Doubts over Iran’s ability to resume oil export quickly

Doubts over Iran’s ability to resume oil export quickly

Baku, Azerbaijan, June 17

By Umid Niayesh - Trend:

Despite Iranian officials' statement about raising oil export immediately, some experts believe the process of putting significant further Iranian oil on the markets would take time.

Iran's Oil Minister Bijan Namdar Zanganeh has already said that the country can pump more, 0.5 mb/d of oil to markets a month after lifting the sanctions and this volume can reach 1 mb/d in six months.

Iran and P5+1 are negotiating to reach a comprehensive nuclear deal to pave the ways for elimination of sanctions imposed on Iran.

Reuters published a report on June 15, quoting several sources as saying that Iran has stored 38 million to 45 million barrels of oil at sea to be exported as soon as the sanctions on Iran are eliminated.

Guy Caruso the former administrator of the U.S. Energy Information Administration (EIA) who serves currently as a senior adviser in the Energy and National Security Program at CSIS told Trend on June 16 that "I have heard similar estimates of 30-40 million barrels of Iranian oil in floating. That would seem plausible".

"I have also heard that a large share of the oil in storage is in the form of condensates containing impurities which will make it difficult to market without processing. I think the pace of placing Iranian oil on the market may be slower than what Iranian officials announced. After sanctions lifting, I would guess 3-6 months to add 500,000 b/d and 12-18 months to reach 1 million b/d assuming the fields were well maintained and pressure tested," he said.

Before the western sanctions on Iran, the country was exporting 2.5 mb/d of oil, but the figure has fallen to 1.2 mb/d in 2014 and 1.4 mb/d in recent months.

Gal Luft is co-director of the Institute for the Analysis of Global Security (IAGS), a Washington based think tank told Trend on June 16 that "the oil market is well supplied and a large inventory overhang exists especially in the U.S. therefore 0.5 to 1 million barrels per days of new Iranian supplies could keep downward pressure on Brent prices in 2016".

Coming to the possibility of decreasing oil prices after raising Iranian oil export, Luft said, "My guess is about $5/barrel less than what otherwise would have been the price."
Luft who is a senior adviser to the United States Energy Security Council believes, "Iran may have the oil ready for export but that doesn't mean buyers will jump on it. I believe the volume in the first month will be 0.1 mb/d going up to 0.5 mb/d after six months. The impact on price will therefore be moderate. No more than $5 a barrel."

However, Anne Korin the co-director of the Institute for the Analysis of Global Security also told Trend on June 16 that assuming a rise in Iranian exports would likely drop oil prices quite substantially.

She believes that a sharp rise in Iranian oil export by 0.5 mb/d in a month or 1 mb/d in six months are feasible.

Sam Barden, the director of Wimpole International, an energy market development company believes that the decision to raise Iranian oil export by 0.5 million barrels per day (mb/d) will certainly push prices down because traders (financial through Brent complex) perception will go from having long positions in oil to short positions and that will mean price capitulation.

"Buyers become sellers and the price will overshoot to the downside. I think we will definitely see oil prices as low as USD $25 and I see that as happening quickly."

Edited by CN

Subscribe to Trend in Google News! Subscribe
Qatar’s import of Turkish cars up
Qatar’s import of Turkish cars up
Amazon to create 1,500 jobs in UAE this year
Amazon to create 1,500 jobs in UAE this year
GIFA honors Islamic Corporation for the Insurance of Investment and Export Credit with ‘Global Islamic Export Credit and Political Risk Insurance' Award 2021
GIFA honors Islamic Corporation for the Insurance of Investment and Export Credit with ‘Global Islamic Export Credit and Political Risk Insurance' Award 2021
Loading Bars
Assistant to Azerbaijani president meets with journalists, bloggers and academicians from Georgia
One civilian injured in mine explosion in Azerbaijan's Agdam district
Cameroon separatists kill 15 soldiers in attacks using explosives
Turkey's export of chemicals to France grows
9 killed, 20 injured in tribal court firing in NW Pakistan
Qatar’s import of Turkish cars up
U.S. to relax restrictions for vaccinated international travelers in November
Guterres praises Turkey's refugee efforts at NYC Turkish House
Relations with regional countries top Iran’s foreign policy agenda: Iranian president
Georgia sees increase in hazelnuts export
Joint tactical exercises "Indestructible Brotherhood - 2021" starts in Nakhchivan (PHOTO/VIDEO)
Turkmen company exports vegetables and fruits to Russia, Kazakhstan
Uzbekistan advances in Global Innovation Index
TAP wins Gas Project of Year at Gastech Awards 2021
Nizami Ganjavi International Center hosts 21st high-level meeting on peace and security (VIDEO)
Azerbaijani Diaspora in Munich holds meeting (PHOTO)
NATO enhancing engagement with Georgia on security in Black Sea region
Producer Price Index for Transportation and Storage Services in Georgia revealed
EU, UNDP offer new opportunities for rural entrepreneurs in Georgia
President Ilham Aliyev congratulates Russia's Vladimir Putin
Azerbaijan reduces imports of medicine from Georgia
Iran's Energy Exchange announces products to be on sale September 21
Number of client accounts in Azerbaijani banks increases
Azerbaijan shares data on number of vaccinated citizens
Georgian export of live cattle to Azerbaijan increases
Azercell provides support for first scientific-practical conference in Aghdam
Azerbaijan confirms 740 more COVID-19 cases, 2,442 recoveries
Uzbek Asia Trans Gas opens tender for reconstruction of stations
Eurostat reveals volume of fertilizers imported by Greece from Turkmenistan in 1H2021
Georgia shares data on import, export of tea
Kazakhstan - major partner for connectivity in Central Asia, says EU
Georgia cuts import of gas from Azerbaijan
Georgia unveils data on its trade with Azerbaijan
Iran’s Bahar Azadi gold coin price continues to fall
Unicapital shares forecast on inflation in Azerbaijan in 2021
President Ilham Aliyev calls Russia's Vladimir Putin
Iran shares data on value of GDP in industrial, mining sectors
Baku Metro to purchase carbonate via tender
Military officials from Azerbaijan, Turkey, Pakistan observe "Three Brothers - 2021" exercises (PHOTO)
Azerbaijan launches new tanker named after prominent academician (PHOTO)
Azerbaijan invites Russian companies to its renewable energy auctions
Amazon to create 1,500 jobs in UAE this year
Georgia shares data on Domestic Producer Price Index
National Bank of Kazakhstan shares inflation forecasts for 2021
Southern Gas Corridor not rival to other gas transmission systems, says minister
Turkmen Khazar Consortium to buy chemical reagents via tender
Turkmenistan discloses data on export of natural gas to China
Uzbekistan intends to restore transport links with Afghanistan
State stake in one of Uzbekistan's largest construction companies up for sale
Russia reports over 20,000 new daily COVID-19 cases
Turkmenistan sees decline in imports from Spain for 1H2021
Azerbaijan talks taxes on tutor services
Equinor appoints new Country Manager for Azerbaijan
Kazakh-German oil extracting JV opens tender to buy pumps
Kazakhstan increases production of several ore types
Azerbaijan to continue apple, tomato exports to Russia by railway cars
Iran sees increase in electricity generation by gas units of Bandar Abbas TPP
Russian Gazprombank reveals factors that led to refinancing rate increase in Azerbaijan
Top Israeli, Swedish diplomat chat in effort to mend ties
Gas condensate won't solve fuel problem of Iranian power plants - Thermal Power Plants Company
Boeing forecasts European passengers will grow 3% per year over next 20 years
Turkmen enterprise puts smart TVs up for sale at commodity exchange
GIFA honors Islamic Corporation for the Insurance of Investment and Export Credit with ‘Global Islamic Export Credit and Political Risk Insurance' Award 2021
Iran to provide support package to non-oil exporters - Trade Promotion Organization
Kazakhstan's monetary base remains flat
Turkey increases leather goods exports to Turkmenistan
No Azerbaijani citizens among victims of armed incident in Russia - MFA
Azerbaijani Foreign Ministry expresses condolences to Russia
Azerbaijani Mine Clearance Agency shares update on work done in liberated territories
Bakcell has joined a large-scale environmental campaign (PHOTO)
Iran's Ministry of Agriculture Jihad to receive foreign currency from government
Development of beekeeping in Karabakh to decrease honey prices - Association of Beekeepers
Italy's Cavalli to open $545 mln luxury skyscraper in Dubai with Damac
Active participation of Moscow Exchange in Uzbek financial market to create currency liquidity
Six people dead in Russia’s Perm university shooting
Equinor boosting gas deliveries to Europe amid supply crunch
Kazakhstan to continue negotiating on resumption of flights with Azerbaijan
Turkish, Azerbaijani jets conduct test flights over Bosphorus Strait before TEKNOFEST-2021
Iran's parliament asks government to boost Tabriz water transfer plan
Envoy Thanks India For Facilitating Russian Parliament Elections
Iran hopes to get rid of isolation through receiving SCO membership
Indian Industry To Make Two New Rockets - GSLV-Mk III, SSLV: Space Department
Azerbaijan records increase in imports
Georgian domestic export up in 8M2021
EY Azerbaijan officially announces the start of the ‘EY Entrepreneur Of The Year™’ 2021-2022 competition
Iran seeks self-sufficiency in agricultural products
OSCE PA Special Representative on South Caucasus to visit Azerbaijan
Increasing wages in Iran may lead to increase of inflation
Kazakhstan boosts transportation via pipelines
Manufacturing of c products increases in Iran
Georgia sees increase in Export Price Index
Iran to return to Vienna talks with new negotiating team
Azerbaijan, Kazakhstan to sign agreement on satellite data exchange
Turkmen state commodity, raw materials exchange transaction data revealed
Pre-election campaigning period in Uzbekistan kicks off
Value of GDP in Iran's agricultural sector down
In first foreign visit after taking over as CDS, Gen Bipin Rawat to visit Russia, US
Iran reveals COVID-19 data for September 20
Entire Karabakh region to become "green energy" zone - Azerbaijani president's special rep
Indian EAM, Saudi Arabian counterpart discuss resumption of direct flights, Afghanistan
All news