FXStreet (Mumbai) - The IAEA on Saturday confirmed Iran has adhered to its commitment and has curtailed its nuclear programme. Following the confirmation by the UN nuclear watchdog, the US lifted the sanctions imposed on Iran. Iran has the fourth largest proven oil reserves in the world and it is also one of the biggest exporters of crude. The sanctions had slashed Iran’s export by 2 million barrels per day (bpd), reducing to around 1 million bpd. With sanctions removed Iran’s oil exports will climb again to its pre sanction highs choking a market already hit by glut concerns. Iran said yesterday that it is ready to increase its exports by 500,000 bpd. The rise of US shale producers and OPEC’s stubborn policy to keep pumping record volumes in order to defend market share has caused prices to plunge to record lows. With the sanctions removed, Iran will begin pumping and exporting to its full capacity, which will go to add to the existent 1 million barrels a day of over supply which has caused oil prices to drop more than 70 since the middle of 2014. Global crude production is estimated to have already exceeded by between half a million and 2 million barrels per day. The removal of sanctions come at a time when oil prices are already suppressed, hovering around less than $30 per barrel threshold. Oil prices have already fallen by over 75 per cent since mid-2014 and by over a quarter since the start of 2016. It was only obvious that news will cause oil to take a further beating. The fear of further rise in supply caused oil prices to hit their lowest since 2003. Brent crude dropped 4.3 per cent in Asian trading to $27.70 a barrel, the lowest since November 2003. It has declined 77.4 per cent since touching a record high $126.65 a barrel 2011 April. The WTI was down 1.5 per cent in Asia at $28.99. Some traders however sounded a little more optimistic. They said they believed Iran's ambitions to export 500,000 bpd were not very realistic. Iran, analysts opined will take time to rebuild its export infrastructure which has been hurt by lack of adequate investment. “Currently, we are studying problems faced by domestic banks to this end. Once they are resolved, production and overseas sales of crude will increase,” Rokneddin Javadi, chief of the state-owned National Iranian Oil Co., told the Shana news agency. Oil markets however cannot discount the fact that Iran has in place super-tankers filled with oil which it can sell immediately. Thus, oil prices are bound to see further drop in the coming days. Also, there is very little possibility that OPEC might agree to a production cut. The growing conflict between Saudi Arabia and Iran will make the two producers even more adamant than before in sticking to its agenda to pump surplus. Tariq Zahir, at New York's Tyche Capital Advisors, told Reuters "We feel the Saudis will pump even more and a price war between them and the Iranians will drive us well into the $20 levels.” Rebalancing of the oil market is absolutely out of question for now. For more information, read our latest forex news.