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Iran needs investments for oil production growth

Oil&Gas Materials 11 April 2016 15:28 (UTC +04:00)
Iran’s oil production could increase to 3.5 million barrel per day by the end-3Q16, but further growth in production will require infrastructure investments.
Iran needs investments for oil production growth

Baku, Azerbaijan, April 11

By Aygun Badalova - Trend:

Iran's oil production could increase to 3.5 million barrel per day (bpd) by the end-3Q16, but further growth in production will require infrastructure investments, analysts of the US JP Morgan bank said in the weekly Oil Market report obtained by Trend.

In the report analysts noted that the recent comments from Saudi Arabia on the Kingdom's unwillingness to freeze its oil output without Iran's participation are in contrast to the market's interpretation of previous comments, where it appeared likely that at least Saudi Arabia may maintain constant production versus their January levels.

"Such a change in strategy would add to uncertainty, and possibly downside risks to oil prices further than we expect," analysts said.

However, they said, outside the obvious issue of whether an agreement being reached without Iran is plausible, another key question is at what level will producers' expect Iranian production to be capped - January'16, current, pre-sanction levels or the reported level by Iranian government. These levels are 2.9 million bpd, 3.2 million bpd, 3.6 million bpd and 4 million bpd.

On April 17, major oil producers are expected to meet in Doha to discuss an agreement to freeze oil output at January 2016 levels.

Earlier Saudi Arabia stated that it will only freeze its oil output if Iran and other major producers do so.

Iran in its turn said that Tehran will not join the oil output freeze plan.

As for Saudi Arabia's contribution to a freeze agreement, even incorporating a constant production profile at 10.2 million bpd for the remainder of 2016, JP Morgan's analysts expect that Saudi Arabian crude oil exports will likely remain unchanged through the course of the year.

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