BAKU, Azerbaijan, May 10
By Leman Zeynalova – Trend:
The US JP Morgan Bank now expects Iran to produce on average an additional 200 kbd this year versus our previous forecast, with an exit 2021 rate of 3.2 mbd of crude and condensate production, compared to our previous estimate of 3.0 mbd, Trend reports citing the Bank.
“We expect Iran to return to its full production capacity of 4.2 mbd (crude and condensate) by early 2023. Most of Iran’s legacy fields like Ahwaz, Marun, Gaschsaran and Abuzar can ramp up production within 3-6 months, bringing an additional 2 mbd of capacity (crude and condensate) into the market between May 2021 and April 2022, when the OPEC+ supply deal is set to expire,” reads the JP Morgan report.
With Iran back in the market, the Bank believes Saudi Arabia will continue to prioritize its revenue-maximization strategy in 2021, rather than battle for market share with its geopolitical competitor. The alliance is set to increase its production in steps, resulting in a combined 2.1 mbd between May and July, well below our anticipated demand uplift of 3.5 mbd over the same period.
“Therefore, balances in the coming months provide sufficient space to absorb both OPEC+ and Iranian barrels and still draw inventories. Reported commercial inventories in developed economies fell for a seventh consecutive month in February and were down to just 57 million barrels above their 2015-2019 average as of February.
Based on our balances, we see OECD commercial inventories basically in line with its 2015- 2019 average last month in April. We maintain our view that OPEC+ will continue to keep 4-5 mbd offline this year in order to keep a tab on the strength of the demand recovery while simultaneously monitoring for production increases elsewhere,” said the JP Morgan Bank.
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