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Iran Output Remains Market's Wild Card

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Iran Sanctions Q A

Iran is widely considered to be able to boost oil output relatively quickly should sanctions be lifted upon revival of the 2015 nuclear deal if talks in Vienna succeed. The question is how quickly, a matter that gained importance this week after oil prices spiked over $100 per barrel in response to Russia's invasion of Ukraine. In 2016, production and exports bounced back faster than many had anticipated. This time, a senior Iranian official says the country will be able to do the same. Opec's former No. 2 producer can ramp up oil output to 4 million barrels per day within about three months once US sanctions are lifted, which would also enable it to double exports, the senior official told Energy Intelligence. “Once the sanctions are lifted, Iran can increase its production to 4 million b/d from the current level of around 2.5 million b/d,” said the official. He said the output hike would also enable Iran to double crude exports but did not provide a figure of present export levels. Industry experts estimate Iranian production presently in the range of 700,000 to 1.1 million b/d. When the so-called Joint Comprehensive Plan of Action (JCPOA) came into force in January 2016, it took Iran just three months to ramp up crude exports that had been running at less than 1 million b/d at the end of 2015 to more than 2 million b/d. With benchmark Brent crude closing in on $100 per barrel and Opec-plus members struggling to meet their agreed 400,000 b/d monthly increments at a time of buoyant demand, many oil market players would welcome the Iranian barrels. The country has already held talks with potential buyers of crude in Asia to gauge the size of the market. "Iran remains the wildcard," a senior Opec delegate said.

Topics:
Sanctions, Opec-Plus Supply , Oil Supply, Oil Demand, Oil Forecasts, Oil Inventories
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