Iran to flood Asian oil markets with 500K bbl/d
The implications are strategic, geopolitical and geo-economic in nature.
Kloza said Iran will add even
more oil to the markets in 2016 as it improves its oil industry’s infrastructure, which has suffered under the
sanctions.
Both sides of the negotiating table are hailing the
agreement as a success with Donald Tusk, the President of the European Council, describing it as “a
game changer” and if fully implemented “a turning point in relations between
Iran and the global community, paving the way to new avenues of cooperation between the EU and
Iran“. This comes with the understanding that none of the
sanctionsrelief measures will take immediate effect and when
they do, there could be some unforeseen geo-political and geo-economic factors in play.
Iran and major world powers on Tuesday reached a deal to monitor Tehran’s
nuclear programme, which the West says will curb its efforts to build a
nuclearbomb.
The details of how sanctions will be lifted is not yet known. Finally, the
USA in concluding the deal has not foregone
anyof options it now holds to move against Iran. As part of the deal, Tehran will get relief from global sanctions, which could lead to a resurgence in its economy. The aim is to have this done by the end of this year.
Additionally, at some stage, talks on the $4-billion Iran-India
gas pipeline could restart.
There is also appreciable attention on Iran’s hydrocarbons; the world’s fourth-largest oil reserve and second-largest gas reserve.
Iran also will be able to access more than $100 billion in payments for its oil exports that are now frozen by USA sanctions in overseas foreign currency escrow accounts.
“Oil’s failure to respond positively to the (
US) stocks data suggests that the prospect of additional oil supply from Iran is still weighing on the sentiment”, said analyst Fawad Razaqzada at trading site Forex.com.
Could Iran set up cost efficient LNG production?
The new agreement will let Iran add about 500,000 barrels a day by mid-2016, and 500,000 a day more by the end of next year, Commerzbank AG estimates. And all will gain as the increasingly anxious Saudis look to diversify away from deep dependence on the
United States for defense supplies and markets for Saudi oil exports. It is assessed that the
Iraniancrude oil inflow coupled with USA shale oil will at the least stabilise crude oil prices around the current levels if not depress them further. The subdued crude oil prices have afforded the 2015-16 budget an estimated subsidy bill at Rs.
2.43 trillion, around 9% less than the revised estimate of Rs.
2.66 trillion for 2014-15. “Our country occupies less than one percent in this market”, he said.
TEHERAN • Foreign companies are eager to exploit the potential of Iran’s long-isolated economy following a landmark nuclear deal, but experts say doing business in the Islamic republic will remain challenging. The facilities at Mangaluru, Visakhapatnam and Padur together offer just 11 days’ capacity. The country has also agreed to invasive inspections by the worldwide Atomic Energy Agency (IAEA).
Gross under-recoveries have more than halved since FY13 on falling crude prices, de-regulation of diesel and petrol and the implementation of the direct benefits transfer scheme. Sourcing of hydrocarbons, under ideal conditions, is a commercial (costs and risks) decision at the refinery level and not a foreign policy decision. That’s enough to supply
Chinafor 40
years.
Iran also has the world’s largest reserves of gas and was the No. 4 producer previous year.
Oil prices were little changed
Friday amid the stronger dollar and concerns that the historic Iran nuclear deal could unleash more Iranian crude on the global market. On the other hand a gas pipeline can make India significantly dependent on Iran for its natural gas requirements.
Iran to flood Asian oil markets with 500K bbl/d
Last updated: Monday 20 July 2015