OPEC member countries unlikely to allow Iran to regain market share, Thomas Pugh, commodities economist at British economic research and consulting company Capital Economics believes.
Iran’s oil minister, Bijan Zanganeh this week said the country will increase oil exports by more than one million barrels per day and urged other oil-producing countries “to pave the way for the return of Iranian oil to the world market” after the removal of international sanctions.
Zanganeh said Iran’s oil export has decreased by 60 percent since “crucial international sanctions” against the country were imposed (in mid-2012), adding that oil producers should make room for Iranian oil export resumption after sanctions are removed, Shana news agency reported.
“We think it is highly unlikely that other OPEC members would cut back their own output to allow Tehran to regain market share, so any increase in supply from Iran should put downward pressure on oil prices,” Pugh said in a report obtained by Trend.
Expert added that “despite more flare-ups in tensions in the Middle East, supply from OPEC has continued to climb, even before the potential boost from the easing of Western sanctions on Iran”.
Iran currently exports around one million barrels per day (bpd) of oil, less than half the 2.2-2.3 million bpd it exported before the sanctions on the country were imposed in 2012.
OPEC’s oil production quota stands at 30 million barrels per day.
During a meeting, held in November 2014, the cartel decided not to change the quota, despite the falling oil prices at the time and the persuasions of some countries to cut production to stabilize prices. The next meeting of OPEC member countries will be held June 4, following which it is scheduled to take a final decision on the issue of quotas for oil production.
