Iran's crude oil exports could rise by half a million barrels per day within 6-12 months once sanctions against it are lifted, the International Energy Agency said on Monday, adding to a glut that has pulled Brent prices to levels last seen in 2004, Reuters reported.
"As soon as the sanctions are lifted internationally, Iran in six months to one year will bring an additional 500,000 barrels per day to the market," said Fatih Birol, Executive Director of the International Energy Agency (IEA), in Tokyo.
Iran's barrels would add to an already oversupplied market that has seen prices fall by two-thirds since mid-2014, undercutting lows seen during the 2008 financial crisis and pulling oil to levels last seen more than a decade ago. [O/R]
Birol also said that he expected no significant oil price increase before late 2016.
He reiterated his concerns that the price decline is deterring investment, which risks leaving the market short in just a few years' time.
"What we see today is that as a result of the policies driven by the key producing countries, we are seeing prices remaining low and lots of oil production in non-OPEC regions are under pressure," he said.
"Our fresh analysis shows that next year we may see half a million barrels per day cut in the U.S. shale oil, Brazil production is under pressure, Africa, Russia. This may well mean that the share of OPEC will increase," he said.
Birol said on Dec. 3 that top exporter Saudi Arabia would "act responsibly" in the market, citing its reputation in helping balance global supplies.
But OPEC surprised the market a day later by failing to agree on a ceiling on oil production, leading to further declines in oil prices.
OPEC will stick to its decision to maintain a policy of not limiting production, despite the drop in global prices, Iraq's oil minister said on Sunday, adding that any output reduction aimed at boosting prices would have to be coordinated with non-members.
Global production remains at or near record highs and new supply looms from the Iran and the United States. Crude markets are also under pressure following last week's U.S. interest rate hikes and on signs of growing U.S. stockpiles even as more drilling rigs are deployed.
"Their policy is working," Birol said, referring to OPEC's push to drive higher cost producers out. "Non-OPEC producers are facing difficulties and my biggest worry is investments are declining."
Asked if OPEC may reimpose its ceiling on production next year, he said, "I don't know but it seems their results are in line with their expectations."