Baku, Azerbaijan, Sept. 10
By Khalid Kazimov -- Trend:
Iran's oil production increased 20,000 barrels per day during the second quarter of this year. According to a report, released by the U.S Energy Information Administration Sept.9, Iran produced 2.82 million barrels per day (mb/d) in the second quarter of 2015 while the figure had stood at 2.8 mb/d during the last two years.
The report doesn't include the gas condensate (a kind of ultra-light crude oil, produced in gas fields) production volumes. Iran produces about a half of million barrels per day of gas condensate, mostly from giant gas field South Pars.
Iran is expected to experience an uptick in economic activity and petroleum consumption in 2016, assuming implementation of the Joint Comprehensive Plan of Action (JCPOA) between Iran and the P5+1 that was announced on July 14.
"In 2016, additional OPEC crude oil supply is expected to come from Iran, which is forecast to boost production if international sanctions targeting its oil sector are suspended," EIA estimated.
On July 14, the P5+1 and Iran announced an agreement that could result in relief from United States and European Union nuclear-related sanctions (which include some oil-related sanctions). Sanctions relief is contingent on verification by the International Atomic Energy Agency that Iran has complied with key nuclear-related steps. The sanctions relief would put additional Iranian oil supplies on a global market that has already seen oil inventories increase significantly over the past year.
The JCPOA is currently undergoing a congressional review. As of the time of this writing, Congress has not voted on the agreement, but for the purposes of this STEO, EIA assumes sanctions relief could occur in mid-2016. If sanctions relief occurs, EIA forecasts Iranian crude oil supplies will increase by about 0.3 million b/d on average in 2016, with most of the growth occurring in the second half of the year.
Much uncertainty remains as to the timing of sanctions relief. Iran produced 3.6 million b/d of crude oil in late 2011, before the recent round of sanctions was enacted. The sanctions forced Iran to shut in a substantial portion of its production, with production currently averaging about 2.8 million b/d.
Iran's ability to bring online previously shut-in volumes and increase exports depends on several factors, including the current condition of oil fields and infrastructure that was shut in and the pace of sanctions relief.
Edited by CN