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Iran to benefit as oil back in market

Oil&Gas Materials 18 August 2015 14:37 (UTC +04:00)

Tehran, Iran, August 18

By Mehdi Sepahvand - Trend:

Iranian Minister of Economy Ali Tayyebnia said after Iran regains its place in the global oil market, its economy will improve considerably.

"As Iranian oil is introduced into international markets, oil prices will not rise, but instead Iran will only regain its place in the world oil market and new resources will open up," he said in a conference attended by government organizations and the private sector, SHANA news agency reported August 18.

He added that when Iran starts to sell its oil again, changes happening to the global market will be transient and in the end Iran's economy will see a boost.

The World Bank estimates that the eventual addition of one million barrels a day (mb/d) from Iran, assuming no strategic response from other oil exporters, would lower oil prices by 14 percent or $10 per barrel in 2016.

Oil Minister Bijan Zanganeh said on June 3 that Iran's return to global oil market will be gradual once international sanctions against the country are lifted.

"Immediately or one month after the sanctions are lifted, we will pump half a million barrels per day to the market and after six-seven months, we will reach one million barrels [a day] and I don't believe that with the maturity of OPEC it will have a bad effect on the market."

Iran currently exports 1.3 million barrels per day, against 2.2 million bpd before the sanctions were imposed about one decade ago.

Tayyebnia also commented on Iran's oil money which has been blocked abroad and said the sum is less than $30 billion.

"We have $22 billion as collateral for foreign funding in China which will not be usable even if sanctions are lifted," he said.

"Some of our resources was also given to companies such as the National Iranian Oil Company during the previous administration. The sum was spent into projects and was a big sum. It is gone in fact."

The issue of blocked petrodollars, its volume, and spending method has been in the spotlight in local and foreign media. Valiollah Seif, the governor of the Central Bank of Iran, once put the figure at $20 billion and at $29 billion another time. Qolamali Kamyab, the deputy governor of the Central Bank of Iran said the figure was exactly $89 billion.

It's expected that billion dollars of Iran's blocked assets abroad would be release after sanctions on its economy are lifted. The blocks will be freed following the implementation of a comprehensive deal between Iran and the group 5+1 (the US, UK, France, Russia, China, and Germany) reached July 14.

Edited by CN

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