If there's a deal with the U.S., the Islamic Republic could increase production to almost 4 million barrels a day in three to six months, according to Iman Nasseri, managing director for the Middle East at consultant FGE, who has decades of experience covering the region including a period working in Iran.
Others expect a slower pace. It would take 12 to 15 months after the lifting of sanctions to increase production to 3.8 million barrels a day, Reza Padidar, head of the energy commission of the Tehran Chamber of Commerce, said in a telephone interview. Some work required to restore capacity at fields, such as removing and servicing blocked bore-hole pumps, can take as long as one month per well, he said.
Even before ramping up production, Iran could deliver a surge in oil sales. FGE's Nasseri estimates that the country has stockpiled about 60 million barrels of crude. About 11 million barrels of that crude, plus another 10 million barrels of a light oil called condensate, is in "bonded storage" in China, where it's ready to be sold to end users, according to FGE.
NIOC officials say they've maintained contacts with customers, who are willing to resume purchases on regular contracts.
An Iranian restart poses complications for the Organization of Petroleum Exporting Countries and its allies. Led by Saudi Arabia, the 23-nation coalition is gradually restoring the oil output it cut last year when the coronavirus crisis battered demand.
Saudi Energy Minister Prince Abdulaziz bin Salman has signaled that the producer group would make room for Iran to boost output, as it has in the past. It's unclear whether others in the alliance, which includes countries eager to revive output like Russia and the United Arab Emirates, will be so accommodating. But they may not need to be.
With Tehran and Washington still haggling to secure the best terms from the talks, a deal may take much more time. If recent attacks and incidents in the Persian Gulf escalate into open hostilities, it might slip away altogether.
Talks could also be affected by next month's elections, after which Iranian President Hassan Rouhani is stepping down. While Supreme Leader Ayatollah Ali Khamenei has so far endorsed the negotiations, Rouhani's successor may take a harder stance against the U.S.
Even if sanctions are removed, Iran faces other problems. Oil refiners probably signed annual contracts at the start of the year, leaving little room for Tehran to strike its own long-term supply agreements for the time being, Khatibi said.
"Our biggest concern is limitations imposed on our customers and their fear of buying oil from Iran," he said. "As we draw closer to the end of the year, we'll see more term contracts happen."
Trump's sanctions "suffocated" Iran's relationships with traditional customers including India, China, South Korea, Japan and Turkey to a greater extent than previous rounds of trade restrictions, said Padidar of the Tehran Chamber of Commerce.
For many in the market, from Wall Street banks like JPMorgan Chase & Co. to trading houses such as Vitol Group, oil demand is recovering fast enough to comfortably absorb additional Iranian barrels. As the rapid deployment of vaccines helps end lockdowns, pent-up demand for travel stands to propel consumption higher in the second half.
"There is space for oil from Iran to return," said Mike Muller, head of oil trading in Asia for Vitol Group, the world's largest independent trader. "It won't come back in one big bang."