Iran has issued an order to increase crude oil production by 500,000 barrels a day, the deputy oil minister was quoted as saying on Monday, implementing its policy to boost production as soon as sanctions were lifted.
Oil prices hit their lowest since 2003 on Monday as the market braced for additional Iranian exports, but later turned positive. Benchmark Brent crude was trading at around $29.25 at 1220 GMT.
"Iran is able to increase its oil production by 500,000 barrels a day after the lifting of sanctions, and the order to increase production was issued today," Deputy Oil Minister Rokneddin Javadi, who also heads the National Iranian Oil Company, was quoted as saying by Iran's Shana news agency.
The United States and European Union on Saturday revoked sanctions that had cut Iran's oil exports by about 2 million barrels per day (bpd) since their pre-sanctions 2011 peak to little more than 1 million bpd.
The following day, Iran said it was ready to increase its exports by half a million barrels per day, pouring more supply into a market glut that has routed global crude prices. Tehran has pledged to boost production further in the coming months.
Nevertheless, analysts say Iran may struggle to rapidly boost its production because its infrastructure, harmed by years of inactivity, needs foreign investment that will take time to arrive.
On Sunday, the head of Italy's Eni SpA said Iran would need to attract $150 billion to become a major producer, and that "is not something that can be done in a second".