BAKU, Azerbaijan, April 5. Iran oil production may return to the market in H2 2022 and reaching 3.6 mb/d by year end, adding nearly 1 mb/d between June and December 2022 (from 2.7 mb/d), Trend reports with reference to the analysis by Bassam Fattouh and Andreas Economou, Oxford Institute for Energy Studies (OIES).
“The Iranian return is expected to be gradual with the bulk of sanctioned supplies returning within 6 months and the headline 3.8 mb/d level reached over a 12-month period. The failure of Iran returning to the market maintains the price pressure with Brent holding above $100/b for 2022 and retreating only to a range between $98/b and $117/b in 2023. Under Reference the market fails to build a surplus in 2023 and remains only balanced (-0.15 mb/d), with the market deficits persisting in all quarters under the Full curtailment case,” reads the analysis.
Iran has said that it is ready to increase its oil exports significantly if sanctions imposed by the Trump administration are lifted, but it will take time to restore relationships with customers in Europe and Asia. In February, officials from the National Iranian Oil Company (NIOC) traveled to Seoul, the capital of South Korea, to hold talks with several refineries on the prospects for resuming oil deliveries.
Omid Shokri, a visiting research scholar at the School of Policy and Government at George Mason University and is an analyst at Gulf State Analytics (GSA) who specializes in energy security, recalls that after the JCPOA went into implementation in 2016, Iran increased its oil production much faster than expected. Most analysts had predicted that Iran would increase its production by 500,000 barrels per day within a year after the lifting of sanctions, but in fact Iran reached this figure in less than four months, and by the end of the year had increased production by nearly one million barrels.
“To fully benefit from market shortages, Iran will also need investment. In September 2021, Iranian Oil Minister Javad Owji said that the Iranian oil industry needed $ 160 billion in investment to reach its potential. At the current time, Iran has not played a major role in the global market for natural gas. It has even reduced gas exports to Turkey and Iraq due to a shortage of natural gas for domestic needs and lack of investment in energy infrastructure,” he believes.
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