return of iranian oil may cause more opec tensions
Last Updated : GMT 22:12:23
Arab Today, arab today
Arab Today, arab today

Following landmark nuclear energy deal with world powers

Return of Iranian oil may cause more OPEC tensions

Arab Today, arab today

Arab Today, arab today Return of Iranian oil may cause more OPEC tensions

Return of oil from Iran could create fresh tensions within OPEC
London - Arab Today

The return of oil from Iran following the landmark nuclear energy deal with world powers could create fresh tensions within OPEC but may reinforce the cartel's output strategy, analysts say.

Tehran and major powers -- Britain, China, France, Germany, Russia and the United States -- clinched a historic agreement in Vienna on Tuesday aimed at ensuring Iran does not obtain a nuclear bomb, and which paves the way for the removal of sanctions and the gradual return of Iranian oil to the global market next year.

The accord puts strict limits on Iran's nuclear activities for at least a decade. In return, sanctions that have slashed the oil exports of OPEC's fifth-largest producer will be lifted and billions of dollars in frozen assets unblocked.

The Islamic republic's exports could reach a potential 2.4 million barrels per day (bpd) in 2016, from 1.6 million bpd in 2014, according to data from economist Charles Robertson at investment bank Renaissance Capital.

The Organization of the Petroleum Exporting Countries -- whose 12 members including Iran pump one third of global oil -- is mindful that Iranian oil could worsen a global supply glut and depress oil prices further.

OPEC decided at its last meeting in Vienna in June to maintain output levels, extending its Saudi-backed strategy to preserve market share and fend off competition from booming US shale.

Oil prices sank last week, hit by the Iran nuclear deal and the strong dollar, raising jitters among some OPEC members who next meet on December 4.

London Brent oil slid to about $56 per barrel and New York's West Texas Intermediate dropped to around $52 a barrel.

- Divisions in cartel -

Poorer OPEC members Angola, Algeria and Venezuela -- whose budgets are heavily reliant on oil revenues -- may again argue for less output to support prices, analysts say.

Richer Gulf producers, led by OPEC kingpin Saudi Arabia, remain eager for the cartel to preserve valuable market share and force out high-cost US shale producers with lower oil price levels.

"Clearly there is a divide between the countries on this new policy of seeking new market share," Ann-Louise Hittle at consultancy Wood Mackenzie told AFP.

"So it could be a contentious (OPEC) meeting and there could be pressure for an emergency meeting before December."

Faced with stubbornly low prices, Algeria's energy minister Salah Khabri indicated to state news agency APS last week that an emergency OPEC meet could be needed.

"The real problem starts when OPEC members begin to fight for quotas amid oversupply and market share disputes," said Jassem al-Saadun, head of Kuwait's Al-Shall Economic Consultants.

"If Iran, Venezuela, Algeria and Libya -- all of which need to pump more -- enter into a dispute with the Gulf producers, then it could be the end for OPEC," he warned.

Danske Bank analyst Jens Naervig Pedersen said such countries had been "really hit" by low oil prices.

But he added: "Their collective power is probably not great enough to turn the mind of Saudi Arabia and the core members of OPEC in the Middle East."

- Global demand key -

In June, OPEC's collective output ceiling was left at 30 million bpd -- where it has stood for three and a half years -- despite an oil price collapse between June 2014 and January that slashed precious revenues.

The organisation appeared to shrug off calls from some members, including Iran, for a "reasonable" oil price of between $75 and $80 per barrel.

Oil is forecast to languish at an average of just above $62 per barrel next year, according to French bank Natixis.

Hittle cautioned that low price levels could slow down US shale energy production and make room for returning supplies from Iran -- provided that global energy demand does not falter.

"When we look at fundamentals (of supply and demand) in the next year, with prices at this level we do expect to see a much slower growth in US oil supply," she said.

"So there might actually be some room for Iranian production to start up, as long as oil demand growth holds up and continues."
Source: AFP

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

return of iranian oil may cause more opec tensions return of iranian oil may cause more opec tensions

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

return of iranian oil may cause more opec tensions return of iranian oil may cause more opec tensions

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today The Big Apple bike boom

GMT 10:47 2017 Wednesday ,22 November

The Big Apple bike boom
Arab Today, arab today Keep kids busy at Thanksgiving gatherings

GMT 11:14 2017 Friday ,10 November

Keep kids busy at Thanksgiving gatherings
Arab Today, arab today Leaders of Russia, Iran, Turkey meet

GMT 10:12 2017 Wednesday ,22 November

Leaders of Russia, Iran, Turkey meet
Arab Today, arab today 'Advanced' cyber attack targets Saudi Arabia

GMT 10:18 2017 Wednesday ,22 November

'Advanced' cyber attack targets Saudi Arabia
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Australian academic's book pulled

GMT 15:20 2017 Monday ,13 November

Australian academic's book pulled
Arab Today, arab today May under Brexit pressure at EU reform summit

GMT 02:14 2017 Saturday ,18 November

May under Brexit pressure at EU reform summit
Arab Today, arab today Delhi half-marathon to go ahead

GMT 03:51 2017 Saturday ,18 November

Delhi half-marathon to go ahead
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Honda recalls 800,000 minivans

GMT 11:43 2017 Wednesday ,22 November

Honda recalls 800,000 minivans
Arab Today, arab today VW says will invest over 34bn euros

GMT 07:19 2017 Tuesday ,21 November

VW says will invest over 34bn euros
Arab Today, arab today Singer Jahda Wahba has unlimited ambitions

GMT 07:56 2017 Monday ,20 November

Singer Jahda Wahba has unlimited ambitions
Arab Today, arab today paObama climate envoy slams Trump's rejection

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection

GMT 09:23 2017 Saturday ,18 November

Fedra happy for “Between Two Worlds” success

GMT 11:15 2017 Thursday ,16 November

Angola oil boss sacked by father's protege

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 11:38 2017 Wednesday ,15 November

Unloved vultures fight for their survival

GMT 11:49 2017 Thursday ,17 August

Egyptian artist presents new collection of designs

GMT 13:41 2017 Tuesday ,21 November

French choke up over proposal

GMT 00:44 2017 Monday ,20 November

Japanese regulators raid Airbnb

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday