No big change in oil prices when Iran returns into market

 Oil Price


Tehran, Iran (PRESS TV): World oil Prices are likely to remain low in the coming months despite an imminent return into the market of the Republic of Iran as international sanctions are lifted.

Russia has announced that it does not expect any major impact on the international prices of oil once Iran returns to the market after the sanctions against the country are ultimately lifted.

“I don’t think there will be any great influence. The market has assessed and absorbed all of [Iran’s comeback to the oil market] long ago,” Russian Energy Minister Aleksandr Novak told reporters on Friday.

Novak emphasize that the oil prices will primarily be influenced by prime costs and the level of shale production.

The Russian official further added that the Iranian oil volume entering the global market would require a redistribution of quotas by OPEC.

Russian Energy Minister Aleksandr Novak

Russian Energy Minister Aleksandr Novak

He said that the average of $60 a barrel would be a normal oil price for producers worldwide. If prices increase to above that mark, the United States will increase its number of oil rigs, Novak has been quoted as saying by the website of Russia Today.

Iran’s total oil production – before US and EU sanctions were put into place – stood at 4 million barrels per day (bpd) of which 2.3 million-2.5 million bpd were exported.  The sanctions that were implemented from 2011 cut Iran’s oil production and subsequently the exports by half.

On Wednesday, National Iranian Oil Company (NIOC) Managing Director Rokneddin Javadi said Iran’s oil production could reach its pre-sanctions level of 4 million bpd within six to 12 months if there is enough demand.

Iran’s Petroleum Minister Bijan Zangeneh had already emphasized that the country would increase its oil output by 500,000 bpd in two months and by 1 million bpd in six months after the sanctions against Iran are lifted.

Iran and the P5+1 group of countries – the five permanent members of the Security Council plus Germany – announced agreement on a Joint Comprehensive Plan of Action (JCPOA) after marathon talks in Vienna this past Tuesday.

Based on the JCPOA, some sanctions against Iran will be lifted in return for the country’s steps to limit certain aspects of its nuclear energy program. A key part of the sanctions that are to be lifted are those that target Iran’s oil industry.