Rising Iran oil export to push Saudi output down

Rising Iran oil export to push Saudi output down

Baku, Azerbaijan, June 17

By Umid Niayesh - Trend:

A former top Iranian oil official believes that resuming Iran's oil export to pre-sanctions level would make Saudi Arabia to have to decrease crude output.

Fereydoun Barkeshli, the former general manager of National Iranian Oil Company (NIOC) in OPEC and International Affairs told Trend on June 17 that "there is no doubt that Saudi Arabia will have to cut back production".

Before the western sanctions on Iran in mid-2012, the country was exporting 2.5 million barrel per day (mb/d) of oil, but the figure has fallen to 1.2 mb/d in 2014 and 1.4 mb/d in May 2015.

Iran and P5+1(the US, UK, France, Russia, China and Germany) are negotiating to reach a comprehensive nuclear deal by June 30 to pave the ways for elimination of sanctions imposed on Iran.

Iran's Oil Minister Bijan Namdar Zanganeh has already said that the country can pump more, 0.5 mb/d of oil to markets a month after lifting the sanctions and this volume can reach 1 mb/d in six months.

Barkeshli, who is currently a private energy consultant and president of Vienna Energy Research Group said "as such Saudi Arabia will be required to reduce crude production to open space for Iran."

Reuters published a report on June 15, quoting several sources as saying that Iran has stored 38 million to 45 million barrels of oil at sea to be exported as soon as the sanctions on Iran are eliminated.

"In fact most oil producing countries keep some stocks often floating when there glut in the market," Barkeshli said. "This is an incentive for the buyers who find themselves better situated to have their requirements."

"This is the case with Saudi Arabia and other major producers," he said. "Back in 1980's when prices fell bellow $10 per barrel, Iran and several other oil producers hired floating and non-floating storage in the Sidi Kerir port in order to enhance their advantage of reaching the market quickly. However, I am not sure about 40 million barrels of floating crude. It is more than the volume that countries keep as a marketing strategy. In case of Iran it could be some unsold cargoes though I am not sure".

Iranian former official added that "having said that even 40 Million barrels is not such a big volume that affect prices." "As for Iran's return to the international market, there is no doubt that Saudi Arabia will have to cut back production," he said. "When Iran had to cut down crude oil production due to international oil embargo, Saudi Arabia raised production and filled the gap by over 90 per cent of Iran's cut back".

Saudi Arabia has traditionally played the role of swing producer in OPEC though it officially declined to be called a swing producer back in 1986, it continued to play that role frequently, the Iranian expert believes.

Barkeshli says that in fact Saudi might be willing to cooperate so that to provide some breathing space for its own oil fields which are already under pressure due to excessive production.

"On the other hand lower oil prices have already let to lower crude production in some conventional as well as shale oil and other non-conventional crude oil which provide room for return gradual return of Iran to the world market," he said. "Nevertheless, Iran has ambitious capacity build programs that will boost production close to pre-revolution levels".

Saudi Arabia produced 10.107 mb/d in May, 421 km/d more than 2014 average, according to the latest monthly report, released by OPEC.

Iran's oil output also reached 2.845 mb/d, 79 km/d more than 2014's production in average.

Austria, Georgia eye to implement projects in animal husbandry
Austria, Georgia eye to implement projects in animal husbandry
Immunization with Sinovac in Georgia likely to begin in May
Immunization with Sinovac in Georgia likely to begin in May
Next meeting on electoral reform to be held on May 14-16
Next meeting on electoral reform to be held on May 14-16
Loading Bars
Oil climbs on solid demand outlook as market awaits fresh cues
Minister discloses Kazakhstan's GDP growth rate from January through April 2021
Trade turnover increased in Turkmenistan
Iranian Foreign Minister's begins visit to Middle East, Europe
Number of countries purchase products from Turkmenistan on exchange
Latest prices for Azerbaijani oil disclosed
EIB to invest in solar plant construction in Uzbekistan
Israeli energy pipeline hit in Gaza rocket attack
Turkmenistan exceeds plan for energy production
Wind market to be 30% weaker in 2021 y-o-y
California governor announces $12 billion homeless plan
Azerbaijani First VP Mehriban Aliyeva shares videos from another trip with President Aliyev to Karabakh region on Instagram (VIDEO)
Kazakh-Turkish JV launches tender to buy petrol
Iranian currency rates for May 12
Azerbaijan issues data on compulsory non-life insurance for March 2021
Japan, UNDP join efforts to boost oxygen supply in India's north-eastern region
Snam sees almost 6% increase in total revenues
India to get first round supplies from Hindu Temple of Abu Dhabi
Snam increases technical investment by 5%
Snam reveals TAP’s contribution to net income from equity investments
US looking to jointly produce Johnson & Johnson's single-dose Covid vaccine in India, talks on with SII
India's focus must be how to come out of current COVID crisis, says Canadian Envoy
Import of Azerbaijani products by Belarus up in 1Q2021
Kazakhstan KazMunayGas sees decrease in oil production at major fields
New Covid-19 cases in India have peaked, shows Cambridge tracker
US Working Closely With India On Covid Crisis: White House Official
Egypt Sends 30 Tonnes Of Covid Medical Aid To India
Pm Modi, Boris Johnson To Hold Virtual Summit, Uk To Ship 1000 More Ventilators To India
Azerbaijan - unique space where there is interreligious harmony, cooperation, says Azerbaijani president
Global oil consumption set to rise by over 2 mb/d in Q2
EIA expects Brent price to decrease in second quarter
UK warns on sustainability of post-Brexit N.Ireland trade rules
LNG shipments from Qatar to UAE to resume, signalling improving ties
Oil & gas contracts down in number, rise in value
EIA revises down forecasts for Azerbaijan’s petroleum production
U.S. east coast to rely on petroleum inventories before main pipeline operation resumes
Austria, Georgia eye to implement projects in animal husbandry
WB to allocate Kyrgyzstan $ 20 mln to purchase coronavirus vaccines
Immunization with Sinovac in Georgia likely to begin in May
Iran-Pakistan border markets to be functional in few months
Cyberattack steals info of one million in Turkey’s Konya
Border police deployed in some Israeli cities amid Arab riots
Pipeline outage causes U.S. gasoline supply crunch, panic buying
Global renewable energy growth over 20 years peaks in 2020 - IEA
South Korea mulls commercial use of Northern Sea Route
Bahrain approves emergency use of Russia’s Sputnik Light vaccine — agency
Forum in New Zealand focuses on New Zealand-China economic cooperation, development opportunities
WHO head claims as global COVID cases drop to 630,000 per day
US Department of Energy retains forecast for Brent oil price at $62.3 per barrel in 2021
Samsung sees pandemic-led appliances boom extending run to rest of year
Next meeting on electoral reform to be held on May 14-16
Central Bank of Azerbaijan allocates funds to support financial literacy
Turkish State Mine Administration opens tender for rental of vehicles
Lending to electricity sector in Azerbaijan increases
Kazakh KazMunayTeniz to buy diesel fuel via tender
Iran's Petropars Company orders equipment from local manufacturers
Turkey reports over 14 400 COVID-19 cases
Some of children may be taken to Moscow for treatment after school shooting in Kazan
UN chief condemns Kazan school shooting
Gaza block collapses after Israeli strike, rocket hits Tel Aviv building
Kazakhstan supports solution of Palestinian-Israel conflict by peaceful means
Georgia likely to receive Novavax and Johnson & Johnson vaccines in July
Kazakhstan’s liquids production down in March - OPEC
COVID-19 cases decrease in 80 provinces in a week
Iran, Afghanistan discuss Afghan peace process
Israeli PM says to increase strikes against Gaza militants
Arab FMs kick off emergency meeting on Jerusalem tensions
Hamas and Israel step up attacks as Jerusalem unrest ignites Gaza
No need to evacuate people injured in Kazan school shooting to Moscow
Сompetition season of 2021 successfully started - European Gymnastics President
Identification of victims in Kazan school shooting completed
26 COVID-19 patients dead allegedly due to oxygen shortage in India's Goa
Japan's COVID-19 patients in "serious condition" hit fresh record high
Azerbaijani president, first lady express condolences to president of Tatarstan
President Aliyev expresses condolences to Russian counterpart
Iran's Energy Exchange announces products to be on sale on May 12
Bahar Azadi gold coin price continues to rise in Iran
Foreign investors waiting for decision related to FATF in Iran – official
Azerbaijani journalists view State Border Service's Military Hospital in liberated Gubadly (PHOTO)
Demand for OPEC crude in 2021 revised up
Turkish export of electrical goods to Azerbaijan drops
Shares of Kazakhstan's KAZ Minerals delisted from stock exchange
Export Development Bank of Iran to provide loans to startup companies
Data on cargo shipment through Turkish Kocaeli port over 1Q2021 revealed
Kazakhstan reports increase in new housing prices
Azerbaijan's ADIF continues compensating depositors of closed banks
Turkey sees increase in cement exports to Georgia
Cargo movements in Iran’s Shahid Rajaee port increase
OPEC marks increase in Baku-Tbilisi-Ceyhan oil exports
Guaranteed wheat purchasing from farmers in Iran continues
Iran to inaugurate new airport in Kurdistan Province
Iran to build new factory at Amirabad port
OPEC revises up forecasts for Azerbaijan’s liquids supplies in 2021
Azerbaijan reveals number of vaccinated citizens for May 11
Azerbaijan confirms 514 more COVID-19 cases, 1,306 recoveries
Iran reveals COVID-19 data for May 11
Iran’s PMO unveils volume of cargo transportation via Abadan Port
Iran shares unemployment data
Georgia export to Germany increased by 40%
Uzbekistan, Kyrgyzstan eye accelerating implementation of roadmap for industrial co-op
All news