Azerbaijan, Baku, Feb. 17 /Trend A.Badalova/
The possible suspension of Iranian oil supplies to the European countries will have a short-lived impact on the world oil market, leading analysts of the British economic research and consulting company Capital Economics believe.
In a report on possible effects of Iranian oil embargo, analysts said that there are several reasons to believe that world oil prices will not suffer much from Iranian export halt.
"The embargo was formally agreed last month, but had been in the pipeline for much longer, meaning that countries have already had some time to find alternative sources," analysts said.
Yesterday RBC reported with the reference to Iran's Ambassador to Russia, Mohammad Reza Sajjadi, that a ban on Iranian oil exports to the EU countries has been temporarily postponed.
Earlier, Iranian PRESS TV reported that in response to the latest sanctions imposed by the EU against Iran's energy and banking sectors, the Islamic Republic has cut oil exports to six European countries - Italy, Spain, France, Greece, Portugal and Netherlands. Later this news was refuted.
The reports about halting exports to the EU countries by Iran lead to an increase in the world prices for Brent crude oil to over $120 per barrel, which was the highest level for the last six months.
Capital Economics' analysts believe that in case of Iranian oil ban Saudi Arabia will be able to meet the shortfall. They also stressed that Libyan production was also coming back on stream more quickly than many had anticipated.
Analysts said that the six above mentioned countries targeted by Iran are likely to require less oil this year anyway because of the weakness of their economies. "The impact of the Iranian ban may simply be to ensure that the burden of weaker EU demand is felt by Iran rather than by other oil exporters," analysts said.
Iran will still need some customers for its oil, analysts believe. "US pressure to boycott Iran is having little effect in the much bigger markets in Asia, but China and India in particular are taking advantage of their stronger bargaining positions to insist on lower prices for increased imports of Iranian oil. This will help to offset any upward pressure on global oil prices from EU countries seeking alternative supplies," they said.
Thus analysts believe the higher oil prices rise in the short term, the greater the chances that demand destruction contributes to a steep fall over the rest of the year. They expect Iran tensions to be more than offset by other factors, notably a further escalation of the euro-zone crisis, pulling Brent back down to around $85 by the end of 2012.