Tuesday, July 14, 2015

Iran Nuclear Conclusion to Reshape International Oil Market: Report
Tue Jul 14, 2015 12:34PM
presstv.ir

A new report says conclusion of nuclear talks between Iran and the P5+1 group of countries and a subsequent nuclear deal will have a major effect on international oil market.

The report published by Bloomberg on Tuesday, noted that the result of nuclear talks between Iran and six world powers in the Austrian capital city of Vienna can “eventually reshape global oil markets.”

The report added that after more than two years of talks, Iran which holds the world's fourth-largest proven crude oil reserves and the second-largest natural gas reserves, “will benefit from an easing of international sanctions” on its crude oil exports in return for accepting certain restriction on its nuclear program.

Earlier on Tuesday, Iran and the P5+1 group reached the conclusion of over a decade of negotiations on Tehran’s civilian nuclear program, with the Islamic Republic and the sextet sealing an agreement.

Based on the agreement, the world powers have recognized Iran’s civilian nuclear program, including the country’s right to the complete nuclear fuel cycle. Iran and the six powers also agreed that all economic, financial sanctions against Iran would be removed through a Security Council resolution. In addition, all bans on Iran’s Central Bank, shipping, oil industry, and many other companies will be lifted and billions of Iran’s blocked revenues will be unfrozen.

Earlier in June, Iran’s Oil Minister Bijan Zanganeh had told reporters that the country can increase its crude exports by 500,000 barrels per day (bpd) as soon as sanctions are lifted, and can then add another 500,000 bpd in the following six months.

The Iranian oil minister also noted that Iran's return to global oil market will not necessarily lead to further drop in oil prices, provided that other producers adjust their crude output to make room for Iran.

“I wrote a letter to OPEC member countries. It is our right to return to the market,” Zanganeh told reporters, adding that other OPEC members should cut production to make room for Iran’s return to its former production level so that Iran's re-entry into the market would not lead to a new drop in oil prices.

His remarks came as the Organization of the Petroleum Exporting Countries (OPEC) decided in its last meeting to keep its daily production ceiling of 30 million bpd at a time that global markets are already contending with a supply glut.

Data released by International Energy Agency indicate that global oil market may have to deal with about 800,000 barrels a day of crude supply in the second half of the year.

According to the Bloomberg’s report, “Iran’s oil reserves are estimated at 157.8 billion barrels by BP Plc. That’s enough to supply China for more than 40 years.”

Bloomberg’s report added that upon returning to the oil market, Iran’s priorities will be Asia followed by Europe. Under international sanctions, Iran has been exporting about 1.1 million barrels of oil a day mostly to Asian buyers, including China, South Korea, Japan, India, Turkey and Taiwan.

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