Lifting of sanctions from Iran won’t have major impact on oil market

Oil&Gas Materials 26 May 2015 19:40 (UTC +04:00)

Baku, Azerbaijan, May 26
By Elena Kosolapova - Trend:

Lifting of sanctions imposed on Iran won't have a major impact on the global oil market, Alexey Gromov, head of Energy Department, Institute for Energy and Finance of Russia told Trend.

It is highly likely that Iran and P5+1 will reach an agreement on Iran's nuclear program and the sanctions imposed on it will be lifted, according to the expert.

"Judging by the political situation in recent times and the speedy adoption of the necessary decisions by the US lawmakers to prepare a legal ground for the lifting of sanctions against Iran, we can say with confidence that if there is no force majeure by Iranian side, the decision to lift the sanctions imposed on this country will be adopted in late June," Gromov said.

The expert said that fulfillment of this decision won't require much time and all sanctions imposed on Iran will be lifted by the end of summer, if there is no foreign policy aggravation.

Meanwhile, Gromov said that lifting of sanctions from Iran and accordingly, the resumption of the Iranian oil supply to western countries would not lead to fundamental changes in the oil market.

The expert reminded that in accordance with the statistical data, before the imposition of the last package of sanctions on Iran in 2012, the country was supplying by around 1 million barrels more oil to foreign markers per day compared to today.

Therefore, many presume that following the lifting of sanctions, the volume of Iranian oil supply to the foreign markets can increase by 1 million barrels, he said, adding that nevertheless, it is possible that the statistical report doesn't fully reflect the real situation.

"Sufficiently influential experts in this field say that in fact, Iran hasn't reduced its oil export so much, and it carries out part of the exports through shady schemes," he said. "Given that such a situation is quite possible, we can assume that the affect of delivery of more Iranian oil to the world markets in coming years can be not as significant as it was initially presumed."

Moreover, Gromov said that for present, it is not clear weather Iran has sufficient investment opportunities to increase the production at its fields to the previous level, especially with oil prices quite low. All the more so, Iran understands with the delivery of new volumes of Iranian oil to the market, oil prices will likely drop further, he added.

Iran and P5 +1 (the US, France, UK, Russia, China plus Germany) should sign a final nuclear agreement before June 30. The sides reached a framework agreement on this issue in early April.

Edited by CN

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