it to Oxford where she took the course studied by many future prime ministers: philosophy, politics and economics (PPE). After a brief career as an accountant she became an MP in 2010 and rose steadily through the Tory ranks despite her past membership of the centrist Lib Dems. She campaigned in favour of remain in the fateful 2016 EU referendum campaign. But she made up for this by quickly becoming a hardline Brexiter and leveraging her loyalty to one Tory election hero – Boris Johnson – and by often being compared to another, Margaret Thatcher.

Rishi Sunak, 42, is the son of east African parents of Punjabi descent who moved to Britain in the 1960s. Their work as a GP and pharmacist enabled them to send their boy to one of Britain’s most expensive private schools, Winchester. He also went to Oxford and also studied PPE, before making millions in hedge funds and becoming a Tory MP in 2015. A Brexit supporter, he was soon picked out as a future leader and became Chancellor of the Exchequer soon after Johnson won his big election victory in February 2020. Also like Truss, he is married with two daughters.

A year ago, Sunak had the world at his feet, basking in the success of the Treasury’s Covid furlough scheme. But his reputation has waned – not helped by revelations about his billionaire wife’s tax status – and he went into the leadership fight being blamed for everything from the cost of living crisis to knifing Johnson in the back.

Truss, on the other hand, started from the back of the pack but the invasion of Ukraine gave her the platform to do her best Iron Lady impersonation with tough anti-Putin rhetoric. This delighted the Tory press and the older, middle-class men who largely make up the party members who are choosing the new PM. Once she made it into the final two to take on Sunak, she has never looked like losing.

The cost of living crisis, what the government should do about it and how that should be paid for has dominated. Truss launched her campaign with promises of big tax cuts and suggested her government could increase borrowing to pay for them.

Her plan to tell people what they want to hear – see this week’s ruling out of energy rationing – has left Sunak with no other choice than to stick to his orthodox stance that the country can’t afford tax cuts given the pandemic and the war in Ukraine. He hasn’t been able to make his accusations of fantasy economics stick, nor has he benefited from reminding everyone that his rival was a remainer. Truss has made the Ukraine issue her own, and has also profited from the press narrative that Johnson was shafted by the “Westminster elites”, for whom read “Sunak”.

As you might expect in British politics, class has played a big part and was unexpectedly overt when clips emerged of a young Sunak on a TV documentary joking about how he didn’t have any working-class friends. This played out while the professor’s daughter criticized her (actually very good) state school for failing working-class kids. Truss’s much less polished style has been marked but she has avoided any eccentric moments on a par with her infamous “blessed are the cheese makers” speech at party conference in 2014. Her potentially damaging failure to describe France as an ally was straight from the Johnson playbook and she also escaped too much damage from a leaked tape of her calling British workers lazy.

The longest leadership race in living memory will end when the winner is announced on Monday lunchtime British time, although despite the buildup it’s not much of a cliffhanger. Truss has had a huge lead in the polls throughout the contest, with the most recent roundup of surveys giving her 59% of the vote to Sunak’s 32%.

Victory will make her the third woman to lead Britain after Thatcher and Theresa May, all Conservatives. If Truss wins as expected, she – and Johnson – will then have to travel 500 miles to Balmoral on Tuesday for the traditional audience with the Queen who is unable to leave her Scottish redoubt because of an episodic mobility issue.

Grand Ayatollah: A symbol of peace in Iraq

As Iraq was at the brink of civil war lately only one man stopped it, a 92-year-old Iraqi Shi'ite cleric who proved once again he is the most powerful man in his country.

Grand Ayatollah Ali Al-Sistani said nothing in public about the unrest that erupted on Iraq's streets, but government officials and Shi'ite insiders say it was only Sistani who halted a meltdown.

According to the western media, the story of Iraq's bloodiest week in nearly three years shows the limits of traditional politics in a country where the power to start and stop wars rests with clerics.

The Iraqis who took to the streets blamed Tehran for whipping up the violence, which began after a cleric based in Iran denounced Iraq's most popular politician, Moqtada al-Sadr, and instructed his own followers - including Sadr himself - to seek guidance from Iran's Supreme Leader.

Sadr's followers tried to storm government buildings. By nightfall they were driving through Baghdad in pickup trucks brandishing machineguns and bazookas.

Armed men believed to be members of pro-Iranian militia opened fire on Sadrist demonstrators who threw stones. At least 30 people were killed.

And then, within 24 hours, it was over as suddenly as it started. Sadr returned to the airwaves and called for calm. His armed supporters and unarmed followers began leaving the streets, the army lifted an overnight curfew and a fragile calm descended upon the capital.

To understand how the unrest broke out and how it was quelled, Reuters spoke with nearly 20 officials from the Iraqi government, Sadr's movement and rival Shi'ite factions seen as pro-Iranian.

Those interviews all pointed to a decisive intervention behind the scenes by Sistani, who has never held formal political office in Iraq but presides as the most influential scholar in its Shi'ite religious centre, Najaf.

According to the officials, Sistani's office ensured Sadr understood that unless Sadr called off the violence by his followers, Sistani would denounce the unrest.

"Sistani sent a message to Sadr, that if he will not stop the violence then Sistani would be forced to release a statement calling for a stopping of fighting – this would have made Sadr look weak, and as if he'd caused bloodshed in Iraq," said an Iraqi government official.

Three Shi'ite figures based in Najaf and close to Sistani would not confirm that Sistani's office sent an explicit message to Sadr. But they said it would have been clear to Sadr that Sistani would soon speak out unless Sadr called off the unrest.

An Iran-aligned official in the region said that if it were not for Sistani's office, Moqtada al-Sadr would not have held his press conference that halted the fighting.

Sistani's intervention may have averted wider bloodshed for now. But it does not solve the problem of maintaining calm in a country where so much power resides outside the political system in the Shi'ite clergy, including among clerics with intimate ties to Iran.

Sistani, who has intervened decisively at crucial moments in Iraq's history since the US invasion that toppled Saddam Hussein, has no obvious successor. Despite his age, little is known publicly about the state of his health.

Meanwhile, many of the most influential Shi'ite figures - including Sadr himself at various points in his career - have studied, lived and worked in Iran, a theocracy which makes no attempt to separate clerical influence from state power.

Last week's violence began after Ayatollah Kadhim al-Haeri, a top ranking Iraqi-born Shi'ite cleric who has lived in Iran for decades, announced he was retiring from public life and shutting down his office due to advanced age. Such a move is practically unknown in the 1,300-year history of Shi'ite Islam, where top clerics are typically revered until death.

Haeri had been anointed as Sadr's movement's spiritual advisor by Sadr's father, himself a revered cleric who was assassinated by Saddam's regime in 1999. In announcing his own resignation, Haeri denounced Sadr for causing rifts among Shi'ites, and called on his own followers to seek future guidance on religious matters from Ayatollah Ali Khamenei - the cleric who also happens to rule the Iranian state.

Sadr made clear in public that he blamed outsiders - implicitly Tehran - for Haeri's intervention, "I don't believe he did this of his own volition," Sadr tweeted.

A senior Baghdad-based member of Sadr's movement said Sadr was furious. "Haeri was Sadr's spiritual guide. Sadr saw it as a betrayal that aimed to rob him of his religious legitimacy as a Shi'ite leader, at a time when he's fighting Iran-backed groups for power."

Sadrist officials in Najaf said the move meant Sadr would have to choose between obeying his spiritual guide Haeri and following Khamenei, or rejecting him and potentially upsetting older figures in his movement who were close to Sadr's father.

Instead, Sadr announced his own withdrawal from politics altogether, a move that spurred his followers onto the street.

Specialists in Shi'ite Islam say Haeri's move to shut his own office and direct his followers to back the Iranian leader would certainly have appeared suspicious in an Iraqi context, where suggestions of Iranian meddling are explosive.

"There's strong reason to believe this was influenced by Iranian pressure - but let's not forget that Haeri has also had disagreements with Sadr in the past," said Marsin Alshammary, a research fellow at the Harvard Kennedy School.

"He directs followers to Khamenei when there's no (religious) need to do so. And it seems unlikely a person in his position would shut down his offices which are probably quite lucrative," she said.

As gun battles raged in central Baghdad, Sadr stayed silent for nearly 24 hours.

During that time, Shi'ite religious figures across Iraq tried to convince Sadr to stop the violence. They were joined by Shi'ite figures in Iran and Lebanon, according to officials in those countries, who said pressure on Sadr was channeled through Sistani's office in Najaf.

"The Iranians are not intervening directly. They're stung by the backlash against their influence in Iraq and are trying to influence events from a distance," an Iraqi government official said.

Sadr insists on new elections, while some Iran-backed groups want to press ahead to form a government. Clashes broke out late in the week in oil-rich southern Iraq.

The government has been largely silent. Prime Minister Mustafa al-Kadhimi said on Tuesday he would step down if violence continued, in a statement made hours after fighting had already stopped.

"Where is the prime minister, the commander-in-chief, in all of this?" said Renad Mansour of the London-based Chatham House think tank. More violence was possible, Mansour said.

"Sadr's main focus is to become the main Shi'ite actor in Iraq, and so he wants to go after his Shi'ite opponents. In Iraq, violence is one of the tools used to compete."

India attains status of fifth largest economy

India has overtaken the Britain in becoming the world's fifth largest economy, according to a report by Bloomberg. India pushed Britain to the sixth spot in the last three months of 2021, as the latter grapples with a shrinking economy and a change of leadership following Boris Johnson's resignation.

The calculations are in terms of US dollars and according to the GDP figures from the International Monetary Fund (IMF), India extended its lead in the first quarter.

Finance Minister Nirmala Sitharaman took to Twitter to say, "The IMF’s own forecasts show India overtaking Britain in $ terms on an annual basis this year, putting the Asian powerhouse behind just the US, China, Japan and Germany. A decade ago, India ranked 11th among the largest economies, while the UK was 5th."

Addressing the media, Bharatiya Janata Party (BJP) spokesperson Sambit Patra said that India is now ahead of the ones who ruled us.

"India has taken over Britain and become the fifth largest economy in the world. Once who ruled us are now behind us in the economy. However, Congress is unable to shed its colonial mindset," he said.

Union Health Minister Dr Mansukh Mandaviya took to Twitter to say that India is writing new pages of success.

"With the mantra of reform, perform and transform, New India is writing new pages of success and marching rapidly towards becoming an economic superpower," he said.

Business Tycoon Anand Mahindra also took to Twitter to laud the development.

"The law of Karma works. News that would have filled the hearts of every Indian that fought hard and sacrificed much for freedom. And a silent but strong reply to those who thought India would descend into chaos. A time for silent reflection, gratitude," he said.

Indian economy is estimated to grow more than 7% this year, as Indian stocks have seen a massive rise to the second position in the MSCI Emerging Markets Index this quarter, falling behind China at the first position.

Considering the dollar exchange rate on the last day of the relevant quarter, Indian economy in the quarter through March stood at US$854.7 billion while UK stood at US$816 billion. These calculations were made using historic exchange rates on the Bloomberg terminal and the IMF database.

Britain’s GDP grew by paltry 1% in cash terms in the second quarter and shrank 0.1% after adjusting for inflation.

Britain is currently facing the fastest inflation in 40 years along with rising risks of a recession that may last till 2024, says the Bank of England.

In this bleak economic backdrop, Britain is set to elect a new prime minister on Monday, September 05, 2022. Conservative party members will be choosing Boris Johnson's successor with Foreign Secretary Liz Truss expected to beat former Chancellor of the Exchequer Rishi Sunak in the polls.

 

Iran ready to release millions of barrels of oil

Iran has considerable volumes of oil in floating storage that it could quickly release should a deal with the United States be finalized.

In an update earlier this month, OilX claimed that Iran has some 40 million barrels, the bulk of which is probably condensate.

Vortexa estimates Iranian crude in floating storage at 60 million to 70 million barrels, while Kpler has estimated these at 93 million barrels, Bloomberg reported lately.

The volumes would not be released immediately, however, as issues such as insurance and shipping would need to be dealt with first.

“Iran has built up a sizable flotilla of cargoes that could hit the market fairly soon,” John Driscoll from JTD Energy Services told Bloomberg.

Currently, Iran and the United States are both considering the final version of an agreement proposed by the European Union, which is acting as an intermediary in the negotiations.

According to recent reports, some of the problems have been straightened out but others still remain and need to get resolved before a deal is finalized.

Israel’s Haaretz reported that it had seen a copy of the draft proposal, which involves the release of prisoners from Iran and, in exchange, the release of Iranian funds from international bank accounts.

Iran will be free to keep the uranium it had enriched so far but banned from violating the nuclear deal, the Israeli daily wrote.

A nuclear deal would mean the return of Iranian crude to international markets, at a rate of some 1.3 million bpd, according to a recent Financial Times report. This would substantially lower oil prices, at least for a while.

Iran is eager to boost its exports of crude but it has signaled it would not rush into a deal until its last remaining demands are made. Chief among them is a guarantee that the deal would survive during future US administrations.

One may recall, Managing Director of National Iranian Oil Company (NIOC) has said the country’s oil production capacity is going to increase by 200,000 barrels per day (bpd) to 4.038 million by the end of the current Iranian calendar year (March 20, 2023). The official put the Islamic Republic’s current oil production capacity at 3.838 million bpd.

“With the measures taken, Iran's oil production capacity will increase to 4.038 million barrels per day by the end of this year,” Mohsen Khojasteh-Mehr had told IRNA.

Pointing to the increase in the country’s oil exports over the past 12 months since the 13th government has taken office, the Deputy Oil Minister said: “Considering the increase in oil production capacity, it is possible to increase our exports if demand in global markets increases.”

Khojasteh-Mehr noted that the above-mentioned figure is the country’s optimal capacity and whenever the international conditions are more open, Iran will be ready to significantly increase exports and return to the world markets with maximum power.

In early April, Oil Minister Javad Oji had said that the country’s crude oil production has reached the pre-sanction level.

Saying that the current capacity of Iran’s oil production has reached more than 3.8 million bpd, the minister said, “We hope that through the efforts of all those active in this sector, we will reach higher figures in the exports of crude oil, gas condensate, oil products, and petrochemicals in the current Iranian calendar year.

“By taking effective measures in onshore and offshore oil fields, drilling new wells, repairing wells, rebuilding and modernizing facilities, and oil collection centers, the current oil production capacity has reached before the sanctions, and we have no problem in performance and this amount of production”, Oji added.