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    Home > Chemicals Industry > Petrochemical News > The impact and consequences of Iranian oil's return to the global market

    The impact and consequences of Iranian oil's return to the global market

    • Last Update: 2021-07-20
    • Source: Internet
    • Author: User
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    The nuclear agreement signed in 2015 and the lifting of US sanctions led to the prosperity and development of Iran’s energy industry.
    At that time, Iran was able to increase its daily oil production to 4 million barrels and its daily export volume exceeded 2 million barrels
    .
    However, when the United States announced its withdrawal from the nuclear agreement in May 2018, Iran's oil exports and production have dropped significantly
    .


    At present, in the fourth round of negotiations between Iran and Western countries in Vienna on the return of the United States to the nuclear agreement and the lifting of sanctions against Iran, energy experts have focused their attention on the legal return of Iranian oil to the global market, and its possibility.
    The impact on global supply and international oil prices
    .


    Iran’s chief negotiator, Abbas Araghi, stated that all parties have reached a consensus on lifting some sanctions, including some “industry” sanctions related to oil, banks, ports and international trade, as well as those related to certain individuals and entities.
    Sanctions
    .


    Positive and Negative Viewpoints

    Oil and energy affairs expert Hamid Shakushi said, "We mainly hold two major positive and negative views on the growth of Iran’s oil production and exports after the sanctions are lifted.
    From a positive point of view , That is, Iran can quickly return to the international oil market, as happened after the signing of the nuclear agreement in 2015, thanks to the experience of the Minister of Petroleum and his understanding of the global market, as well as the mature and strong Iranian oil marketing capabilities
    .
    "

    Shakushi added to al-Jazeera reporters that the current global market has oversupply and insufficient demand, which prevents countries like Iran that have left the market for a period of time from regaining their previous status.
    In addition, due to the targeting of Iran The sanctions against Iran have been repeated, and importers of Iranian oil are also pessimistic and suspicious of continuing to rely on Iranian oil
    .


      Shakuhi said that given the current situation, Iranian oil will gradually enter the market instead of entering the market all at once
    .
    If the sanctions are lifted, Iran can increase its current export volume by at least 1 million barrels and eventually increase its daily output to 4 million barrels
    .


      Unofficial exports

      During the embargo, Iran’s oil exports never seem to have dropped to zero.
    Despite the lack of official statistics, many international agencies and experts believe that Iran’s oil exports during this period exceeded 300,000 barrels per day.
    It has increased to nearly 500,000 barrels in recent months, and sometimes even reaches 1 million barrels
    .


      According to a report released by the International Energy Agency in March this year, Iran’s daily oil production reached 2.
    3 million barrels.
    According to a Reuters report, Iran’s daily oil production rose to 2.
    5 million barrels in April this year, reaching the highest level in the past two years.
    The highest level
    .


      No discount outlet

      , some experts believe that in the case of sanctions, Iran is usually sold at a discount with additional oil to its customers, once the lifting of sanctions, so Iran would not need to continue to offer such discounted prices, so that may lead to Iranian oil Prices have risen in the international market, not the other way around
    .


      Oil and energy expert Mehdi Husseini believes that given that the global demand for oil is about 90 million barrels per day, Iran’s daily export of 2 million to 2.
    5 million barrels of oil will not have a significant impact on the global oil market.
    Impact
    .


      Husseini added to al-Jazeera reporters that in view of the continuous expansion of the new crown vaccination campaign, the economies of various countries have recovered and the demand for oil has also increased.
    Therefore, the entry of Iranian oil into the international market will not have a significant impact on global oil prices.

    .


      In view of Iran's continuous development of its petrochemical and refining industries in the past few years, its oil exports are largely completed in the form of petrochemicals and petroleum products, not just in the form of crude oil
    .


      Sanctions lifting and economic growth

      After signing the nuclear agreement, Iran’s economic growth rate rose to 12.
    5% ​​in 2016, which is the highest level Iran has in 40 years, thanks to Iran’s oil sales during this period
    .
    Therefore, Iran’s return to the global oil market will have a positive impact on its economic growth.

    .


      Mohamed Kuli Yusuf, a member of the Academic Affairs Office of Economics at Alamey Tabatabay University in Iran, believes that most of the problems in the Iranian economy have nothing to do with sanctions.
    On the other hand, oil sales can help government spending.
    , Fill the budget deficit, import and lower the price of certain commodities
    .


      Yusuf also added to a reporter from Al Jazeera that the lifting of sanctions has nothing to do with Iran’s economic development.
    The increase in oil exports can increase government revenue, but it is related to the well-being of the people, job creation, sustainable development, national development, and technology.
    Development, factory building, and hope for young people are irrelevant, because lifting sanctions will only solve the country’s problems, not the people’s problems
    .

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