Baku, Azerbaijan, Jan.21
By Leman Zeynalova – Trend:
Iran’s oil production is expected to drop to 2.7 million barrels per day (b/d) in 2019, Trend reports citing Wood Mackenzie research and consulting company.
“Iran’s six-month sanction waivers mean that its production will stabilize around 2.9 million b/d, at least for the first half of 2019. We don't expect the waivers to be renewed and forecast production to drop to around 2.7 million b/d the rest of the year,” said the report released by Wood Mackenzie.
The company believes that December 2018’s OPEC+ agreement combined with Iran’s already reduced output means that the Middle East and North Africa (MENA) oil production will fall year-on-year. “The benefits of near-term production restraint will help pay for longer-term capacity expansion.”
Saudi Arabia will lead the reductions, while the United Arab Emirates (UAE) and Kuwait will likely comply too, according to the report.
“Libya is exempted, so could go produce more than the 1.3 million b/d it reached at the end of 2018. But sustaining that level will be tough - we expect Libya to average close to 1 million b/d in 2019.”
The OPEC wildcard is Iraq, according to Wood Mackenzie.
“The country has been steadily building oil capacity and could go beyond 5 million b/d in 2019. Of the MENA OPEC members, Iraq has been the least compliant with output cuts. Even if it does continue to increase oil production, we still expect an overall year-on-year reduction in MENA output,” said the report.
US President Donald Trump declared Washington’s withdrawal from the nuclear deal with Iran in May 2018. Trump also announced the restoration of all sanctions against Iran, including secondary ones against other countries doing business with Iran. The United States re-introduced part of the sanctions against Iran on August 7, 2018, while the second batch of the sanctions came into effect on Nov.5, 2018.
The US government has agreed to let eight countries, including South Korea and Japan, as well as India, keep buying Iranian oil after it reimposes sanctions on Tehran. The waivers have been granted for six months.
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