Iran’s Oil Boom Continues, Powered by Russian-Chinese Support

Core Insights - Russia is significantly increasing its energy involvement in Iran, particularly in oil and gas fields, following the U.S. withdrawal from the JCPOA in May 2018 [1] - Iran is aiming to restore and potentially exceed its record oil production levels of 4.3 million barrels per day (bpd) achieved in 2024, with support from Russia and China [2] - The focus of Russian development efforts is on smaller Iranian oil fields that can yield quick increases in output, partly as compensation for military equipment provided to Russia [3] Group 1: Russian Involvement in Iranian Energy Sector - Russia has established multiple memoranda of understanding (MoUs) for major oil and gas fields in Iran, including a US$40 billion MoU with Gazprom and the National Iranian Oil Company (NIOC) [1] - Key projects include a US$10 billion development of the Kish and North Pars gas fields and a US$15 billion project to enhance pressure in the South Pars gas field [1] - Russian firms are prioritizing the development of smaller oil fields, such as Changuleh and Cheshmeh-Khosh, to quickly boost production [3][4] Group 2: Iranian Oil Production and Development - Iran's oil production reached approximately 4.3 million bpd in 2024, with an additional 725,000 bpd of other liquids, marking a post-1979 record [2] - Despite recent military tensions, Iran is working to restore production levels, aided by Russian technology and equipment [2] - The Changuleh oilfield, with an estimated 4.8 billion barrels of in-place reserves, is expected to reach a production level of around 60,000 bpd in its first phase [4] Group 3: Strategic Partnerships and Agreements - The 20-year cooperation treaty between Iran and Russia is a significant framework for energy collaboration, facilitating the development of key oil fields [3] - China remains the largest buyer of Iranian oil, benefiting from favorable terms in the Iran-China 25-Year Comprehensive Cooperation Agreement [8] - The agreement allows China preferential access to Iranian oil and gas projects, with pricing structures that favor Chinese interests [8]