24 September 2018 - 16:58
  • News Code: 284757
Bringing Iran Oil Exports to Zero, Impossible: Official

TEHRAN (Shana) -- Iran’s OPEC governor Hossein Kazempour Ardebily said regarding the current market conditions and the production level of the producing countries in or outside of the Organization of the Petroleum Exporting Countries (OPEC), threats to bring Iran’s oil exports are not practical.

Speaking to IRNA in Algiers on Monday, the official said, “The market conditions and the production level of countries are not such that a replacement for Iranian oil could be found to remove it from the oil market.”

The global demand for oil will persist in the event of insistence on reducing Iran's oil exports through US sanctions, but the question is who will be able to enter the market and offset this potential supply shortage, he said.

Mr. Ardebily said: “Some parties, like Saudi Arabia, claim to have a surplus capacity, but we have not witnessed any supply increases from production augmentation and surplus capacity from this country.”

Saudi Arabia may tap its inventories to supply the market and have some spare production capacity in winter due to reduced domestic consumption, but it will not be able to offset Iran’s oil in the market alone, therefore other parties must join US president in squeezing Iran out of the oil market, he added.

He added that Russia now has surplus production capacity, as it has already cut its production by 300,000 barrels per day and has now returned 265,000 b/d of that to the market.

Iran’s OPEC boss said he believed that there were not much oil left in Russia to supply as excess capacity. “We know that in some parts of northern Siberia, in winter, part of the production is reduced and Russia cannot maintain production in those areas.”

“We think the total output of producers cannot replace the amount of production that Donald Trump claims. For this reason, Trump has to show some flexibility in dealing with Iranian oil buyers. For example, about one and a half million or 1.2 million barrels. Given the current circumstances, he has to soften its plans to totally wipe Iranian oil out of the market. Of course, it is possible that they withdraw from their strategic reserves for, say, two months, and sell them to offset the shortage caused by removing Iran from the market, but this is not possible in the long run.”

“All OPEC producers cannot offset the shortage caused by removing 2.3 mbd of Iranian oil in the market by November, unless they decide to tap their inventories which would not be enough for supplying the market demand.”  

Mr. Ardebily said: "What is certain is that Tehran's resistance to the situation that has not yet happened has been good. Iran has maintained its production level and supplied about 3.805 mbd to the market…Iran's oil production is about seven or eight thousand barrels above its designated quota in OPEC.

He also said domestic refineries were operating at full capacity to consume the produced oil domestically.

The official said prolonged US sanctions on Iran would dramatically soar up the prices which would stimulate the global community against the US and spur them into criticizing Trump’s policies.

News Code 284757

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