Iran unable to sustain increase in crude oil exports - IEA
Iran, once OPEC's second-largest oil producer, will be unable to sustain an increase in crude exports that support its economy when some measures to curb those shipments are eased, the International Energy Agency said, Bloomberg reported.
The European Union said last month that it intends to suspend a ban on insuring tankers carrying the Iranian oil from December or January.
The U.S. said it will stop forcing buyers to cut purchases, even if they still aren't allowed to increase them. The concessions are in return for commitments from the Persian Gulf state to provide more information on its nuclear program, which western powers claim is intended to make weapons. Neither the EU nor the U.S. lifted sanctions on importing the nation's oil.
"The fact that the oil sanctions remain fully in place leaves on the face of it no room for any sustained increase in exports," the IEA, a Paris-based adviser to 28 nations, said in a report today.
"Even if sanctions on Iranian oil were eventually relaxed, meaningful increases in production would require a longer period and additional investment in Iran's upstream, and thus would take time to materialize."
Iran's oil shipments to other nations rose by 89,000 barrels a day to 850,000 barrels in November, the IEA said, including both crude and condensates.
The country cut the amount of oil stored on tankers to 22 million barrels by the end of the month from 37 million barrels in October, according to the agency.
Iran produced 3.5 million barrels of crude a day at the start of 2012, before EU sanctions took effect, ranking it second among members of the Organization of Petroleum Exporting Countries, behind Saudi Arabia, according to data compiled by Bloomberg.
The IEA estimated Iran's daily crude production at 2.71 million barrels in November, up 30,000 barrels from October, and ranking it sixth within OPEC, after Saudi Arabia, Iraq, the United Arab Emirates, Kuwait and Venezuela.
Iran sold $84.38 billion of crude oil in 2011, according to data from ITC TradeMap, a venture between the World Trade Organization and the United Nations. Its total exports of goods fetched $130.5 billion in the same year, the data show.
Brent crude futures settled 5 cents lower at $111 a barrel the day after a nuclear agreement was signed by Iran and world powers on Sunday, Nov. 24. Brent was trading near $110 today.
"As far as oil is concerned, the Geneva deal, regardless of its political significance, has not been the watershed moment some had hoped for," the IEA said.
"The market reaction to the deal, announced during the weekend lull in trading, was muted: a brief intraday dip in futures prices on the following Monday."