Baku, Azerbaijan, Jan. 19
By Aygun Badalova - Trend:
The return of Iran to the world oil market, following the lifting of the sanctions against the country, will not be a game-changer for prices, Jason Tuvey, Middle East Economist at British economic research and consulting company Capital Economics believes.
"Even if Iran delivers on its ambitious plans to raise output from around 2.9 million barrels per day (bpd) at present to 3.5 million bpd later this year this would be less than half the increase in supply from Iraq over the last year, and it could be offset by the cuts building in non-OPEC supply," Tuvey said in a report, obtained by Trend.
The international sanctions imposed on Iran with regard to its nuclear program have been removed as the Joint Comprehensive Plan of Action (JCPOA, aka nuclear deal) entered the implementation phase on Jan. 16.
Iranian officials have repeatedly announced that Tehran will increase its current oil export of one million barrels per day by 500,000 barrels as soon as sanctions are removed.
The figure is planed to increase by another 500,000 to two million barrels per day within a six month period at the next step.
Iran's current oil production is estimated to be around 2.8 million barrels per day (mbpd), of which about one million barrels are exported.
Capital Economics' analysts expect oil prices to rise from less than $30 per barrel at present to $45 per barrel by the end of this year.
Brent price will average $40 a barrel in 2016 and $50 a barrel in 2017, while WTI price will average $38.54 a barrel this and next year respectively, according to the forecasts of the U.S. Energy Information Administration (EIA).
Brent prices averaged $38 a barrel in December, a $6 a barrel decrease from November, and the lowest monthly average price since June 2004, according to the EIA's estimates.
Brent crude oil prices averaged $52 a barrel in 2015, down $47 a barrel from the average in 2014.