Energy market strategist: Iran capable of rapidly hitting markets with its oil

Energy market strategist: Iran capable of rapidly hitting markets with its oil

Azerbaijan, Baku, Oct. 23 / Trend, D. Khatinoglu, S. Isayev

Iran has a lot of oil in storage which could rapidly hit the market if they were so unwise as to dump it, former director of International Petroleum Exchange, energy market analyst Chris Cook told Trend.

Cook was commenting on a possibility of sanctions on Iran's oil export eliminated this month, and if it happens, how long would it take Iran to re-open its closed oil wells.

"The consensus appears to be that anything up to 1m barrels per day could be brought on-line within one to three months," Cook said.

Speaking about Iran reaching its 3.7 mbpd oil output level and above from 2010 after its wells are re-opened, Cook said that with adequate investment in modern drilling and production techniques there is no reason why production could not recover to 2010 levels or even go higher.

"Whether producing at those rates is in Iran's interests is another matter. Iran's oil minister Mr. Zanganeh understands the difference between capacity and production," Cook added.

According to the OPEC's annual report covering statistics for 2012, Iran's crude oil processing capacity was about 1.681 mbpd. Iran's oil export was about 1.2 mbpd in 2012, while the figure decreased to about one mbpd in first three quarters of 2013. Iran has had to shut down some oil field's wells and decrease the oil production since mid 2012.

Alongside shutting down of wells, it is estimated that Iranian crude oil held in a floating storage in Persian Gulf is about 25-30 million barrels.

"If care is taken in shutting down production, then fields need not be damaged. In fact, pressure can even recover to give better production rates than before a shut-in," Cook said.

National Iranian Oil Company (NIOC) international affairs director Mohsen Ghamsari said on Oct. 22 that country could consider offering crude price discounts in the future to regain its former markets.

Ghamsari said that Iran doesn't have any obligation to give discounts for selling crude oil, added that Iran's oil price can easily compete with the neighboring oil producers.

Chris Cook believes that the global market is over-supplied and has been artificially supported by one or more producers with financial leverage from risk-averse 'inflation hedging' commodity investors who have recently been leaving the market in search of yield.

International Energy Agency (IEA) in its report said that growth in global oil demand this year was expected to remain largely unchanged from last year at around 895,000 barrels per day (bp), which was 30,000 bp less than in 2012.

In its Oil Market Report for August, the agency, however, trimmed its 2014 growth forecast for oil demand by 100,000 bp down to 1.1 million bp. The slowdown was the result of a revised figure for global economic growth next year, the IEA said, which the International Monetary Fund (IMF) had forecast to come in at 3.8 percent rather than an original 4 percent.

"The expected increase in production in the US and elsewhere requires sustained high prices, and if Iran does re-enter the market, and other production issues are resolved elsewhere (Nigeria, Libya, and others) then I think prices will fall (as forward prices imply) and the much-hyped US wave will not materialise. Boom and bust are hard-wired into the US energy market," Cook said.

According to OPEC's latest monthly report, the 12 members' oil outout totally decreased by 389,700 bpd, mostly due to decrees in Libya and Iraq's crude oil production.

Iraq's oil output felt by 370,300 bpd last month compared to previous month, while Libya's dropped from 1.39 mpb in 2012 to about 0.5 mbpd during last month.

The OPEC report based on secondary sources say Iran's oil output in September was 2.7 mpb, while this figure in 2011 - before the West's tough sanctions over the country's oil export- was 3.628 mbpd.

OPEC producer Iran has lost considerable market share as a result of international sanctions aimed at persuading Iran to stop its uranium enrichment work.

The sanctions, in particular those imposed separately by the United States and European Union in late June and early July last year, have slashed Iran's crude exports to around 1 million b/d from pre-sanctions levels of 2.2-2.3 million b/d.

Israel attacks targets near Damascus
Israel attacks targets near Damascus
Qatar reports 819 new COVID-19 cases, 199,180 in total
Qatar reports 819 new COVID-19 cases, 199,180 in total
Emirates may need to raise cash if air travel does not pick up
Emirates may need to raise cash if air travel does not pick up
Loading Bars
Latest
France ready to implement joint projects with Turkmenistan in agricultural sector
Brazil reports 3,472 more deaths
Baku Higher Oil School wins Regional Petrobowl Competition
Israel attacks targets near Damascus
German court clears path for EU COVID-19 recovery fund
Iran’s NIDC announces number of drilled wells
Iran adds advanced machines at Natanz uranium enrichment plant: IAEA
Italy's cabinet unveils roadmap for reopening starting April 26
Pakistan: Several killed in explosion at Quetta hotel
MSF urges rich countries to back COVID vaccine patent waiver
U.S. commanders seek approval for aircraft carrier near Afghanistan during withdrawal
Britain's Heathrow Airport turns down airline requests for extra flights from India
Qatar reports 819 new COVID-19 cases, 199,180 in total
Uzbekistan reveals number of investment projects implemented with S.Korea, Japan
Azerbaijani gymnast reaches final of European Championship in Basel
Turkey records highest daily COVID-19 deaths toll yet, total nears 37,000
Executive power of Azerbaijan’s Astara district opens tender for overhaul of roads
Georgia introduces new regulation on activation of roaming services
Azerbaijan to increase production of pomegranate in 2021
Iran halts flights to 39 countries due to rising COVID: CAO
NASA, SpaceX delay Crew-2 mission launch to space station
Over 200 mln COVID-19 shots administered in U.S.
Olympic motto may be altered, IOC President says
Turkey extends short-term work pay scheme until June
Uzbekistan Airways plans to discontinue flights to nine countries
Review of Georgia's exports to China
Azerbaijani banks greatly expand mortgage lending volume - CBA
EU provides more details on projects supporting in Georgian energy sector
Iran's Energy Exchange announces products to be on sale on April 24
Extension of contract for dev't of gold-bearing deposit approved in Azerbaijan
Geostat reveals data on China's exports to Georgia
UK records another 2,396 coronavirus cases, 22 deaths
Robert F. Kennedy Human Rights, Nizami Ganjavi Int'l Center to discuss need for human rights advocacy
Armenia demonstrates fascism in relation to historical monuments - Azerbaijani State Committee
Karabakh ceasefire agreement signed, time to move forward - Commissioner for Human Rights
Some Russian airlines receive permission to make regular flights to Azerbaijan
View of Azerbaijan's liberated territories horrifying - Belarus ambassador
Execution of memorandum on improving insurance literacy starts in Azerbaijan
Uzbekneftegaz completes drilling operations on several wells
Number of transactions at Uzbek Commodity Exchange for 1Q2021 increases
EIB to assist Uzbekistan in developing credit line for project in Aral Sea region
Longest tunnel in Iran to be opened by end of spring
WB expresses readiness to provide digital transformation support to Azerbaijan
Iran creating water trading market
Volume of credit investments in Azerbaijan's economy declines
Iran’s Bahar Azadi gold coin price rebounds
WB predicts fall in gold prices in 2021
Kazakhstan to establish new mobile operator
Exports markets demonstrate growing demand for Georgian medications
Kazakhstan talks ongoing work to open CLAAS agricultural vehicles' assembly plant
Turkmenistan's Turkmenbashi refinery to launch production of Jet A-1 aviation fuel
Uzbekistan, Latvia consider prospects for co-op in ICT
Azerbaijan shows footage from Bash Garvand village of Aghdam district (VIDEO)
Postal operators of Azerbaijan, Turkey launch money transfer service at favorable tariffs
India’s crosses a Landmark with Cumulative Vaccination Coverage more than 13 Crores
SOCAR Ukraine bidding for Odessa Port Plant’s tender
London Bridge station reopens after suspicious item investigated
Uzbek-Korean JSC announces tender for transport services
PM Modi to address virtual Leaders' Summit on Climate tomorrow
Turkmenistan's Turkmengeology opens tender for purchase of equipment
Delayed tourism recovery affects Georgian economic growth forecast
India gets elected to three UN ECOSOC bodies
Turkmenistan's Turkmengas opens tender for purchase of chemical products
UK extends G7 Foreign Ministers' meeting invite to India
Kazakhstan’s national postal service operator to buy spares via tender
Georgia prepares for UN Food Systems Summit 2021
Azerbaijan shares data on number of vaccinated citizens for Apr. 21
Azerbaijan confirms 2,075 more COVID-19 cases, 2,480 recoveries
Iran Khodro declares amount of money to be saved
IRICA discloses details of Iran’s trade turnover with neighboring countries
Turkey reveals volume of goods received at Bandirma port in 2M2021
Georgian commercial banks see increase in profits
Industrial parks will also operate in Karabakh zone - President Aliyev
COVID-19 stalls launch of direct flights between Kazakhstan, US - ambassador
European countries to resume J&J COVID vaccine deliveries
Azerbaijan discloses volume of vehicles assembled at Ganja Automobile Plant
Dutch Stone City Energy to build TPP in Uzbekistan’s Surkhandarya region
WB names amount of allocations to countries against COVID-19
Carbamide production in Azerbaijan to grow, WB forecasts
Baku Stock Exchange holds auction on placement of CBA short-term notes
Turkmenistan's gas compressor plant contributes gas supply to oil wells
Eurasian Development Bank to support hospitals construction in Kazakhstan
Number of Kazakh companies increases in Turkey
Turkey unveils volume of cargo shipment through Kocaeli port
Onion exports from Georgia up, while imports decrease
Azerbaijan's Ganja Automobile Plant looks to enter markets of EAEU, neighboring countries
TCO talks release of excess amount pollutants at Kazakhstan’s Tengiz field
Azerbaijan eyes to introduce biometric e-signature system
Verizon loses more-than-expected wireless subscribers
Pace of Turkmen industry dev’t accelerating
Volume of Azerbaijan's 1Q2021 oil export to Spain disclosed
Austria increases import of Turkish-made chemicals
Silk Way West Airlines named ‘Cargo Airline of the Year 2020’
Turkey's 1Q2021 furniture export to Austria shows increase
Turkey's furniture export to Iran up
WB says global coal prices to jump in 2021
Cost of electricity imports to Georgia increase
Iran's Jam Petrochemical Complex sees increase in sales
Ukrainian Bees Airline plans to carry out Kyiv - Tbilisi - Kyiv flights
Azerbaijani state budget receipts through State Customs Committee exceed forecasts
All news