Iran Deal May Be Slow to Affect Oil Sector
2015/4/17 9:47:56 Source：The New York Times
HOUSTON — The breakthrough in nuclear talks with Iran on Thursday has the potential to cause a seismic shift in global energy markets over the long term, but energy experts said any appreciable impact on an already glutted global oil market was highly doubtful for at least six months and probably more than a year.
Since the European Union placed sanctions on Iranian oil in 2012, Iranian exports of crude have fallen by more than a million barrels a day — more than 1 percent of global supplies. At a time when there is a daily excess of nearly 2 million barrels of supply on the world market, another million barrels a day would put further pressure on world crude prices — which have fallen about 50 percent since June.
While the agreement reached in Switzerland was tentative, the news led traders to sell oil futures and the price of the global Brent benchmark declined by nearly 4 percent, falling below $55 a barrel. Iran has as much as 20 million barrels of crude in storage — more than what the United States consumes in a day — that it could potentially release on the market.
Lifting of oil sanctions has been one of Iran's main objectives because its economy is highly dependent on oil sales and the sanctions have caused cancellations and delays in several oil exploration and production projects.
“The framework agreement lays out a path to significantly increase Iranian oil exports over time,” said Michael Levi, an energy expert at the Council on Foreign Relations. But he added, “You want to know how many barrels will come out of Iran next week? Zero.”
Iran is still among the premier oil producers in the world, and has the fourth-largest proven reserves after Saudi Arabia, Venezuela and Canada. Its largest buyers are China, India, Japan, South Korea and Turkey. Expanded exports to those countries would put price pressure on competing members of the Organization of the Petroleum Exporting Countries, particularly its archrival Saudi Arabia. With higher production, Iran could challenge the leadership of Saudi Arabia in OPEC in alliance with Iraq and Venezuela.
Contradictory factors are likely to continue to move oil in a jagged direction in the coming weeks. On the one hand, oil supplies continue to build in the United States and globally. On the other, conflicts in Iraq and Libya threaten to trim their crude exports.
