Oil-producing countries’ gains in connection with situation in Iran to be rapidly nullified
Azerbaijan, Baku, Trend S. Aliyev, E. Tariverdiyeva /
The escalation of tensions and the outbreak of a war against Iran will lead to unpredictable consequences. The West's decision would be madness, Chairman of the Baku Nobel Heritage Fund Togrul Baguirov said.
"The momentary gains of oil-producing countries from the increase in oil price in relation to the situation in Iran will be rapidly nullified," president of the Moscow International Petroleum Club and the UN expert on energy issues Baguirov said in an interview with Trend. "It is, in principle, bad for such countries like Russia and Azerbaijan, which are trying to get away from oil dependence and to balance the budget, by actively developing non-oil sector."
He said that geopolitical, Iranian component in today's oil price is really obvious, i.e. approximately 30 percent of the actual price, taking into account demand and supply ($90-100 per barrel).
The fact that Iran has already announced about the cessation of oil supplies to Great Britain and France is a symbolic action, the expert said. Iranian oil supplies to these countries were always small, Baguirov said.
Iran, in respect of which the U.S and the European Union imposed the sanctions to reduce the sources of financing the country's nuclear program, stopped oil exports to British and French companies. In January EU foreign ministers imposed an embargo on oil imports from Iran, which was to begin to act from July 1.
Baguirov said that Iran will probably manage to find a replacement for oil supplies to Europe (approximately $800,000 barrels per day) and Iran's main trade partners will be India and China.
"By the way, oil is enough in the world," the expert said. "The oil production technologies from shale, oil production from the so-called salt deposits appeared."
He said that the competition in the global market will inevitably increase, especially for the next 2-3 years, until the global economic crisis and the associated reduction in energy consumption in the most industrialized countries come to the end.